Jobs Numbers and White House Propaganda

One of the cornerstones of the stimulus bill was to create jobs and help the economy get back on its feet.  The Obama administration estimated that between 3 and 4 million jobs would be created or saved once the bill was enacted.

During the past nine months since the enactment of the stimulus bill, unemployment has risen from 8.1 percent to 10.2 percent, a 26 percent jump in unemployment.  Meanwhile, the Obama administration claims that 640,000 jobs were created or saved because of the stimulus bill.

A funny thing happened on the way to the promised job creation:  Federal agencies and the White House have been lax in oversight of the expenditure of funds and jobs numbers have been over-estimated.

One reason is that agencies are under pressure to spend a lot of money as quickly as possible.  In October 2009, Subsidyscope, an initiative of the Pew Charitable Trusts, released a report on stimulus funding for the Federal Aviation Administration’s (FAA) Airport Improvement Program.  According to Pew’s October 7 press release, “The FAA this year has directed about $272 million in stimulus funds — or roughly 25% of the $1.1 billion provided to the agency for airport work — to projects that scored poorly on the agency’s national priority rating system, which the FAA uses to grade potential projects.”

The FAA typically steers grants to projects scoring above 41 on a scale from 1 to 100. Even though the FAA raised the threshold to 62 for stimulus grants, it appears to have been an exercise in futility.  According to an October 7, 2009 article in The Examiner, “The lowest ranked of all stimulus grants will be $1 million for baggage handling at the Rockford, Illinois International Airport, which primarily serves cargo planes, and $1.85 million to expand the passenger terminal at the Pocatello, Idaho Regional Airport.  Those two projects both received priority ratings of 31 points.”

Trying to justify the funding, The Wall Street Journal reported on October 7 that “Bob O’Brien, executive director of Chicago Rockford International Airport, said it is ‘difficult to know’ how many jobs will be created by the $1 million grant his airport is getting, but added that he has seen ‘50 different faces’ of people working on the project.”

On November 7, 2009 The Examiner reported, “More than ten percent of the jobs the Obama administration has claimed were ‘created or saved’ by the $787 billion stimulus package are doubtful or imaginary, according to reports compiled from eleven major newspapers and the Associated Press.  Based only on our analysis of stimulus media coverage in the last two weeks, The Examiner has created this interactive map to document exaggerated stimulus claims.  The map, which will be updated as new revelations appear, currently reflects an exaggeration by the Obama administration of about 75,000 jobs, out of the 640,000 jobs supposedly ‘created or saved.’”

The exaggerated jobs included the following:

• On November 4, 2009, The New York Times reported that, “In June, the federal government spent $1,047 in stimulus money to buy a rider mower from the Toro Company to cut the grass at the Fayetteville National Cemetery in Arkansas. Now, a report on the government’s stimulus  Web site improbably claims that that single lawn mower sale helped save or create 50 jobs.”
• On November 10, 2009 the Denver Post noted that, “Two child-development centers – one in Colorado Springs and the other in Saguache County – reported they had created or saved more than 292 jobs combined.  However, the money –  totaling about $650,000, or $2,226 a job – was used to give employees cost- of-living raises.  Only three new jobs were created.”
• According to a November 13, 2009, article in the Las Vegas Sun, “…the Nevada Forestry Department had calculated that a project in rural Nevada created 34 jobs under the first guidelines. Under more recent direction, the project was estimated to have created nine jobs,…”
• Propublica.org reported on November 5 that “Last week, the federal government released the first comprehensive tally of the nearly $800 billion economic stimulus package.  And while the White House has heralded marquee projects like road construction and solar panel factories, the stimulus package is also made up of hundreds of smaller purchases like office supplies, gasoline and lab rats.”
• Probably the most bizarre story came from ABC News on November 16:  “Here’s a stimulus success story:  In Arizona’s 15th congressional district, 30 jobs have been saved or created with just $761,420 in federal stimulus spending.  At least that’s what the Web site set up by the Obama administration to track the $787 billion stimulus says.  There’s one problem, though:  There is no 15th congressional district in Arizona; the state has only eight districts.”

These independent investigations have prompted the White House to back off the number.  According to ABC News, “The Obama administration, under fire for inflating job growth from the $787 billion stimulus plan, slashed over 60,000 jobs from its most recent report on the program because the reporting outlets had submitted ‘unrealistic data…’  One of the red flags was that  ‘One recipient – Talladega County of Alabama – claimed that 5,000 jobs had been saved or created from only $42,000 in stimulus funds.’”

In addition, the Government Accountability Office testified before Congress on November 19 that more than 58,000 jobs had been created or saved by 4,000 stimulus recipients, even though they had not yet received any money.  On the other hand, there were 9,200 recipients that reported no job creation, despite receiving a total of $965 million.

Taxpayers deserve straight answers about the reporting errors.  First, suspicions are that since this was President Obama’s first significant legislative initiative, inflating the number of jobs makes the decision to spend $787 billion more palatable.  Second, contractors are more apt to inflate jobs numbers to increase their chances of being awarded the money.  Lastly, the government has never been very good at oversight.

Saying that 640,000 jobs have been created or saved is an insult to the common sense of Americans when unemployment has increased from 8.1 percent to 10.2 percent since the enactment of the stimulus bill.

According to officials who are working on the stimulus program, no changes to the current list of hundreds of non-existent congressional districts or the inaccurate jobs numbers will be made until January.  On November 20, Citizens Against Government Waste made White House “stimulus czar” Ed DeSeve its Porker of the Month for his role in presiding over the wasteful stimulus bill and the failed recover.gov website.  His official title is Special Advisor to the President, Assistant to the Vice President and Special Advisor to the OMB Director for Implementation of the Recovery Act.

Mr. DeSeve is in charge of interagency coordination and ensuring that the stimulus money is spent “quickly and effectively.” He told ABC’s Jake Tapper on October 30 that he had been “scrubbing” the job estimates so much that he now has “dishpan hands” and his “fingers are worn to the nub.” 

The Obama administration told taxpayers that they would be able to track the stimulus money, and Mr. DeSeve is supposed to ensure the accuracy of the information.  Clearly, his “dishpan hands” were not clean enough.  The Recovery Accountability and Transparency Board has an $84 million budget.  In May, the administration gave $18 million to Smartronix, a company that has received $260 million in federal contracts since 2000, mostly through the Department of Defense, to beef up recovery.gov.  That should have been more than enough to provide reliable reports.

  — David E. Williams