President Obama’s early, overeager claims of his stimulus package’s success have crumbled under media scrutiny. After making big promises, he needed to make claims about “jobs created or saved,” but polls show that the public hasn’t bought it.
And so Obama and his allies are now furiously spinning a new report by the Congressional Budget Office that they think offers them vindication. They should not, because it does not.
Obama claimed last month that his package had already “created or saved” 1.1 million jobs — 640,000 of them directly through stimulus spending, and the rest indirectly. But these claims withered in the sunlight.
Tens of thousands of jobs have proven doubtful, imaginary or erroneous. (Our running tally at WashingtonExaminer.com now has the number of bogus stimulus jobs at nearly 93,000 so far.) It’s no surprise that only 7 percent of Americans believe that the stimulus has created or saved any jobs, according to a recent CBS News poll.
This week’s CBO report provided something that almost looked like vindication. Almost. And Vice President Biden, dubbed by Obama the “stimulus sheriff,” was quick to pounce.
“This new report from the Congressional Budget Office is further evidence of what private forecasters and government economists have been saying: The Recovery Act is already responsible for more than one million jobs nationwide,” Biden said in a statement on Tuesday. “[T]he experts have spoken,” he added.
Liberal groups friendly to the president’s cause were quick to suggest that the government is undercounting stimulus jobs.
But the CBO report doesn’t say that, or anything like it.
CBO’s report estimates somewhere between 600,000 and 1.6 million jobs linked to the stimulus. That’s a broad range, and the low-end estimate is about half of what Obama claims. If accurate, it would mean that Obama has spent about $392,000 for each stimulus job so far.
But more important is how CBO arrived at its numbers. For the report does not exactly claim to offer a new measure of stimulus success. Rather, it recalculates job estimates that CBO made in March, without changing any of the assumptions made then.
CBO’s new estimate is not based on anything that happened in the economy during the last eight months with respect to unemployment or gross domestic product growth or data from stimulus recipients. It is based on how fast stimulus money has gone out the door. We know this because the report says so, if not very clearly.
In March, CBO looked at the amounts to be spent, applied predetermined multipliers to each type of stimulus spending (purchases, state grants, rebate checks, etc.), and added up the total. It thus estimated eight months ago that the stimulus would create or save between 600,000 and 1.5 million new jobs by the end of September.
Stimulus funds went out faster than the $185 billion that had been expected by the end of September. Accordingly, when the new totals were multiplied into the same formula used in March, the new result was just slightly different — a high of 1.6 million jobs instead of 1.5 million.
Consider: Based on this methodology, if unemployment were at 30 percent today, CBO’s report would still say that the stimulus created or saved between 600,000 and 1.6 million jobs. Alternatively, if every unemployed American had suddenly found a job and bought a new puppy over the summer, the CBO report would still say that the stimulus created or saved between 600,000 and 1.6 million jobs.
CBO’s figures don’t lie, but liars do figure. Fortunately, however, voters have already figured out the stimulus package, and if they can’t corral “Stimulus Sheriff” Biden, they can at least create a new job for him.
David Freddoso is an editorial page staff writer who can be reached at [email protected].
