U.S. President Barack Obama is scheduled to sign the $787 billion economic stimulus plan into law at a ceremony in the western city of Denver, Colorado on Tuesday. Mr. Obama calls it a "major milestone on the road to recovery" for the U.S. economy, while critics insist it is too expensive and will create fewer jobs than proponents insist.
The bill, which includes government spending and tax cuts intended to help push the U.S. economy out of recession, is the president's first big legislative victory since taking office last month.
Congress, which is controlled by Mr. Obama's Democratic Party, approved the plan on Friday, with legislators voting mostly along party lines. The Senate passed the plan with only three minority Republicans voting in favor of the bill. The plan received no Republican support in the House of Representatives.
During a radio address on Saturday, President Obama said the tax cuts and domestic spending projects will create millions of jobs and spur economic growth.
"It will save or create more than 3.5 million jobs over the next two years, ignite spending by businesses and consumers alike, and lay a new foundation for our lasting economic growth and prosperity," said Mr. Obama.
The following day, White House senior adviser David Axelrod cautioned on the Fox News Sunday television program that, while there will be signs of economic activity very quickly, it could be next year before improvement shows up in government reports - particularly with respect to the nation's 7.6 percent unemployment rate.
"The president has said it [i.e., the economy] is likely to get worse before it gets better. It is true that, without this program, it could be much, much worse," said Axelrod. "And, so, I don't expect the arrow [i.e., jobless number] to bend down by the end of the year. But I do expect the rise in unemployment to be retarded by the things that were done this week."
Moody's Economy.com chief economist Mark Zandi who also appeared on Fox News Sunday said President Obama's contention that the stimulus plan will create or save 3.5 million jobs is optimistic.
"It will make a difference. It's a good plan and I think it will help the economy. By my estimate, it will add two to 2.5 million jobs - more than would be the case without stimulus by the end of 2010," said Zandi. "That translates into a lower unemployment rate of about a point to a 1.50 percent. So it is meaningful. But I don't think it's enough. The economy is in a very difficult situation. The difficulties require a larger package. And I think a year from now, we will be talking about stimulus again, yes."
The bill still has strong critics, including Senate Banking Committee Republican Lindsey Graham who spoke Sunday on ABC television's This Week program.
"Eleven percent of the money in this bill hits [i.e., will be spent] in 2009. Most of the money in this bill is in entitlement spending. It's not going to create jobs. Twenty-seven percent of this bill is now tax cuts. That's down significantly," said Graham. "Now, those tax cuts, most of them, only $3 billion, goes to small business. Seventy-five percent of the people in this country work for small business. Of the $787 billion bill, $3 billion is directed to small businesspeople. I think we missed the mark a long way. We increased new government. We did not increase new jobs."
Mr. Obama's former rival for the presidency, Republican Senator John McCain, says the President backtracked on promises of bipartisanship to get the bill passed. Former Democratic President Bill Clinton praised the stimulus package, saying it puts money in the hands of people who need it to survive - through unemployment benefits, food stamps, and tax cuts.