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A Project of The Annenberg Public Policy Center

Stimulus Jobs, Re-revisited

Reports from journalists and the Government Accountability Office last month about problems with the data on Recovery.gov cast doubt on the site’s claim that more than 640,000 jobs had been created or saved by the Obama administration’s American Recovery and Reinvestment Act. Meanwhile Obama upped the ante, putting the figure at more than 1 million. On Nov. 12, for example, in announcing this month’s jobs summit, he said that the stimulus had “created and saved more than a million jobs.”

Now some good news for the White House: According to the Congressional Budget Office, the actual number may be more than twice what Recovery.gov says, and as much as 50 percent more than what Obama has been saying. The nonpartisan agency found that:

CBO, Nov. 30: [I]n the third quarter of calendar year 2009, an additional 600,000 to 1.6 million people were employed in the United States, and real (inflation-adjusted) gross domestic product was 1.2 percent to 3.2 percent higher, than would have been the case in the absence of ARRA.

That’s a pretty broad spread, but CBO says the range includes the views of most economists and reflects the inherent uncertainty of such estimates. The agency, unlike Recovery.gov, didn’t depend just on reports filed by recipients of stimulus funds to make its calculations, because the reports don’t provide a complete picture of the law’s impact on jobs. For one thing, the reports measure only jobs created or saved by employers who receive stimulus money directly or their immediate subcontractors, but not lower-level contractors. In addition, the fact that grant recipients and their workers have money in their pockets means they’ll spend some of it on products and services, creating more jobs. And the reports, CBO notes, only cover some of ARRA’s spending; the effects of tax cuts, transfers to individuals (such as unemployment payments) and other elements of the stimulus package aren’t measured on Recovery.gov.

Instead, CBO, taking the money spent so far and estimates of the stimulus act’s impact on spending and revenue, arrived at its figures using evidence of how earlier policies have affected the economy as well as various economic models. The agency’s numbers were remarkably consistent with its estimates from March 2009, when it projected that 600,000 to 1.5 million jobs would be created or saved and real GDP would be 1.1 percent to 3.0 percent higher than it would have been without the stimulus.

CBO also estimated that about $190 billion of ARRA’s authorized $787 billion had been spent by the end of September, about $100 billion of it in direct outlays and $90 billion in tax cuts. That leaves nearly $600 billion to go.