UPDATE 1-On anniversary, Obama defends economic stimulus

Wed Feb 17, 2010 4:38pm EST

Related Topics

* Administration officials across country promote stimulus

* Skepticism widespread at one-year anniversary of launch

* Obama accuses Republican critics of hypocrisy

* Congressional watchdog estimates higher final cost (Adds CBO estimating higher final cost, paragraph 11; more reaction, paragraphs 16-17)

By Steve Holland

WASHINGTON, Feb 17 (Reuters) - President Barack Obama vigorously defended his $787 billion stimulus on Wednesday, insisting it rescued Americans from the worst of the economic calamity and ripping Republican critics who called it a waste.

Obama and Vice President Joe Biden launched a sweeping effort to convince skeptical Americans that the stimulus has been beneficial on the one-year anniversary of a plan that was pushed through the U.S. Congress by Democratic majorities.

Obama, in a White House speech, said he believed the stimulus will save or create 1.5 million jobs in 2010 after saving or creating as many as 2 million jobs thus far.

His point was to show that the stimulus, while admittedly unpopular, had the effect of keeping the U.S. economy from plunging into a second Great Depression.

"Our work is far from over but we have rescued this economy from the worst of this crisis," he said.

As Obama spoke, many administration officials were fanning out across the country this week to promote projects that have been funded by the stimulus to show Americans its results.

For example, the U.S. Department of Transportation awarded $1.5 billion on Wednesday in stimulus grants to local and state governments to back 51 transportation projects.

The White House hoped that once Americans in their towns and cities saw the results of the stimulus, they would realize it has helped.

Obama has much work to do to convince Americans who are still struggling to find work amid a 9.7 percent jobless rate.

A CBS News/New York Times poll last week found that only 6 percent of Americans believed the package had created jobs. Another poll by CNN/Opinion Research Corporation showed a majority opposed the stimulus program.

And the price tag of the stimulus has gone up. The Congressional Budget Office estimates that when all is said and done, the package will end up costing $862 billion because unemployment compensation has been costlier than expected.

ELECTION YEAR PRESSURE

All this comes as Obama and his Democrats face pressure to show results in an election year in which their large majorities in Congress could be at risk.

Republicans eager to score political points emailed out to reporters the original administration estimates from a year ago that showed the U.S. jobless rate would only rise to 8 percent under the stimulus.

"In the first year of the trillion-dollar stimulus, Americans have lost millions of jobs, the unemployment rate continues to hover near 10 percent, the deficit continues to soar and we're inundated with stories of waste, fraud and abuse," said Senate Republican leader Mitch McConnell.

"This was not the plan Americans asked for or the results they were promised," he said.

Anger and frustration over high government spending and deficits have been leading causes of a wave of public discontent with Washington, and Republicans sought to ride the current.

"One year later, we see plainly that the stimulus was not a well-thought-out plan," 2008 Republican vice presidential candidate Sarah Palin said on Facebook. "It hasn't revived our economy; instead the debt-ridden package will prove to be a drag on our economy."

Obama used a portion of his speech to accuse Republicans of hypocrisy, saying they have enjoyed its benefits even as they criticized the plan.

"There are those, let's face it, across the aisle who have tried to score political points by attacking what we did, even as many of them show up at ribbon-cutting ceremonies for projects in their districts," Obama said.

He said he recognized that many Americans are not benefiting from the stimulus.

"Millions more are struggling to make ends meet. So it doesn't yet feel like much of a recovery. And I understand that. It's why we're going to continue to do everything in our power to turn this economy around," Obama said.

With Congress now working on a multibillion-dollar jobs bill, Obama warned of the possibility this year of layoffs by state governments as funding from the stimulus runs out.

(Additional reporting by Matt Spetalnick and Lisa Lambert; Editing by Eric Walsh)

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