WASHINGTON (Reuters) - President Barack Obama said Saturday more time was needed for his $787 billion stimulus package to work, predicting the spending would have a bigger impact on the economy later this year.
In an advanced text of his weekly radio speech, Obama said the stimulus plan approved by Congress and signed into law in mid-February “was not designed to work in four months — it was designed to work over two years.”
U.S. Treasury Secretary Timothy Geithner said it was too soon to decide whether the U.S. economy needed the help of a second-round of government stimulus to recover from recession.
“I don’t think that’s a judgment we need to make now, can’t really make it now prudently, responsibly,” he said in a taped interview with CNN that will air Sunday.
According to a transcript provided by CNN, Geithner said the “biggest thrust” of the stimulus package signed into law earlier this year would take effect in the second half of the year.
Obama’s comments follow government data showing the unemployment rate soared to 9.5 percent in June, the highest level since 1983 and above the 8 percent peak predicted by the White House when it worked with Congress to pass the package. Republicans say the stimulus plan is not working.
Obama now warns unemployment likely will top 10 percent in the coming months.
“We must let (the stimulus plan) 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,” Obama said.
He said the benefits of the plan would “accelerate greatly throughout the summer and the fall.”
The continuing recession and further steep job losses are wearing away the patience of Americans and raising doubts about Obama’s handling of the economy.
The share of Americans who believe the stimulus package will restore the economy slipped to 52 percent in late June, down from 59 percent two months earlier, according to a Washington Post-ABC News poll.
Vice President Joe Biden said the administration had “misread” how bad the economy was when it took office but that the stimulus package would help the economy recovery and create jobs.
Senate Republican Leader Mich McConnell Friday called the stimulus plan a failure.
Obama said it takes time for the plan’s money “to get out the door” to pay for roads, bridges and other infrastructure projects that will create jobs “because we are committed to spending it in a way that is effective and transparent.”
Reporting by Tom Doggett; Editing by Paul Simao and Bill Trott