The Obama administration's recovery act has created or saved over 1 million jobs, top administration officials told reporters this week. While official data compiled and released by the independent recovery act oversight board this week showed that direct recipients of federal dollars under the act reported creating at least 640,000 full-time jobs, Jared Bernstein, a top economic advisor to Vice President Biden, stated that the report only told part of the story.
The new report described only 'a subset' of the total number of jobs 'directly created or saved' by the President's economic recovery act, Bernstein explained on a conference call with reporters. Essentially, the new report was based on reports made by some 57,000 public and private entities about the number of jobs they were able to save or create with the assistance of federal recovery act money.
Analysis of the 'jobs multiplier' created by other recovery act money, such as unemployment insurance expansion, tax rebates, stimulus checks to seniors and veterans, expanded health benefits payments and additional circulation of money through the economy was not included in the report. According to Bernstein, the evidence suggests the total number of jobs reported by recipients and created with as a result of the 'jobs multiplier' is at least 1 million.
'And the recovery act is on track to create or save 3.5 million jobs before it winds down at the end of next year,' Bernstein pointed out. So far $340 billion from the recovery act have been obligated in direct payments to public and private recipients as well as in tax credits, unemployment compensation and stimulus rebates.
Senior White House Advisor Ed DeSeve explained that the new report showed that an estimated 300,000 jobs related to public education had been saved or created by the recovery act. At least 80,000 construction jobs, virtually all of which are private sector jobs, have also been saved or created. He also explained that 90 percent of the recipients of federal dollars reported on the number jobs they create door saved with recovery act money.
While this latter number was higher than expected, a quick calculation shows that as many as 6,000 entities failed to report for some technical reason or other misunderstanding. The true jobs number is likely to be higher.
The hardest economically hit states have seen a disproportionately larger share of federal aid, Bernstein added. Those states have seen the largest numbers of jobs created or saved.
He refused to predict whether the positive GDP numbers would be sustained, but added, 'there's a lot of ammunition left in this stimulus package.'
White House Deputy Communications Director Dan Pfeiffer linked the recovery act to the latest GDP report which showed the US economy grew by 3.5 percent in the third quarter of 2009, the largest economic growth in two years.
'It's a real symbol of how far we've come since President Obama came to office in January,' Pfeiffer said. From economic free-fall, the administration's 'aggressive' economic recovery package took the first steps to kick-start job growth and fill the largest hole in the economy since the Great Depression, he said.
President Obama understands that sobering jobs numbers show that the country has a long road ahead to full economic recovery, Pfeiffer added. He also slammed critics of the President's economic recovery policies for underestimating the importance of job creation under the recovery act. As a result of the President's policy, 'there is someone who has a job today who didn't have one yesterday.'
Pfeiffer did not point out that nearly every Republican member of Congress refused to support the President's economic policy.
Independent analysis of economic data by the Economic Policy Institute confirmed the administration's estimates. A new memo from that think tank this week revealed that the Obama administration's recovery act added at least 2.7 percentage points to the GDP for the third quarter and created or saved between 1.1 million and 1.5 million jobs.
