Recovery Act Created or Saved Over 1 Million Jobs

The Obama administration's recovery act has created or saved over 1 million jobs, top administration officials told reporters this week. While official data compiled and released by the independent recovery act oversight board this week showed that direct recipients of federal dollars under the act reported creating at least 640,000 full-time jobs, Jared Bernstein, a top economic advisor to Vice President Biden, stated that the report only told part of the story.

The new report described only "a subset" of the total number of jobs "directly created or saved" by the President's economic recovery act, Bernstein explained on a conference call with reporters. Essentially, the new report was based on reports made by some 57,000 public and private entities about the number of jobs they were able to save or create with the assistance of federal recovery act money.

Analysis of the "jobs multiplier" created by other recovery act money, such as unemployment insurance expansion, tax rebates, stimulus checks to seniors and veterans, expanded health benefits payments and additional circulation of money through the economy was not included in the report. According to Bernstein, the evidence suggests the total number of jobs reported by recipients and created with as a result of the "jobs multiplier" is at least 1 million.

"And the recovery act is on track to create or save 3.5 million jobs before it winds down at the end of next year," Bernstein pointed out. So far $340 billion from the recovery act have been obligated in direct payments to public and private recipients as well as in tax credits, unemployment compensation and stimulus rebates.

Senior White House Advisor Ed DeSeve explained that the new report showed that an estimated 300,000 jobs related to public education had been saved or created by the recovery act. At least 80,000 construction jobs, virtually all of which are private sector jobs, have also been saved or created. He also explained that 90 percent of the recipients of federal dollars reported on the number jobs they create door saved with recovery act money.

While this latter number was higher than expected, a quick calculation shows that as many as 6,000 entities failed to report for some technical reason or other misunderstanding. The true jobs number is likely to be higher.

Even in its limited review, the AP found job counts that were more than 10 times as high as the actual number of paid positions; jobs credited to the stimulus program that were counted two and sometimes more than four times; and other jobs that were credited to stimulus spending when none was produced.

For example:

- Some recipients of stimulus money used the cash to give existing employees pay raises, but each reported saving dozens of jobs with the money, including one Florida day care that claimed 129 jobs saved.

- A Texas contractor whose business kept 22 employees to handle stimulus contracts saw its job count inflated to 88 because the same workers were counted four times.

- The water department in Palm Beach County, Fla., hired 57 meter readers, customer service representatives and other positions to handle two water projects. But their total job count was incorrectly doubled to 114.

Those errors were included in an early progress report on the stimulus released two weeks ago that featured numerous mistakes, including a Colorado business' claim that its stimulus contract created more than 4,200 jobs. TeleTech Government Solutions actually hired 4,231 temporary workers for its stimulus project, but most of them worked for five weeks or less and the others no more than five months, company president Mariano Tan said.

http://www.politicalaffairs.net/article/articleview/9127/