Sandra Fabry

"650,000 Jobs Saved or Created!" - Really?


Posted by Sandra Fabry on Friday, October 30th, 2009, 1:47 PM PERMALINK

This afternoon, the Obama Administration will release their second batch of “stimulus” data.  According to an Administration statement this morning, the roughly $150 billion spent so far will have directly “saved or created” 650,000 jobs.  However, factoring in “indirectly saved/created jobs,” they will be taking credit for roughly one million jobs allegedly saved or created through the trillion dollar spending and debt package.

There are many problems with the White House claims. Let’s start with just the top ones:

  • The economy continues to shed jobs. The Administration’s economists claimed that passage of the package would keep the unemployment rate at about 8 percent.  Since the passage of the “stimulus,” however, more than 2.7 million jobs have been lost, as early October data showed. Any job numbers touted by the Administration will have to be seen against this background.
     
  • “Indirectly” saving/creating jobs. The White House’s “indirect” job creation number is taking their bogus metric of counting “jobs saved/created” to a whole new level. One can indirectly claim credit for anything. Buy a lot of hamburgers? You personally “indirectly saved or created” five jobs at McDonalds.
     
  • “Saved/created” metric will overstate impact. Leaving “indirect” job creation aside, the “saved/created” metric is so utterly flawed (as even President Obama’s chief economist Christina Romer admitted saying:  “It’s very hard to say exactly because you don’t know what the baseline is, right, because you don’t know what the economy would have done without it.” ) So even if they scrubbed the data for three weeks to prevent the massive errors found in the first batch of data, the numbers will be highly inflated because the underlying premise is flawed.

  • Saving/creating government jobs.   The data will show that the bulk of the jobs “saved/created” are government jobs - mostly jobs in the unproductive sector of the economy, furthering no economic growth, and preventing necessary streamlining of an already bloated bureaucracy.  Ultimately, the package is propping up government at the expense of taxpayers.
     
  • Strings attached only aggravate the problem.  State and local governments are beginning to feel the strings attached to the federal “stimulus” dollars.  Several provisions in the “stimulus” package prevent lawmakers from making certain budget cuts or adjustments that would alleviate fiscal strain. In the case of Washington state, the "maintenance of effort" provisions in the Recovery Act prevent the state from adopting eligibility standards for Medicaid that are more restrictive than those in effect on July 1, 2008, and education budget reduction restrictions also apply. Most states failed to quantify the restrictions. The likely result as states work to fix their budget problems: tax increases which will further depress economic growth and kill jobs.
     
  • Taxpayers pay steep price. Even if you were to grant the Administration the 650,000 jobs created – using the roughly $150 billion figure of “stimulus” funds spent, the cost per job “created/saved” would come out to more than $230,000.   Not exactly a bargain.

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40 GOP Senators to Harry Reid: Let the Public Read the Bill Now!


Posted by Sandra Fabry on Friday, October 30th, 2009, 7:54 AM PERMALINK

We weren't the only ones asking Harry Reid yesterday where the healthcare bill was. All 40 GOP Senators sent a letter to Democrat Leader Harry Reid demanding that he finally post the merged healthcare bill online.

From the letter:

On Monday, you announced that you had sent health care legislation to the Congressional Budget office (CBO). As you know, this legislation will have a profound impact on the lives of every American, including the next generation who will be forced to pay for it. Our national debt stands at nearly $12 trillion, with a deficit of $1.4 trillion. The health care bill will likely be more than 1,000 pages long and is the single most important legislation we will consider and debate this year in Congress.

With an issue this large and complex, we need full transparency at every stage in the legislative process. President Obama was elected, in part, on his promise to bring greater transparency to the workings of the federal government. The American people and every member of Congress should be allowed to read the bill that was sent to CBO. The bill should be made available for taxpayers to read and learn how the federal government is spending their money. We are writing to request that you immediately make all materials sent to CBO publicly available on the internet.

Will Harry Reid listen?

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Paging Harry Reid: Where is the Bill?


Posted by Sandra Fabry on Thursday, October 29th, 2009, 5:17 PM PERMALINK

Taxpayers who remember Senate Democrat Leader Harry Reid’s (D-Nev.) statement:

No longer can we allow special interests and lawmakers to conspire behind closed doors. We need transparency.

may find themselves scratching their heads these days. On Monday afternoon, October 26, 2009 Sen. Reid announced that he successfully merged together the healthcare bills produced by the Senate Finance and HELP committees.

