White House changes how stimulus jobs are counted

By Tami Luhby, senior writer


NEW YORK (CNNMoney.com) -- Now we'll never know just how many jobs were funded by the $787 billion stimulus program.

Until a policy change last month, Obama administration officials had said they would keep a running count of the number of jobs created or saved by the massive American Recovery and Reinvestment Act.

Going forward, the White House will only tally jobs one quarter at a time and not attempt to determine a total.

On top of that, the administration has directed Recovery Act recipients to report all jobs funded with stimulus money - regardless of whether they were new jobs or existing ones. That change gets rid of the controversial "jobs saved" designation, which asked recipients to determine which positions would have been eliminated were it not for stimulus.

The new requirements apply to the reports that recipients are filing now for the last three months of 2009. Those figures, which will be released to the public by month's end, will be the second concrete look at stimulus' employment impact. The first tally showed that 640,000 jobs were created or saved through September.

"We are trying to make it as easy and simple for the funding recipients," said Tom Gavin, a spokesman for the White House's Office of Management and Budget.

The change did not garner much attention until Monday, when Rep. Darrell Issa, R-Calif., criticized it, saying the new policy disguises stimulus' failure.

The Recovery Act's impact on employment has been a flashpoint since the massive package was enacted last February. The administration has said the act is on track to create or save 3.5 million jobs. Unlike the quarterly recipient reports, the 3.5 million figure includes positions directly funded by the program, as well as those that economists believe were created or saved by increased consumer, business and government spending.

Congressional Republicans, pointing to the 10% unemployment rate, argue the stimulus program has been a gigantic waste of money that has done little to boost employment or help the economy.

The recent change is tantamount to "cooking the books," said Issa, the top Republican on the House Oversight and Government Reform Committee.

"They are trying to inflate the numbers because the numbers don't look that good," Issa said. "They want a better number."

Simplifying the reporting

Administration officials decided to change the reporting guidelines after meeting with funding recipients, federal agencies and economists. The shift is in line with recommendations made by the Government Accountability Office, which also raised concerns about the accuracy of the jobs tally released in October.

One of recipients' main complaints about the reporting process concerned the "jobs saved" designation.

"The recipients were telling us they were having trouble determining whether a job was saved or not," said Yvonne Jones, a director on the GAO's strategic issues team.

The new definition is clearer and simpler and should increase the accuracy of the jobs figure, Gavin said.

Economists said the change would not alter their view of the stimulus package and its impact on employment.

Gus Faucher, director of macroeconomics at Moody's Economy.com, said he doesn't put too much stock in the quarterly reports because they don't measure stimulus' full impact on the economy.

"This may get us slightly closer to the truth, but it is still only one part of stimulus," said Faucher, who supports the program. "It doesn't get at the indirect jobs, which over the long run are more important."

Likewise, Allan Meltzer, a political economy professor at Carnegie Mellon University, said the change doesn't mean much. Meltzer, who opposes the stimulus package, skewered the administration in October for trying to tally jobs saved.

"They are playing a numbers game," said Meltzer, who served on the Council of Economic Advisers in the Reagan administration. "I don't think the object should be to try to improve the numbers. It should be to try to create jobs and they are not creating jobs." To top of page

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