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A Project of The Annenberg Public Policy Center

Counting Conundrum

We’ve been questioning the Obama administration’s claim that the stimulus bill would "save or create more than 3.5 million jobs" since the president began saying it. In February, we pointed out that although several economists made such a projection, they all said there was a lot of uncertainty surrounding these estimates. Late last year, the administration’s effort to count actual stimulus-created (or saved) jobs was plagued by the reporting of jobs in nonexistent congressional districts. And now, it appears, we’ll never really get an accurate count of actual jobs.

As ProPublica’s Michael Grabell reports, the administration will now count any job paid for with stimulus money, regardless of whether the job would have existed in the absence of stimulus money or not. A Dec. 18 memo from Office of Management and Budget Director Peter Orszag said:

OMB Memo: [R]ecipients will no longer be required to make a subjective judgment on whether jobs were created or retained as a result of the Recovery Act. Instead, recipients will more easily and objectively report on jobs funded with Recovery Act dollars.

Granted, asking recipients to decide whether or not a job would have existed in some kind of parallel universe without the stimulus money is sometimes pretty subjective. All the more reason for Obama to couch his "will create" claims with a "could."

Grabell quotes Harvard University labor economist Lawrence Katz as saying the whole counting exercise is just "silly." To truly determine what jobs exist now but wouldn’t have existed without the stimulus, Katz says, there would have to be a control group — such as a state that doesn’t get stimulus funds, to be compared with one that does. Katz says a more accurate estimate would come from economic models — like the ones the White House touted early last year, the ones that are still filled with uncertainty.

In late November, the Congressional Budget Office said that the stimulus had added an additional 600,000 to 1.6 million jobs in the third quarter of 2009 than would have been the case otherwise. That large range, CBO said, "reflect[ed] the uncertainty involved in such estimates."