The Obama administration said the economic stimulus package the president signed into law Tuesday would create or save more than 170,000 jobs in Maryland, Virginia and the District, but some local experts doubt that claim.
The regional employment boost would be part of the 3.5 million jobs nationwide that the White House said would be preserved or created over the next two years under the $787 billion stimulus plan.
Critics call the numbers inflated.
“That’s a stretch,” said Peter Morici, a professor with the University of Maryland’s Robert H. Smith School of Business and former chief economist at the International Trade Commission.
Morici expected the package to produce between 2 million and 2.5 million jobs nationwide, and then only temporarily. The latest Bureau of Labor Statistics data showed the United States losing 3.6 million jobs from December 2007, when the recession began, to last month. Morici expected the losses to climb to 5 million “before this thing starts to bite in any meaningful way.”
The White House released a state-by-state breakdown of stimulus labor projections Tuesday, showing the plan delivering 93,000 jobs to Virginia, 66,000 to Maryland and 12,000 to the District. Of those, 64,200 would be contained in the District and its neighboring suburban congressional districts.
“What we’re seeing here is the first guess as to what their next guess is going to be,” said John Kercheval, a financial expert who teaches at Georgetown University’s McDonough School of Business.
The employment numbers, he said, would likely prove to be “quite a bit off” as the effect of the stimulus bill becomes clearer.
And potentially offsetting any work force benefit from the stimulus bill is the cut to defense jobs that could accompany Obama’s promised troop pullout from both Iraq and Afghanistan, Kercheval said.
The Washington area is heavily dependent on federal procurement, with major defense contractors such as Lockheed Martin, Northrop Grumman and General Dynamics buoying its economy.
“If you kicked in even a heavy-duty economic stimulus package targeted to this area, but you’ve cut back on defense spending because you’re spooling down the war, then you could have a negative effect because of that alone,” Kercheval said.
The stimulus will create some jobs, said Tad DeHaven, budget analyst with the Cato Institute, a libertarian think tank. But the figures produced by the White House won’t show the corresponding job loss caused by increasing taxes or crowding out private investment, he said.
Nine in 10 of the jobs detailed by the White House would be in the private sector. With billions of dollars in new infrastructure spending, the ailing construction industry would reap the largest benefit in projected job growth, followed by the retail and hospitality industries, according to a January report from Obama’s economic advisers.
Stimulus jobs
» District 12,000
» Maryland 66,000
» Virginia 93,000
» Total 171,000
