White House Defends Stimulus Act Despite Government Audit Questioning the Job Numbers

November 24, 2009 - 7:47 AM
The White House defended the effectiveness of the economic stimulus act on Monday after a government audit last week called many of the reported job numbers into question.
(CNSNews.com) - The White House defended the effectiveness of the economic stimulus act on Monday after a government audit last week called many of the reported job numbers into question.
 
The Government Accountability Office (GAO) reported that $173 billion of the $787 billion stimulus package had been paid out by the federal government as of Sept. 30. That’s about 22 percent of the total, and it indicates that 78 percent of the stimulus funds have not been paid out – at a time when unemployment was rising.
 
Asked why 78 percent of the stimulus funds were not spent in the first fiscal year, White House spokesman Robert Gibbs told CNSNews.com that the GAO report probably is counting only the money that actually has been spent, not the amount of money that has been obligated.
 
“For instance, on a road project, the check may not come until the very end,” Gibbs said. “That doesn’t mean the contract can’t be agreed to and the money can’t be obligated and the effects go with [the] construction company as well as the indirect jobs that are ultimately created. I can get you an updated figure, but I think more than 50 percent (of stimulus funding) has been obligated,” Gibbs said.

(The GAO says groups receiving stimulus funding must report how many “direct jobs” were created or retained with the taxpayer money.  Indirect jobs are not counted.)
 
Between February, when President Obama signed the American Recovery and Reinvestment Act into law, and the end of the fiscal year in September, more than 100,000 reports were submitted to the recovery.gov Web site from recipients of stimulus money, as required by law.
 
But according to the Government Accountability Office (GAO) audit, 3,978 reports showed that more than 50,000 jobs had been created or saved – even though no stimulus money had been received or spent; and 9,247 reports showed no jobs created – despite expenditures of $1 billion.
 
Other “reporting anomalies” included discrepancies between the amount of stimulus money awarded and the amount actually received. The GAO chalked it up to “problematic issues in the reporting.”
 
The Obama administration says it has created “unprecedented transparency” on how the stimulus money is being spent by posting the information on its recovery.gov Web site.
 
“If you ask economists, they’ll say this has had a positive impact on our economy and our economic growth,” White House Press Secretary Robert Gibbs told CNSNews.com on Monday.
 
Gibbs stressed that economic growth has gone from negative 5.9 percent in the first quarter of 2009 to plus 3.5 percent in the third quarter of the year. “I’m not even good at match and I know that’s a pretty big variance in an economy that’s contracting and an economy that’s growing,” Gibbs said. “A lot of people are rightly concerned about employment in this country.”
 
As CNSNews.com has reported, the national unemployment rate climbed 26 percent, from 8.1 percent in February (when the stimulus bill was passed) to 10.2 percent in October.
 
According to the GAO, groups receiving stimulus fund “appear to have made good faith efforts to ensure complete and accurate reporting,” but confusion reigns – and “there are a range of significant reporting and quality issues that need to be addressed,” the watchdog said in its November 19 report.
 
Some recipients don’t understand the reporting requirements, and that leads to “inconsistencies” in the reporting, the watchdog said.
 
The Obama administration says the stimulus funding created or saved 640,329 ‘jobs’ through Sept. 30. The law’s overall goal is to create or save 3.5 million jobs. But critics of the stimulus plan have questioned how the government can prove a job is saved.
 
Among other things, the GAO is recommending that the administration clarify how the recipients of stimulus money are supposed to report jobs created or saved.
 
On Oct. 30, Vice President Joe Biden said, "The Recovery Act is performing as advertised, playing its part in lifting Americans back up.” Biden said the Recovery Act funding was responsible for creating “over one million jobs so far.” And while there may be accuracy problems with some of the data, “[W]e are on the right track,” Biden insisted.
 
The authors of the GAO report were contacted Monday, but could not be reached for comment.