Obama claims 650,000 jobs "saved or created" via Porkulus

By which we should deduce that over a million jobs got saved or created, indirectly, according to the White House.  The official report will come out later today, but Jake Tapper grabs the advance leak from the White House and runs it down.  Pay very close attention to the sources of this data:

The Obama administration’s $787 billion stimulus bill directly saved or created about 650,000 jobs as of the end of last month, administration officials announced this morning.

The numbers come from Congressionally-mandated reports submitted earlier this month by tens of thousands of state and local governments, private companies, colleges, universities, and community organizations nationwide, administration officials said, with the majority of the funds coming from state governments.

Factoring jobs indirectly created from the stimulus — not reflected in these numbers — an administration official says in a statement that “because these reports show that less than half of the spending through that date created or saved about 650,000 jobs, they confirm government and private forecaster’s estimates that overall Recovery Act spending has created and saved at least 1 million jobs.”

Moreover, the administration emphasized, these reports do not reflect the job impact of the stimulus plan’s tax cuts, direct payments to individuals, and grants and awards of amounts under $25,000 per recipient. Nor, officials cautioned, do they reflect the indirect job impact of the funds, such as when employers for stimulus projects hired to meet new demand or when hired workers spent their paychecks.

The “majority of funds” came from state governments because Porkulus distributed the money in block grants to the states.  What did the states do with that money?  They did save jobs, but primarily bureaucratic jobs.  States used the money to temporarily paper over budget gaps which would have forced the layoffs of state employees, which should have been a necessary step in slimming down state-level spending.

The administration will claim that it saved the jobs of teachers, police officers, and firefighters with the data submitted by the states.  Indeed, we have already seen this in New Hampshire, which listed almost all of its “saved or created” jobs from their education system. What I wrote at the time is just as applicable now:

In looking at the table on the last page of the report, it becomes clear that New Hampshire and the federal government directed the money primarily at politically sensitive government jobs.  Over two-thirds of the jobs are in the Department of Education, and another 745 in “government services.”  Directing the money there allowed New Hampshire to avoid the politically difficult job of downsizing and streamlining in response to the downturn in revenues during the recession.  The White House can claim that they saved the job of teachers, police officers, and firefighters whose jobs were never in jeopardy, and New Hampshire avoided cutting jobs elsewhere by shifting the money to cover budget shortfalls.

Meanwhile, what happens to these jobs when Porkulus runs out?  Almost none of these jobs are established on new economic growth.  They’re either jobs that New Hampshire has to fund anyway (teachers, police officers, firefighters) or one-off project jobs that will disappear when the money does.

No one was going to have a mass layoff of police officers and teachers in New Hampshire or anywhere else.  The jobs really at risk were administrative jobs within state government, primarily union jobs (in large part represented by Obama’s ally, the SEIU), as states had to confront an economic reality of lower revenue and rising spending.   Porkulus provided a one-time method of ignoring that reality for a few months by burdening the entire nation with the bad policy decisions of the individual states.

But all that did was to delay that day of reckoning, not eliminate it.  When the grant money runs out, those states will still have to make tough decisions on the size and costs of their bureaucracies.  They will still have to either raise taxes or start trimming their payrolls, and it won’t be the teacher or the firefighter who gets the pink slip.  Porkulus will do the same thing that Cash for Clunkers did, which was to postpone the inevitable — and cost us a fortune in doing so.

Update: By the way, it was almost two months ago when the administration first claimed it had saved or created one million jobs.  I guess nothing much happened after September 10th.

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David Strom 8:41 PM on January 30, 2023