GOP questions White House's 'fuzzy' math with stimulus jobs

The White House estimate of jobs created or saved by the $787 billion stimulus is prompting charges of “fuzzy” math from Republicans.

The stimulus will have created or saved about 1 million jobs by the end of the September, according to the latest stimulus report by the White House Council of Economic Advisors (CEA). That's roughly a 25 percent jump from the 750,000 jobs that the CEA in May had predicted would be saved or created over roughly the same period.

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Christina Romer, CEA chairwoman, touted the latest estimates, released on Sept. 10, as a evidence that the stimulus is helping the economy during the recession. President Obama has said that the stimulus would create or save up to 4 million jobs over the next two years.

"We think we are on the trajectory we were expecting," Romer said in a conference call with reporters.

But the jobs numbers - based on macroeconomic models and not on hard data - are serving as fodder for Republicans already skeptical of the stimulus's impact.

Rep. Darrell Issa (Calif.), the top Republican on the House Oversight and Government Reform Committee, said in a statement that the White House models were "flawed" and that the administration has used them to produce "deceptive and self-serving" reports.

Issa suggested it's impossible to measure how many jobs are created or saved.

“Despite skyrocketing unemployment rates and millions of lost jobs, the administration can use these models time and again to avoid accountability," Issa said.

Senate Minority Leader Mitch McConnell  (R-Ky.) said the administration's numbers don't mesh with reports of increasing unemployment.

"How can anyone tell the American people with a straight face that the more than 2 million jobs that have been lost since the stimulus was enacted is actually 1 million jobs ‘saved or created?'" McConnell said in a statement.

At the very least, the discrepancy in stimulus estimates speaks to the inexact science of judging the stimulus's effect. The CEA report acknowledged that its estimates were "preliminary" and "subject to substantial uncertainty," particularly because they come just months after the stimulus was passed and as the money is still being doled out.

Romer noted that the CEA's projections are "very much in the range" of projections made by Moody's, the Congressional Budget Office (CBO) and other independent economists.

"I think a reasonable range [of jobs saved or created] is from 600,000 to 1.2 million jobs. That kind of encompasses what a lot of people are saying," Romer told The Hill.

One CEA model suggests that the stimulus saved or created 1.04 million jobs and another CEA model puts the number at 1.16 million. Moody's Economy.com believes the stimulus created or saved 1.07 million jobs, and the CBO said that jobs created or saved by the stimulus were as few as 600,000 and as many as 1.53 million.

Romer said that the increase in the recent CEA's jobs estimates compared to its May projections could partly reflect the fact that stimulus aid was delivered to states faster than expected. But she downplayed the difference in estimates, noting that small tweaks to economic models that assess short periods can change the projections. She also noted that the May estimates are different because they focused on a slightly different time frame -- the first 200 days of the stimulus -- than the period the recent CEA report tried to assess, the second and third quarters of 2009.

"I would stress the uncertainty," she said. "That's one of the reasons we give so many other people's estimates."

Dean Baker, co-director of the Center for Economic and Policy Research, said the White House numbers are "reasonable.

"There is obviously a lot of imprecision in this sort of exercise, but I think they covered the plausible range," Baker said.

Romer defended the value of using economic models from attacks by Republicans, who haven't put out their own economic projections.

"Exactly what we do is do the best statistical work we can," she said. "We write a long report so that if somebody wants to criticize, they can read what we did. That's the way all econ research is done: Put the information out there, do the best we can."

The "created or saved" metric used by the administration also underscores the varying intended effects of the stimulus. The aid to states in the stimulus was aimed at preventing cuts of teachers, law enforcement officers and other public workers during state budget crises. Other parts of the stimulus, including tax breaks for small businesses and billions in transportation funding, were included as incentives for companies and government agencies to hire new workers.

More concrete data about stimulus jobs will arrive in October, when states and other stimulus money recipients must file official reports to the federal government describing how they've used the money. But even that won't be precise since much of the stimulus spending, such as the tax cuts and the aid to states, should indirectly save or create jobs. Those jobs won't show up in the October reports, which will describe only hard data about stimulus projects.

"Inherently, we're always going to have to be in a world of estimating," Romer said.