WASHINGTON (MNI) – The following is the text of highlights from
President Obama’s Council of Economic Advisers Fourth Quarterly Report
on the Economic Impact of the American Recovery and Reinvestment Act of
2009:

Key Findings

The Recovery Act has had a significant impact on employment and
economic growth:

* As of the second quarter of 2010, the Recovery Act has raised
employment by between 2.5 and 3.6 million jobs. This puts us well on
track to reach the 3.5 million jobs benchmark by the end of this year.

* CEA estimates that the Recovery Act has raised the level of GDP
as of the second quarter of 2010 by between 2.7 and 3.2 percent. These
estimates are very similar to those of a wide range of other analysts,
including the Congressional Budget Office.

– Outlays in areas such as infrastructure, clean energy, and
communications technology increased by roughly 50 percent between the
first and second quarters of 2010.

The Recovery Act is making investments that benefit the economy
today and far into the future:

– $319 billion in the Act is dedicated to “public investments” that
are not only “helping the economy to recover and put Americans back to
work today, they are also making investments in areas such as clean
energy, health information technology, roads, and the skills of our
workers that will benefit the economy far into the future.” To date,
two-thirds of these funds have been obligated and more than one-quarter
have been outlayed. CEA estimates that the $86.3 of outlays has already
created or saved more than 800,000 jobs as of the second quarter of
2010, an increase of 30 percent over the first quarter.

The Recovery Act is leveraging significant investment from private
companies and other entities:

– A subset of these public investments, $95 billion, is leveraging
external funds from private companies and other entities. For each of
these dollars invested, $4.00 of economic activity is supported
meaning $286 billion of external investments are partnering with
Recovery Act funds to support $382 billion into total project activity.
The benefits of this “co-investment” include:

– Jump-starting private investment: With credit markets still
recovering from the financial crisis, the Recovery Act is directly
stimulating $153 billion in private sector investment alone.

– Aligning economic incentives: As private investors use
significant amounts of their own money in Recovery Act projects, they
put “skin in the game” and have more incentive to use funding
responsibly.

– Increasing overall support: The federal government has a
responsibility to use tax dollars as effectively and efficiently as
possible. Taxpayers get more value when those dollars are leveraged by
private investment.

Clean energy is one of the areas generating the most Recovery Act
outside investment leverage:

– By sector, the largest amount of total activity supported is in
clean energy, where a federal contribution of $46 billion will partner
with $107 billion to support over $150 billion in total investments in
energy efficiency, renewable generation, research, and other areas.

– One such area is the Department of Energys smart grid program,
which will foster smarter energy use, increasing the transparency of how
energy is used. Spurred by a $4.5 billion Recovery Act investment, the
private sector invested an additional $6 billion in smart grid projects,
bringing the total investment to over $10 billion.

– For example, Oregon, Washington, Idaho, Montana, and Wyoming have
been awarded $88 million for a regional smart grid demonstration
project. Bolstered by $90 million in matches from utilities and
technology companies, the $178 million project features 12 utilities and
15 test sites and the states estimate it will create or retain 1,500
jobs across the five states.

Recovery Act Build America Bonds are also generating significant
outside investment, while saving state and local governments billions:

– In economic development, a Recovery Act contribution of
approximately $14 billion is partnering with over $130 in outside
investment to support over $145 billion in economic activity. Build
America Bonds (BABs) make up the majority of that activity.

– As of June 30, 2010, BABs with a total face value of $115 billion
have been issued in 1,446 separate issues in 49 states, DC and 2
territories. BABs allow municipalities to originate loans with 35
percent of the interest paid by the Federal government. The loans are
attractive to a variety of investors, such as pension funds, who do not
benefit from the tax-free status of traditional municipal bonds. By
bringing in more sources of funding, the bonds lower interest costs for
issuers. The Treasury recently calculated that the bonds have saved
state and local governments about $12 billion.

– For example, in Minneapolis the Hennepin County Board raised $27
million through a BABs issuance, which it is combining with state bonds
and county funding to finance the $80 million Lowry Avenue bridge
reconstruction. Estimated savings to Minneapolis taxpayers is between
$3 and $5 million.

Building construction and environmental cleanup and preservation
projects are also benefiting from the leverage effects of the Recovery
Act.

– Other sectors covered in the report include environmental cleanup
and preservation, where an $11 billion investment is supporting over $21
billion of economic activity; construction of buildings, where a $6.4
billion investment is supporting $29.4 billion; and several more.

Recovery Act leverage programs are bringing private capital off the
sidelines and keeping clean energy projects alive during tough economic
times:

– In one case study, CEA examines the Section 1603 Energy Cash
Assistance Program, to see if this co-investment would have happened
without Recovery Act funds in the game.

– By looking at previous years in which no national investment was
spurring private sector activity, compared to years in which there was a
national investment, CEA projects that wind capacity additions in 2009
would have been cut by more than half without the Recovery Act and other
incentives.

– In 2009, 10,000 MW of wind capacity additions were installed, and
the Recovery Act and other incentives were responsible for over 6,000 MW
of those additions.

** Market News International Washington Bureau: 202-371-2121 **

[TOPICS: M$U$$$,MGU$$$,MFU$$$]