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Exactly an year after it has been implemented, the American Recovery and Reinvestment Act of 2009, or ARRA, has ''clearly halted an economic freefall'' and created nearly 2 million jobs, Vice President Joe Biden is to say Wednesday at the Economic Daily Briefing. The ARRA has so far disbursed $300 billion in outlays and taxes and intends to disburse 70% of Recovery Act funds by September 30.
The Vice President will deliver his "Annual Report to the President on Progress Implementing the American Recovery and Reinvestment Act of 2009" at the Economic Daily Briefing. The report summarizes the progress so far made as well as projections for the coming months, while noting that almost 20 million Americans got extended unemployment benefits from the Act, and over 95% of working families had their taxes cut.
The Council of Economic Advisers or CEA said in its quarterly report recently that GDP had been positively impacted by ARRA. "ARRA added between 2 to 3 percentage points to real GDP growth in the second quarter of 2009; between 3 and 4 percentage points in the third quarter, and between 1.5 and 3 percentage points in the fourth quarter. This is broadly similar to those of a wide range of other analysts," it said.
The growth in GDP was 5.7% in the fourth quarter of 2009, compared to a 5.4% fall in the same period in 2008. In the first and second quarters of 2009, the GDP declined 6.4% and 0.7%, respectively. In the third quarter of 2009, the GDP grew 2.2%.
According to the report, payroll job losses are also lessening with the help of ARRA and, unemployment insurance claims have been generally declining since the peak in March 2009.
In its first quarterly report released at the end of September 2009, CEA found that ARRA had created or saved over 1 million jobs. In their second quarterly report, CEA said this positive trend continues, with ARRA having created or saved 1.5 to 2 million jobs in the fourth quarter of 2009. The Congressional Budget Office, or CBO, in their latest report on the status of ARRA implementation, also found that ARRA funding has supported up to 2.4 million jobs.
Dwelling on ARRA's fast infusion of funding into the economy, the report says, ''Understanding that speed in getting funds into the economy is crucial to achieving the goals of the Act, agencies, such as the Department of Defense, have reallocated funds from projects that, while worthy, are not able to execute in a timely fashion.''
As of September 30, 2009, ARRA infused $195 billion into the economy, compared to the CBO's target of $185 billion.
So far, nearly $300 billion has been disbursed in outlays and taxes for an average monthly rate of about $27 billion. Of that $27 billion, $11 billion was in the form of tax relief and $16 billion in spending.
Looking forward, the government plans to disburse 70% of Recovery Act funds, or $551 billion, in outlays and taxes, by September 30, for which a disbursal of $32 billion per month is required. ''We are on track to achieve this goal,'' the report adds. From February onwards, monthly tax relief should increase to $18 billion from $11 billion.
Further, Biden is to say that in the coming months, there will be a modest uptick in the monthly outlay rate of the Act. The mix in spending will shift from being primarily payment-driven to being more evenly matched between payments and projects.
Monthly project outlays are expected to more than double from the 2009 average. Payment outlays in 2010 may see a slight drop off in pace, as payments were the portion of the Act most quickly disbursed in 2009 to rescue the economy from freefall.
Further, in 2010, work will get underway on several of the longer-term signature investments in the Recovery Act. ''fueled largely by a strong first year performance of getting dollars awarded and projects obligated and started, the year ahead will see a capitalizing on an inventory of work that is awarded and 'ready to go'. ''
According to the report, ''With a strong and increasing base of awards that have been made, and with large numbers of awards that still have more than half of their work remaining to be done, the level of on-the-ground work being done by the Recovery Act will remain strong and the pace of outlays will accelerate during Fiscal Year 2010.''
An additional $1.5 billion of innovative surface transportation projects to support jobs and economic growth from coast to coast is to be announced Wednesday.
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