Questions Surface on Impact of Stimulus Plan

But state governments are getting checks. Unemployed workers are getting more benefits. Social Security recipients got a check in the mail in May. People who are working have lower withholding. Business tax cuts are filtering through, and we're even getting some infrastructure spending.

So everything is going according to script, at least so far.

GWEN IFILL: Well, let me ask Eric Cantor about that. You've had some disagreements on this point with other members of your body, but also with the White House. What do you think abut how the package has been going? And you didn't support it, it should be said.

REP. ERIC CANTOR, R-Va.: Right, Gwen. I think that if there's one thing we can all agree upon, as we heard the majority leader in the House, Steny Hoyer, say, as well as the vice president, that we're all disappointed where things have turned out as we had hoped a lot differently.

And, you know, clearly, the stimulus or so-called stimulus plan that spent almost $800 billion has not worked. We were promised -- the president said we would keep unemployment under 8.5 percent. We're now over 9.5 percent on our way to 10 percent. We have had a massive hemorrhaging of jobs in this economy.

And, you know, the president said that we had to act and act quickly. And I guess that's why Speaker Pelosi felt it very necessary to jam this bill through the House, and now we're seeing that it didn't work.

So the question really is, what is the president going to do about it? As the vice president indicated, it is his economy now. And so let's start to do things in a smart way rather than rush to judgment and then flush out the money without any result.

GWEN IFILL: Let me ask Chris Van Hollen about this, because it was Vice President Biden who said there had been a misreading of the economy, something the president backed away from a little bit, but maybe you can explain to us what it is the vice president meant by that?

REP. CHRIS VAN HOLLEN, D-Md.: Sure. I think what he meant to say was that the economy that President Obama inherited from George Bush, the economic downturn and the recession inherited from George Bush, turned out to be deeper and the decline steeper than people, including many economists, anticipated.

But that's a very separate question as to whether or not we'd be better off today if we did not do the economic recovery plan, which is what Eric is proposing, that we have done -- not have passed that plan.

The fact of the matter is, as Mark Zandi said, we're a whole lot better off today than we would have been if that had not been passed. The fact that we're not in an even better place is a reflection of the fact that the economy is in very deep trouble.

Now, the fact is also that this is a two-year economic recovery plan. About $200-plus billion dollars has already been committed or spent and that, over the next quarter, we anticipate more outlays.

Because one of the things the president was very clear about and the Congress was very clear about is that we want to make sure that these monies are spent wisely, that they're not wasted, and that requires greater oversight and transparency. So we're trying to accomplish both goals, and we are on track.

REP. CHRIS VAN HOLLEN: Well, the testimony in front of our committee -- as you said, we had three governors, and all three governors talked about the fact that there had been job creation and jobs saved in their states as a result of this economic recovery package. They were unanimous on that point, that their states were better off as result of this and that the people who lived in the state were better off as a result of this.

Now, they did -- what they said was that, because of the accountability provisions, some of the money hasn't gotten out of the door as fast as it might have.

But, again, we want to make sure -- and in order to maintain the credibility of this program -- that those monies are not misspent. And that requires more oversight and more accountability. And we've asked the governors to participate in making sure that they're the taxpayers' watchdogs with the federal government to make sure those monies are well spent.

GWEN IFILL: Mark Zandi, has that money been spent the way it was supposed to have the accountability provisions, as Mr. Van Hollen described them? Have they slowed the process that it was -- this was supposed to be a speedy injection, and has that slowed it?

MARK ZANDI: Yes, I think to some degree, sure. I mean, I think everyone wants to make sure that the money gets out in a proper way, and that requires a lot more information to be provided, and that slows things down.

But let me say, you know, I do think things are getting out pretty close to what I would have expected. Now, the infrastructure spending, the money for roads and bridges and other things, that's going to take time. And under the best of circumstances, I don't think that we would expect really to see that towards the second half of this year into 2010.

All the other parts of the stimulus -- the tax cuts, the tax credit for a first-time home-buyer, the benefits to businesses, the aid to state government -- that is already flowing to the economy. And I think it is having impact.

And here's the most important point: The biggest economic impact from the stimulus isn't now. It's really going to be in the third quarter, the Q3, and, more importantly, in Q4 of this year. So we really won't know with any degree of certainty until very late this year whether this stimulus plan is working and working well enough.

REP. ERIC CANTOR: Well, Gwen, I am just sitting here a little bit in disbelief about, you know, making the excuses for the failure of this bill. The president promised that we would do something to stave off the job loss.

And if you are talking about what a stimulus bill should do, it was about preserving, protecting and creating jobs. This bill has failed miserably towards that end.

Chris indicates that maybe we as Republicans wanted to do nothing. Now, he knows that's not true. We presented a plan to the president. It was a plan focused on the job-generators, which were small-business people.

We've got to go about getting investment started again in this economy. That's the only way that recovery will take place. Any kind of lasting rebound has to come from investor confidence, from working families, from small businesses putting their money back to work again.

This bill has failed in terms of that end. What we've seen now is, as you indicated, Gwen, tremendous job loss. People are losing jobs at about eight jobs a minute. That's eight households no longer seeing their paycheck, wondering how they're going to get through the end of the month.

If you're a factory worker in the Midwest, if you haven't lost your job already, you're worried you're going to lose it. If you are a retail sales clerk, you know what? You are worried about your job, because what do we have coming next is we've got a wage hike that will be imposed on employers.

Now what we see in Congress is a massive attempt to impose a national energy tax on families. We've got too many things going in the opposite direction when we should be about creating jobs here.

GWEN IFILL: Let me ask you about this, Mr. Cantor. They say they have created or saved 150,000 jobs so far. Is there any argument to be made that Larry Summers and others have made, the economic adviser, that there should have been more money spent on this?

REP. ERIC CANTOR: How can you say that? How can you say that when unemployment now is approaching 10 percent? The president has promised that we were going to save unemployment from going past 8.5 percent. That's why we needed to act with such urgency.

As Chris indicates, now, all of a sudden, we're realizing that there's a lot of waste involved when you flush out $800 billion from Washington. Never does the federal government perform the way that we could see small businesses perform.

We've got to go put in confidence back in to our economy. We do that by helping small businesses. We need an investment-led recovery, not Washington spending our way out. All we're doing is piling up the debt right now. And I think it's reflected in the lack of confidence in the economy and the markets and certainly in the polling over the last few days.