· October 12, 2012

Veep Debate Fact Check: Did the Stimulus Help?

V.P. candidate Rep. Paul Ryan made pointed comments Thursday night about the stimulus bill championed by President Obama shortly after taking office and passed by the then-Democratic led Congress. Ryan is correct in saying that the unemployment rate languished above 8% – above Obama’s target – for longer than the Administration expected. However, the charge that he and other Republicans level that the stimulus was inconsequential is false. Here’s what the New York Times fact checkers had to say about the American Recovery and Reinvestment Act:

The 18-month recession officially ended in June 2009, five months into Mr. Obama’s term, as measured by the National Bureau of Economic Research. There is plenty of debate over how effective Mr. Obama’s economic policies have been, especially given the painfully slow recovery. But even critics who believe that the president’s stimulus law was a missed opportunity — from liberals who say it was too small to conservatives who say it was wasteful and poorly targeted — tend to acknowledge what the nonpartisan Congressional Budget Office has found: that it did save or create jobs, lower the unemployment rate and help the economy grow in the short term. The budget office used ranges to estimate the impact of stimulus. At its peak in the third quarter of 2010, the budget office found, the stimulus saved or created the equivalent of between one million and 5.1 million full-time jobs, lowered the unemployment rate by between 0.4 and two percentage points, and increased the real gross domestic product by between 0.7 percent and 4.1 percent.

Reasonable people may disagree on the size of the stimulus and where and how investments were made, but it made a difference. In fact, in our recent report done with the Center for American Progress, we identified several stimulus items that continue to help the middle class today. The American Opportunity Tax Credit is used to help families afford college education and the expansion of the Earned Income Tax Credit helps keep lower income Americans in the workforce. The Romney-Ryan budget plans call for scaling back of these items, while cutting taxes for the wealthy by 20%.