Economy Alarm: FACT CHECK: White House Oversells Stimulus Again

White House Boasts Stimulus is one of the “Boldest and Largest” Investments in History

“With over $787 billion in funding, the American Recovery and Reinvestment Act is one of the single boldest and largest investments in the U.S. economy in the nation’s history…Within the Reinvestment spending of the Recovery Act, over $100 billion is invested in innovative and transformative programs.” (“The Recovery Act: Transforming the American Economy Through Innovation,” whitehouse.gov)

Credibility Crash: AP Calls Out White House’s Lofty Stimulus Projections

The Obama administration claimed this week that $100 billion invested in innovative technologies under the economic stimulus law is “transforming the American economy” by putting the nation on track for technological breakthroughs in health care, energy and transportation.

But an examination of details in the 50-page report unveiled Tuesday by Vice President Joe Biden reveals something a bit different: a collection of rosy projections that ignore many of the challenges, pitfalls and economic realities in all those areas.

A look at how the administration’s claims compare to the facts:

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Increasing renewable energy

The claim: Thanks to the stimulus, the U.S. is on track to “doubling U.S. renewable energy generation capacity and U.S. renewable manufacturing capacity by 2012.”

The facts: While the Recovery Act has helped increase renewable energy, the fact that it is a one-time jolt makes it difficult to project that the growth will continue for the next couple of years. George Sterzinger, executive director of the Renewable Energy Policy Project, a Washington think tank that promotes renewable energy, said the Recovery Act’s cash grant program for renewable energy projects “jump-started a lot of stuff. But there’s nothing beyond that.”

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Cutting the cost of solar power

The claim: Government stimulus money will lead to “cutting the cost of solar power in half by 2015, putting it on par with the cost of retail electricity from the grid.”

The facts: That projection assumes a huge payoff from stimulus spending on technology improvements in solar energy. Nelson, who has worked in renewable energy for 25 years, called the prediction “highly unlikely,” unless there is a big increase in utility-scale solar power projects. (Frederic J. Frommer, “FACT CHECK: Stimulus assessments overly optimistic,” Associated Press, 8/26/2010)