By Silla Brush - 07/17/09 01:14 PM EDT
Lawrence Summers, President Obama's top economic adviser, defended the stimulus program on Friday but noted its "peak" impact on the economy won't be felt until the end of 2010.
The $787 billion program has been criticized for not creating jobs fast enough as unemployment rates continue to rise.
"Five months after the passage, we are on track to meet that timeline," Summers said in a speech at the Peterson Institute for International Economics. Lags in spending and hiring, he said, would drive much of the impact of the program into 2010. The stimulus program is intending to save or create 3.5 million jobs.
Skeptics and many in the Republican Party have heavily criticized the stimulus program, arguing that its impact has been negligible and that it will drive the economy further into debt. Some on the left are already calling for a second stimulus package to bolster the economy, as many economists expect unemployment to exceed 10 percent by the end of 2009.
"Soaring unemployment, rising deficits and spending like there’s no tomorrow has done nothing to help put families back to work; in fact, our economy keeps getting worse," House Minority Leader John Boehner (R-Ohio) said Friday.
The Federal Reserve said Thursday that it expected unemployment rates to remain between 9 percent and 10 percent through 2010.
In a wide-ranging speech, Summers said that the economy has "walked some substantial distance back from the abyss" since January.
Summers said that unlike some recessions in which worker productivity declined alongside growth rates, the current recession has seen some measures of productivity growth. The administration is attempting to direct resources in the stimulus program and federal budget toward developing new jobs in the healthcare and energy industries.
On trade, Summers said the administration "would very much like to see those agreements," referring to pending trade deals with Colombia, Panama and South Korea.
"We would very much like to to see the Doha round completed," he said. Still, Summers said that "resisting steps back towards economic nationalism" and promoting domestic and global growth were top priorities at the moment.