By Sam Youngman - 07/22/09 01:27 PM EDT
Peter Orszag, Obama's director of the Office of Management and Budget (OMB), made his remarks in New York City hours after Republicans blasted White House Chief of Staff Rahm Emanuel's declaration that "we saved the economy."
Orszag's and Emanuel's offense on the economy seems to suggest a White House rattled by recent polls that show Americans increasingly pessimistic about Obama's ability to correct the global economic crisis.
Despite Emanuel's assertion to The New York Times ahead of Obama's Wednesday night primetime press conference, Orszag joined the president in warning that unemployment will continue to rise.
As the White House stands by its prediction that the national unemployment rate will reach 10 percent in the next month or so, Orszag said the administration expects national and state unemployment rates "to remain stubbornly high over the next few quarters even if economic activity itself picks up steam."
"The economy is no longer on the brink, but it is not yet the robust economy we desire," Orszag said. "Job losses may not be as severe, but job growth will not return for some time. And more tough choices will have to be made in order to put our nation on a sustainable fiscal path."
Orszag noted the criticism the recovery act has faced, but insisted that the stimulus package was "designed to take effect over a two-year period with about 70 percent of all funds going out in the first 18 months."
"After five months, and despite what you might have heard from the media, implementation of the recovery act is on schedule," he said. "If anything, according to the Government Accountability Office, recovery funds are going out the door at a quicker pace than expected."
Orszag noted that more than $220 billion has already gone out the door. Republicans, however, have been critical of such spending, which they say has so far shown few results.
To that end, Orszag said that "job growth typically lags behind economic activity" and "both administration and independent forecasts have predicted that only a very small part of the total job creation expected from the recovery act would take place by the end of the second quarter."
"Therefore, evaluating how well the recovery act is working based on recent movement in employment numbers is misleading," Orszag said.
Because of that, the White House OMB director warned, "this year will continue to be a difficult one for the American economy — and particularly and unfortunately, a tough year for American workers."