Contracts might not be getting enough credit for stimulus job creation

A new analysis by a private sector group tracking Recovery Act spending indicates that contracting activity has created considerably more jobs than the Obama administration has calculated.

Onvia, a Seattle-based information technology firm that follows stimulus spending through its Recovery.org Web site, conducted a state-by-state analysis of the number of jobs that have been created from federal, state and local Recovery Act contracts.

Analysts calculated that as of Nov. 30, $37.5 billion in stimulus-related contracts had reached the private sector, creating 407,000 jobs this year. Onvia arrived at the jobs figure by using a multiplier formula the White House Council on Economic Advisers developed, which suggests that 10.9 jobs would be created through every $1 million in federal spending.

The District of Columbia led states and localities in generating work opportunities; Onvia's analysis showed that Recovery contracts signed in the capital generated 67,203 jobs. The district, however, is likely a statistical outlier because many federal agencies are located there, said Onvia Chief Information Officer Eric Gillespie. The other leading job-creating states were California, followed by Pennsylvania, Maryland, Florida and Michigan.

Onvia also tracked stimulus dollars that have been allocated or advertised and are scheduled to be awarded in 2010. The group found that about $100 billion in stimulus contracts will reach the private sector next year, creating about 1 million jobs. Onvia expects California, Texas, Florida, New York and Washington state to be the biggest engines of job growth through stimulus contracts in 2010.

Gillespie said the majority of contract spending to date has gone to transportation and infrastructure projects. In 2010, Onvia expects the spending to shift to more sustainable areas such as health care, clean water and renewable energy.

Onvia's numbers are considerably different from those offered by Obama administration, which estimated that of more than 640,000 jobs saved or created by the stimulus as of October, 30,000 could be attributed to contract spending. The administration's figures were based on reports filed by direct recipients of grants, contracts or loans.

But, Gillespie said after digging deeper into the spending, Onvia found the number of jobs created by contractors to be considerably higher. For example, some funds disbursed to states in the form of grants were later spent through contracts, he said. In addition, Onvia tracks contracts that have been awarded, although in some cases some or all of the funds might not yet have been paid to the contractor.

Onvia's analysis comes on the heels of Tuesday's report by the Congressional Budget Office that stated between 600,000 and 1.6 million jobs were saved or created by the stimulus through the end of September. CBO's findings, unlike the recipient reports and Onvia's analysis, include stimulus spending through tax cuts and transfer payments to state and local governments.

"From independent economists to Congress' own nonpartisan research body, the experts have spoken and the debate is no longer whether the Recovery Act is creating and saving jobs, but how we provide even more opportunities to drive growth and support American workers," Vice President Joe Biden said.

The White House's Recovery Act coordinator Ed DeSeve used the CBO report as an opportunity to respond to a recent request for information by House Minority Leader John Boehner, R-Ohio, a frequent critic of the Recovery Act.

"There is nothing mysterious, ephemeral or uncertain about the important role that the Recovery Act has played in saving the jobs of hundreds of thousands of Americans," DeSeve wrote.

Skeptics, however, still are not buying the figures.

"The Obama administration continues to use propaganda to mislead the American people about the effects of the so-called stimulus," said Rep. Darrell Issa, R-Calif., the ranking member of the House Oversight and Government Reform Committee.

On Thursday, the administration will hold a forum at the White House on jobs and economic growth. Industry executives, small business owners, labor leaders and nonprofit heads are expected to attend.