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White House touts 1 million jobs from stimulus

The number of jobs created or saved is based on reports by recipients of the stimulus money, prompting some skepticism.

October 31, 2009|Peter Nicholas

WASHINGTON — The White House said Friday that the $787-billion stimulus package had created or saved about 1 million jobs so far -- a number that is hard to verify because of the guesswork involved in determining whether businesses had retained workers due to the stimulus who otherwise would have been laid off.

After compiling reports from more than 100,000 businesses, nonprofit groups and state and local governments that received stimulus money, the Obama administration said the program was on pace to save or create 3.5 million jobs by next year.

"So there's a lot more job creation to come from this act before it leaves the scene," Jared Bernstein, an economics advisor to Vice President Joe Biden, told reporters.

The White House released its findings with a bipartisan flourish, inviting Republican Gov. Arnold Schwarzenegger of California and Democratic Gov. Martin O'Malley of Maryland to a news conference touting the results. Accompanying the White House announcement was a video showcasing workers who said they owed their jobs and car purchases to the stimulus.

The job figures released by the White House were based on detailed reports filed by certain recipients of about $160 billion in stimulus money. The reports show the employers created or saved more than 640,000 jobs, the White House said. About 325,000 of those jobs were in education; 80,000 were in construction.

The White House said the job impact rises to 1 million when indirect benefits of the federal spending are included, as when a worker hired with stimulus dollars spends money at a restaurant.

Excluding indirect job-creation, California logged the most jobs created or saved, with 110,185. Next were New York, with 40,620, and Washington state, with 34,517.

With nationwide unemployment approaching 10%, the White House data provoked some skepticism. The Obama administration is basing its estimates partly on a concept that is difficult to measure: jobs saved. State governments and other agencies may be using subjective criteria in deciding whether stimulus money legitimately saved a job that was about to be eliminated.

Peter Morici, an economist and professor at the University of Maryland, said that claims of jobs saved were "not verifiable. It's only verifiable in the loosest sense."

Morici added: "The impact of the stimulus is less than the president is claiming and more than the Republicans will admit. It certainly has had an effect. But 1 million jobs is a fantasy."

Republican lawmakers were dismissive of the White House report.

Rep. Eric Cantor of Virginia, the Republican whip, said: "Americans, particularly those with friends and family out of work, know that the administration's claims of stimulus success and jobs saved or created are not serious."

But Obama officials said they were confident their numbers were accurate.

Edward DeSeve, an Obama advisor helping oversee the stimulus, said recipients of the funds had no incentive to inflate job estimates.

"What we have to do is rely on the fact that our public officials are honest," DeSeve said. He added that "there's no advantage to a state from overstating or understating."

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peter.nicholas@latimes.com

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