Obama defends stimulus plan

Washington: US President Barack Obama said his $787 billion (Dh2,888 billion) stimulus bill "has worked as intended" as he pushed back against Republican criticism that his recovery programme has failed to rescue the economy.

"It has already extended unemployment insurance and health insurance to those who have lost their jobs in this recession," Obama, who is travelling today in Ghana, said in his weekly radio and online address. "It has delivered $43 billion in tax relief to American working families and business."

Obama spoke after stocks fell for a fourth week on concern that an economic recovery will be delayed. A government report last week showed that employers cut 467,000 jobs in June and the unemployment rate rose to 9.5 per cent, the highest since 1983.

The weakening labour market is taking a toll on Obama's popularity. A survey by Hamden, Connecticut-based Quinnipiac University released Tuesday showed 49 per cent of Ohio voters approved of Obama's job performance, down from 62 per cent in a May 6 poll. The disapproval figure for Obama was 44 per cent, up from 31 per cent in May.

Obama, in his speech, said the stimulus programme is helping state governments save jobs. Were it not for the programme, the president said, "state deficits would be nearly twice as large as they are now, resulting in tens of thousands of additional layoffs - layoffs that would affect police officers, teachers, and firefighters."

In the weekly Republican response, House Minority Whip Eric Cantor of Virginia said the stimulus bill was "full of pork-barrel spending, government waste and massive borrowing cleverly called 'stimulus'."

"The plain truth is that President Obama's economic decisions have not produced jobs, have not produced prosperity, and have not worked," Cantor said.

He said the Republicans want reductions in tax rates that he said would help middle-class families.

In pleading for public patience, Obama said the recovery act "wasn't designed to restore the economy to full health on its own, but to provide the boost necessary to stop the free fall."

Enacted in February, the bill "was designed to spur demand and get people spending again and cushion those who had borne the brunt of the crisis," the president said.

Obama said the measure "was not designed to work in four months - it was designed to work over two years."

The spending plan will "accelerate greatly" through the summer and autumn, creating "thousands more infrastructure projects" that will lead to additional jobs, he said.

"We're moving in the right direction," Obama said.

"We must let it work the way it's supposed to, with the understanding that in any recession, unemployment tends to recover more slowly than other measures of economic activity."