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Federal Contractors: Stimulus Created 30,000 Jobs

Thursday, 15 Oct 2009 11:30 AM

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WASHINGTON -- Businesses receiving federal contracts under President Barack Obama's economic stimulus program reported creating or saving more than 30,000 jobs in the first months of the program, according to data released Thursday by a government oversight board.

The numbers, based on jobs linked to less than $16 billion in federal contracts, represent just a sliver of the $787 billion stimulus package. But they offer the first hard data on the early effects of the program. Until now, the White House has relied on economic models to argue that the program created jobs and eased the recession. Critics point to rising unemployment to argue it wasn't worth the cost.

The data rebut criticism that the stimulus simply padded the government payroll, creating only public-sector jobs. The businesses reporting jobs ranged from small roofing companies hired to repair military buildings to large corporations paid to clean up nuclear waste.

But the numbers represent such a small snapshot, they are unlikely to significantly change the debate over whether stimulus was the right prescription for an ailing economy.

Jared Bernstein, the chief economic adviser to Vice President Joe Biden, said it was too early to draw conclusions from the data "but the early indications are quite positive."

In the short term, the most significant thing about the job numbers may be that they exist at all. The government has never before attempted to track the effects, in real time, of a huge government program. The data released by the independent Recovery Accountability and Transparency Board allow taxpayers to see not just where their money is going, but what the government is getting in return and how many people are on the job.

Broader numbers on local stimulus spending, for everything from repairing public housing and building schools to repaving highways and keeping teachers off the unemployment lines, won't be available until late this month. Those figures are expected to show early stimulus money saving thousands of teaching jobs and creating construction work for highway projects nationwide.

Taken together, the two batches of data will offer a head count of people working on stimulus projects. Because nobody knew what to expect from the numbers, the White House set no goals and raised no expectations for what they would reveal.

The reporting does not attempt to measure jobs created by $288 billion in tax cuts or the sizable increases in spending on Medicaid and unemployment benefits. The White House has said that, when considering those factors and estimating the ripple effect through the economy, more than 1 million jobs have been created or saved so far.

Obama has set a goal of creating or saving 3.5 million jobs by the end of next year. Since signing the stimulus in February, Obama has watched the economy shed millions of jobs as unemployment climbed higher than his economists predicted. The White House says things would have been far worse without the stimulus.

Contracting jobs are normally temporary and some are part-time. Auditors, fearing businesses would use part-time jobs to inflate the numbers, required companies to convert all jobs numbers to full-time. That means a 20-hour-a-week roofing job is counted as half a job.

Copyright © 2009 The Associated Press. All rights reserved.

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