White House says stimulus created 3.5mn jobs

WASHINGTON - US President Barack Obama lauded the “success story” of General Motors’ stock sale as the White House claimed a $787 billion stimulus bill would produce 3.5 million jobs by yearend.

Touting GM’s near-record initial public offering Thursday as validation of his controversial move to bail out the auto giant last year, he said: “A few years ago, this seemed impossible.”

“There were plenty of doubters and naysayers that said it couldn’t be done,” he said as news came that GM sold nearly 500 million shares

The offering, which raised a near-record $20 billion for the auto giant, opened at $35 a share - higher than the $33 a share initially requested by the Treasury Department. That made it one of the largest IPOs in history.

Obama said the news signals that Detroit is “once again on the rise,” thanks to tough love from his administration: In exchange for spending $50 billion to rescue the company in June 2009, the White House required a bold restructuring including management changes.

Thursday’s IPO slashes the government’s stake in GM from 61 percent to 36 percent and puts the company on track to repay taxpayers. “We are finally starting to see some of these tough decisions that we made … pay off,” the president said.

Many Republicans chided Obama for spending government money on a company they thought should be allowed to fail. But the White House argued that saving GM would preserve thousands of jobs and pay off in the long run.

“That wasn’t an acceptable option, to throw up our hands and quit,” Obama said. “That’s not what we do as a country of optimistic and determined people who don’t give up when times are tough.

Meanwhile, the latest quarterly estimate by the White House Council of Economic Advisers said the stimulus bill has generated or saved between 2.7 million and 3.7 million jobs, and thus “by some measures has exceeded the original goal of creating or saving 3.5 million jobs by the end of 2010.”

While unemployment is now much higher than the White House predicted in 2009 that it would be if Congress enacted the stimulus plan, Obama has argued that this is only because the recession was worse than almost anyone expected.

(Arun Kumar can be contacted at arun.kumar@ians.in)