White House: 650,000 jobs saved, created by stimulus

By Alec MacGillis
Washington Post Staff Writer
Friday, October 30, 2009; 11:07 AM

Reports to be released Friday on the government Web site Recovery.gov are expected to show that the $150 billion in grants and loans made so far under the economic stimulus package have created or saved about 650,000 jobs, White House officials said Friday morning.

White House officials said the reports -- which were filed by state and city governments and other recipients of stimulus grants and loans -- will confirm their recent estimates that the $787 billion package passed in February has so far saved or created about a million jobs, putting it on track to match their estimates of 3.5 million jobs created or saved over the three-year span of the stimulus. That calculation is based on the fact that today's reports do not include much of the package's spending -- tax cuts, safety net spending and fiscal aid to strapped states, which injected tens of billions more into the economy and, in the case of the state aid, forestalled layoffs of state workers.

And because the reports were required only of the direct recipients of stimulus funding and any secondary level of recipient, the reports also do not take into account the jobs that might have been created by subcontractors or suppliers further down the chain. For instance, if a state received a grant and passed it on to a city, and the city then passed the money to a contractor or nonprofit group, any jobs created by the contractor or nonprofit would not necessarily be reported back.

More generally, watchdog groups caution that the reports ought to be taken with a strong grain of salt given the difficulty of actually tallying the effect of government spending. The reports include claims of tens of thousands of teaching and other public-sector jobs saved by the spending, but it is hard to know for sure how many jobs actually would have been lost in the absence of the stimulus. And it is hard to know how to count the job creation in, say, a road repaving project that employs a given crew for a month or two. The reports' bigger value probably will lie in the potential they offer the public for tracking specific projects.

Nonetheless, the White House is poised to make the most of Friday's numbers, with Vice President Biden appearing at noon in Washington to tout the numbers alongside Maryland Gov. Martin O'Malley (D) and California Gov. Arnold Schwarzenegger (R). The reports follow Thursday's report that the economy grew at a rate of 3.5 percent in the third quarter, which economists attribute in large part to the stimulus package and subsequent boosts such as the summer's Cash for Clunkers program.

Republicans, meanwhile, have been questioning the stimulus's impact, calling into doubt the administration's job creation estimates by noting that the unemployment rate has climbed to 9.8 percent. At the time of the stimulus's passage, administration economists Christina Romer and Jared Bernstein predicted that the stimulus would keep unemployment at 8 percent.

Since then, the White House has argued that the recession has turned out to be deeper than it and most others expected, with about 7 million jobs lost so far, and that the unemployment rate would have been far higher without the stimulus spending. At a speech at American University this week, Bernstein said that without the stimulus, the economy probably would not have expanded at all in the past quarter.

"There's no conceivable stimulus package that could be fiscally or economically responsibly implemented that could fully offset the magnitude of these losses," he said. "But by saving or creating 3.5 million jobs, which we're on track to do, we can put a serious dent in that pain."

Today's reports follow the release Oct. 15 of reports for a more limited slice of spending, about $16 billion in direct federal contracts that were reported to have created about 30,000 jobs.

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