Report Card Due on Stimulus
Thursday, October 15, 2009
The public will get its first granular look Thursday at how the $787 billion stimulus package is being spent -- but the information may leave armchair auditors dissatisfied, and the data on job-creation data will be less than definitive.
Recipients of stimulus grants, loans and contracts -- which make up about a third of the total package -- were required to file at the start of the month their first reports on how they spent the money and how many jobs were created. On Thursday, the government's http:/
The stimulus also included tax cuts, fiscal aid to states and safety-net spending. The information released Thursday will cover just a sliver of the total stimulus spending, with details on $6 billion to $12 billion in contracts, according to the non-profit OMB Watch. The reports will be dominated by agencies that are spending their money through direct contracts, such as the Department of Energy, which is cleaning up nuclear-waste sites in Washington state and South Carolina, and the General Services Administration, which is renovating federal buildings.
A more representative sample about 10 times larger will be reported at the end of the month, including the contracts awarded by states and local governments, which received stimulus grants for such projects as highway infrastructure and home weatherization. "This is just the tip of the iceberg," OMB Watch Director Gary Bass said.
Nonetheless, both stimulus supporters and skeptics will be poring over the reports for evidence of the impact of the spending, one of the most charged questions hanging over President Obama's agenda. The White House estimated when the bill was enacted in February that it would create or save 3.5 million jobs, and administration economists estimate that it has saved or created 1 million positions so far. Skeptics note the rise in unemployment to nearly 10 percent; the White House says things would be much worse without the stimulus.
Others say the reports being released this month will underscore the challenge of trying to quantify the jobs being created. Initial recipients of the stimulus money, and any government or company that they pass it on to, must report how they use the funds and how many jobs they create. But the reporting requirements do not apply to additional levels of contractors who receive the money.
As a result, the data being reported will not be consistent. Some recipients may attempt to estimate how many jobs are created by contractors, but others will not. Some will report jobs that have not yet been filled, while others will stick to actual hires. Some will use one standard for counting a job that is filled for only few weeks or months, some will use another. The numbers will not take into account the "multiplier effect" that economists say occurs with stimulus spending as the injection of the money creates demand and jobs among suppliers further down the food chain.
Michael Balsam, an executive with Onvia, a Seattle firm that created its own Web site, http:/
The White House's initial estimates for job creation attempted to capture the full impact with a formula that forecast 10.9 jobs created or saved for every million dollars spent. That may prove to be more on target in some instances than others.
The Academy for Educational Development in Washington received $3.7 million to market a new National Health Service Corps, which the White House predicted would create 40 jobs. An academy spokeswoman said her organization will hire five people, though some more might be hired by a recruiting firm.
But Goodwill Industries, which got a $19 million contract to provide mentoring, said the government's estimate of 209 jobs was not wildly off from the 158 it plans to hire. And the city of Roanoke, which got $963,000 for energy efficiencies, said it plans to hire 11 people -- the same number as predicted.