White House Offers Soft Math, Sleight of Hand

Donald Lambro
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Posted: Jun 10, 2009 12:01 AM
White House Offers Soft Math, Sleight of Hand

WASHINGTON -- For a president who promised that his actions would be the most transparent in U.S. history, key details in Barack Obama's economic-stimulus program have been frustratingly opaque.

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Some might call them invisible or illusionary, certainly slippery, maybe even tricky.

"Does anyone really know how many jobs the stimulus has saved or created? Does anyone know how much stimulus money has actually been spent?" House Republicans asked Monday.

Not with any precision. President Obama and his administration throw out a lot of big, impressive numbers: We will spend $800 billion to "save or create" 3.5 million jobs. But it turns out the numbers and goals often come with a lot of mathematical caveats, definitional contingencies and narrowly proscribed, convoluted loopholes and escape hatches.

"The truth is, even the Obama administration isn't able to say for sure how many jobs the stimulus is saving and/or creating," ABC News bluntly reported last week.

"With its promises to 'save or create'" so many jobs, the news network said, "the Obama White House has set a fuzzy bar for itself; no one will ever really be able to say whether it's been cleared."

Vice President Joe Biden's chief economist Jared Bernstein says it's impossible to say how many projects approved by the administration have really gotten under way because "it's such a moving target."

For example, take the jobs number. The White House said at the end of May that the program had saved or created nearly 150,000 jobs. But that's almost impossible to verify because the jobs calculation is actually based on estimates of how poorly the economy and the jobs picture might have been if the stimulus had not been enacted.

And what about this so-called "saved jobs" concept? That's a very tricky number open to all kinds of mathematical Ponzi-scheme configurations.

"The country has lost 1.3 million jobs since February, a figure the Obama administration says would have been far higher if not for the recovery effort," wrote White House reporter Charles Babington of the Associated Press. Apparently, you can save all kinds of jobs with that kind of soft math.

So what about that 150,000-jobs number? It turns out that these are not necessarily long-term, full-time jobs. Many, if not most, will end when the public-works money runs out and the project is completed.

After last Friday's unemployment numbers showed the jobless rate had jumped to 9.4 percent in May, and a Gallup Poll found public support for Obama's handling of the economy slipping, the White House said it was going to speed up the stimulus expenditures. Just how it would do that was unclear, but officials said it would "save or create" 600,000 jobs in the next 100 days.

Not full-time jobs necessarily but temporary part-time jobs. Or as Jared Bernstein told CNBC Monday: "The 600,000 jobs are full-time equivalence, meaning that if there are two part-time jobs, they count as one full-time job."

Then there is the question of how much of the $800 billion in stimulus money been spent so far? When pressed to come up with hard numbers, Bernstein told reporters Monday: "We're up to about $135 billion in terms of obligations."

"Obligations" sounded a bit too vague to NBC's White House reporter Chuck Todd. "Obligated, not necessarily spent yet?" he inquired.

"Right," Bernstein finally said. "Spent out is closer to $44 billion."

So here we are at midyear, and the administration has actually spent a little over 5 percent of its stimulus money -- a small fraction of what Obama said was needed to move the once-mighty $14 trillion economy out of its recession.

How much more will be obligated or spent this summer to meet the White House's 100-day jobs goal? "We're unable to make that estimate at this point," Bernstein says.

Let's return to Obama's 150,000-jobs claim. Keith Hall, commissioner of the Labor Department's Bureau of Labor Statistics -- whose job is to count the number of jobs there are in the economy -- was asked at a Joint Economic Committee hearing last Friday if he could substantiate that claim.

"No. That would be a very difficult thing for anybody to substantiate," Hall replied.

The very nature of spending-stimulus programs -- and the reason why they never work -- is that it takes a very long time for the money to travel through the government's bureaucratic pipeline to the states and localities and through the bidding process before any jobs are created. Obama's economists warned of this in policy position papers last year. By the time most of the money is "spent," the recession will be long over.

Only a fraction of the $800 billion will be spent in this fiscal year, which ends Sept. 30. Seventy percent of the money won't be spent until the end of the summer in 2010 when the administration says the economy will be growing again.

But in the end, despite the administration's belief it is creating net new jobs, each dollar it borrows or taxes out of the economy to create, in Joe Biden's words, "make-work jobs," is one dollar not available to the private sector to invest and spend on real, full-time jobs.