WASHINGTON (Reuters) - President Barack Obama and his advisers do not favor second stimulus package now to cut the highest U.S. unemployment rate in nearly 26 years, Vice President Joe Biden said in an interview aired on Sunday.
Looking back to January when Obama took office, Biden said: “The truth is, we and everybody else misread the economy ... We misread just how bad the economy was.”
“So the second question becomes, did the economic package we put in place, including the Recovery Act, is it the right package given the circumstances we’re in? And we believe it is the right package,” Biden told ABC’s “This Week” in an interview taped during a trip to Iraq.
Asked if another stimulus package was needed, Biden said, “I think it’s premature to make that judgment.”
Government data last week showed that employers cut another 467,000 jobs in June and the U.S. unemployment rate hit 9.5 percent, its highest since August 1983.
The worse-than-expected job losses renewed fears that recovery from the U.S. recession that began in December 2007 could be slow and prolonged.
The White House expected the U.S. unemployment rate to peak at 8 percent when it worked with Congress to push through the $787 billion American Recovery and Reinvestment Act.
However, Obama has said he now expects U.S. unemployment to top 10 percent in coming months.
Some economists warned when Congress was working on the stimulus bill that a bigger program was needed to reverse the worst U.S. economic downturn in decades.
Biden said most economic forecasts at the time about how bad unemployment would get were all “in the same range,” although it is clear now they were too optimistic.
The pace of job creation should increase over the next several months as more highway construction and other stimulus projects come on line, Biden said.
“This was set up to spend out over 18 months. There’s going to be major programs that are going to take effect in September,” including $7.5 billion for broadband expansion and other money for high-speed rail and implementation of a new electric grid, Biden said.
Reporting by Doug Palmer; editing by Alan Elsner