WASHINGTON — Democrats and Republicans are locked in a battle over the definition of the word “spent,” and how to count job creation, all in an effort to convince voters about the merits of the stimulus law.
The White House says the stimulus is on track to create or save 3.5 million jobs by the end of the year, shaving at least two percentage points off the unemployment rate in the process, and putting tens of thousands of teachers, police officers and firefighters back on duty.
Republicans, in turn, point to the White House’s own initial estimate that passing the stimulus would keep the unemployment rate under 8 percent — it actually topped 10 percent has since fallen to 9.6 percent. The GOP is so convinced that the $787 billion bill was a waste that they have made ending the stimulus a plank of their platform as they attempt to retake the House.
Whether or not the stimulus has been effective is a key point of contention in many races this fall. In thes 1st District, GOP challenger Randy Demmer calls it a “failed” policy while in the 6th District Democratic challenger Tarryl Clark has hit Rep. Michele Bachmann over her opposition to the stimulus and some public safety jobs it funded.
The White House dismissed polling that shows deep skepticism on the stimulus — like a July CBS News study in which 56 percent of respondents said the thing didn’t work while a further 18 percent said it actually made things worse. Poll deeper, administration officials say, and you’ll find “stratospheric” support for segments of the stimulus like tax cuts, unemployment assistance and increased funding for hiring and retaining teachers.
More importantly, White House spokesman Robert Gibbs said Friday, it was the right decision.
“Sometimes doing what’s right with the economy doesn’t poll well,” Gibbs told reporters in a special briefing. “My hunch is it wouldn’t poll well if we were in a Great Depression.”
Jobs and the politics of repeal
Only about a third of the jobs the administration says have been created or saved can be directly counted. Those are the construction workers working on repairing a road, or teachers who would have been laid off by cash-strapped states but ultimately weren’t.
The rest are indirect jobs — the cook at the Taco Bell where the construction worker goes to lunch, or the Realtor who sold the teacher his new house. It’s a nearly impossible chore to count every single one of them, so instead officials rely on economic formulas to calculate impact.
The administration’s job figures are based on an August report from the non-partisan Congressional Budget Office. But as the Associated Press noted, the administration’s 3.3 million jobs created or saved at this moment is a figure at the high edge of the CBO’s estimate range.
According to the same report, the stimulus could also only be responsible for 1.4 million jobs, which would leave the White House impossibly short of its 3.5 million jobs goal by year’s end.
There are figures that aren’t in dispute: If the stimulus stopped today, an estimated two million families would see their taxes go up by an average of $200 a year, while threatening more than 400 transportation, rural water, waste and clean energy projects planned and funded or already in progress.
Rep. Jim Oberstar, head of the Transportation and Infrastructure Committee, doesn’t mince words when talking about the $677 million allocated to transportation and transit stimulus projects in Minnesota, or the 23,000 jobs he says it created or saved.
“Each of those jobs represents a pay check instead of an unemployment check,” Oberstar said. “It helped families make house payments and buy groceries and, when the work is complete, Minnesota will have better roads and bridges to move goods and services more efficiently.”
“There’s a practical impact as well in what you’re seeing that Republicans proposed in their pledge,” Gibbs told reporters Friday. “ It guarantees rolling back what is left to be spent in the Recovery Act will stop important projects dead in their tracks, like clean energy projects. It will stop tax relief for 110 million Americans. And for folks that talk about not wanting to raise taxes, that’s exactly what that pledge would do and make some — make some tough cuts in programs like education that we know are so incredibly vital for preparing the students of today for the jobs of tomorrow.”
Gibbs was referring to the House GOP’s Pledge to America, in which Republicans say they’d repeal the remaining unspent stimulus money, an amount they say totals more than $100 billion.
It’s right there on page 14.
The trillion-dollar ‘stimulus’ spending bill has made “where are the jobs?” a national rallying cry after failing to live up to the specific promises made by its architects. Instead of remaining below eight percent, unemployment has been above nine percent for 16 consecutive months. This is a far cry from the recovery the American people were promised.
And on page 23:
There is no reason to wait to reduce wasteful and unnecessary spending. Congress should move immediately to cancel unspent “stimulus” funds, and block any attempts to extend the timeline for spending “stimulus” funds. Throwing more money at a stimulus plan that is not working only wastes taxpayer money and puts us further in debt.
But that figure — more than $100 million — was cast in doubt by the White House Friday, as officials said canceling the stimulus in a way that wouldn’t get the federal government sued would leave recover just $18 million.
Defining the word ‘spent’
So just how much stimulus money has been spent and how much is left over?
Believe it or not, the answer to this question depends on your definition of the word “spent.”
Say you have $1,000 in the bank. You pay cash for a new television that cost $500. Then you see a neat Blu-ray DVD player on sale for $150 and a Playstation 3 for $300 — but they’re the last ones Best Buy has in the store.
So you tell the store manager you want to buy them but don’t have the cash now. “No problem,” she says, “Let’s just write a contract that says you’ll buy the DVD player and PS3, pick them up tomorrow and pay when you pick them up.”
As you walk out of the store, how much money have you spent?
The White House would say you’ve got $50 left unspent. Republicans in Congress would contend you’ve got $500 left, because you haven’t yet outlaid the $450 you’re contracted to pay for.
It’s the same with the stimulus. Now bear with me here, because this is about to get really mathy.
Of the total $787 billion allocated to the stimulus, some $551 billion has already been spent, in the form of tax breaks ($243 billion) and outlays ($308 billion). $5 billion was rescinded.
That leaves roughly $233 billion left that’s not already money out the door — though White House officials said much of it has already been obligated for something. Of that amount, $126 billion is contracted project spending, where contracts for work have already been signed but checks aren’t yet in the mail. A further $46 billion is estimated as the amount of tax relief remaining to be funded.
This next bit is slightly fungible. Some $42 billion is set aside for mandated spending on things like food stamps, unemployment and Medicaid. That number could be quite a bit more or less because one doesn’t know precisely how many people will need the safety nets and there’s no hard cap on how much the government can spend there. Put another way, the government isn’t going to say no if you get laid off and need unemployment, even if your specific check would put them over that $42 billion mark.
In fairness, it doesn’t really matter for these purposes whether that $42 billion number is off, or by how much. The stimulus money is authorized by program; Congress said to run unemployment a certain way and that costs what it costs.
All of that leaves us with roughly $18 billion in unobligated project spending. It’s designated mostly for high speed rail, clean energy and a few assorted other programs, but it hasn’t been contracted yet.
Put another way, if you wanted to scrap the stimulus entirely and halt everything that hasn’t already been spent or contracted, White House auditors say you’d have about $18 billion to play with.
White House spokesman Robert Gibbs countered Friday that such a move would be irresponsible — and that the savings the GOP is counting on couldn’t be realized without stopping construction projects halfway to completion and exposing the federal government to lawsuits from companies who have signed contracts for work yet to begin.
But administration officials also admitted in some of the most candid language yet to date that they could have done a better job selling the merits of the bill to a skeptical public.
Officials were asked if the administration was disappointed by anything with the stimulus, to which Ed DeSeve, senior adviser to the president for Recovery Act implementation, replied, “If we were disappointed about anything, it’s our inability to get the message out exactly how the American public want to hear about it.”
They’ve got one month left to fix the messaging and convince that skeptical American public that the stimulus was and is a success.
If things stay the way they are, polls show a skeptical public increasingly willing to give the GOP a chance to try something different.