Stimulus impact on distressed areas is questioned

By Robert Schroeder, MarketWatch

WASHINGTON (MarketWatch) — A top Democratic House lawmaker on Wednesday questioned whether President Barack Obama’s $787 billion economic stimulus plan is working as intended, in the latest evidence of dissatisfaction with the huge recovery package.

“It is unclear as to whether recovery act funds are going where they are needed most,” said Rep. Edolphus Towns, the New York Democrat who chairs the House Committee on Oversight and Government Reform.

Towns cited in particular transportation-related spending in hard-hit communities. He requested a meeting with Transportation Secretary Ray LaHood to underscore the importance of ensuring stimulus spending “is focused on these economically distressed areas.”

Towns spoke at the beginning of a committee hearing about the stimulus package, which is under attack from some Republicans and the subject of questioning even among Democrats, with the unemployment rate at 9.5%. In an interview with NBC News on Tuesday, Obama said jobs would emerge at the end of a recovery, rather than the beginning.

But, facing a persistently weak economy and unyielding job losses, pressure is increasing on the White House and Congress for additional steps.

House Majority Leader Steny Hoyer, D-Md., recently said Congress needs to be “open to whether we need additional action,” and Vice President Joe Biden said last weekend that the administration “misread the economy.” Obama, however, said “there’s nothing that we would have done differently.”

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