Three days later, other members of the Senate and taxpayers have yet to get a glimpse at the bill, which Sen. Reid sent off to the Congressional Budget Office in order to obtain an official cost estimate. Given that the just-released House bill is 1,990 pages long, it can reasonably be assumed that the Senate version Sen. Reid has negotiated behind closed doors will be well over the 1,000 page mark.

Here's what ATR president Grover Norquist has to say about Reid's shell games:

This Congressional leadership and the Administration have been claiming they’re all about transparency and involving Americans in the healthcare reform process. So where is the Senate healthcare bill? It is unconscionable that three days after Harry Reid announces a breakthrough in his secret negotiations nobody has actually had an opportunity to look at the bill, which no doubt will be more than 1,000 pages long. Is that how you involve the American people?

These developments follow on the heels of a less-than-transparent legislative process. President Obama had campaigned on holding healthcare negotiations with C-SPAN cameras in the room, but that never materialized. Meanwhile, the Senate Finance committee rejected an amendment requiring the online posting of the committee bill along with the final CBO score before a committee vote.

Continues Norquist:

Taxpayers are becoming increasingly frustrated with this healthcare ‘reform’ process - for good reasons. Especially in light of all the lofty promises the President and Congressional leaders made, this wheeling and dealing in the dark is an insult to Americans, all of whom will be impacted in some shape or form by this overhaul package. Sen. Reid, it is time to stop the smoke and mirrors and let Americans see what you have cooked up for them rather than forcing them to swallow blindly.

Click here for our press release in PDF.

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ATR and CFA to Pelosi: Give us Time to Read The Healthcare Bill Text and Cost Estimate


Posted by Sandra Fabry on Wednesday, October 28th, 2009, 5:51 PM PERMALINK

The following is cross-posted at www.fiscalaccountability.org:

CFA and ATR sent a letter to Speaker Pelosi  today urging her to post the full text of the House healthcare bill she is planning to unveil tomorrow along with the final cost estimate for at least five full consecutive days (excluding holidays and weekends) online in a searchable form (no image pdf!) before any further action.

From our letter:

Taxpayers, who ultimately pick up the tab for every bill Congress passes, deserve greater accountability than they have recently been provided with. From the way the “stimulus” package was passed to the way healthcare negotiations are currently being led behind closed doors – taxpayers deserve better, especially from a Speaker of the House who once pledged to make Congress under your leadership the “most honest, most open, and most ethical Congress.”
 
On behalf of taxpayers, we urge you to make the full text of the House health bill along with the final CBO score for this version available for public online review at your earliest convenience tomorrow, and for a minimum of five full consecutive days (excluding weekends and holidays) in a searchable form before moving the bill further.
 
While we appreciate the current 72-hour campaign, we feel that time frame should only be a floor. Given the size and scope of this package, and given the impact this piece of legislation would have on all American taxpayers, more time to review both the legislative language and the final cost estimate should be allotted. Congress should take its time to weigh all its decisions carefully, while seeking more input from the public, who should be given the opportunity to partake in political discourse.

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"Stimulus" Jobs Math Still = #Fail


Posted by Sandra Fabry on Tuesday, October 27th, 2009, 1:57 PM PERMALINK

The following is cross-posted at www.fiscalaccountability.org:

Only days before the big data launch - on Friday, the Recovery Board is set to release "stimulus" data from more than 120,000 recipient entitites - the stories calling into question the job-creation figures, and with that the Administration's "jobs saved/created" metric are piling on.

The News-Leader in Springfield, Missouri is reporting that that a diving company received stimulus dollars to work on a project which had a seven-man team of divers from Kentucky spend four days retrieving a broken steel turbine blade from the bottom of Stockton Lake. The report submitted to the Recovery Baord claimed the project“created or saved” 7.5 jobs, but failed to point out that the project duration was four days - and none of the employees working on the project would have lost their job if it hadn't been for the funding. 

Similarly, Kentucky's Courier Journal reports that:

The first detailed reports on federal stimulus spending in Kentucky are riddled with inaccuracies — including projects that aren’t even in the state.

The national data, released Oct. 15, show that stimulus dollars have created or saved nearly 870 jobs in Kentucky and about 330 in Indiana. But across the United States watchdog groups are casting doubt on the data’s overall accuracy.

(...)

The data also indicates that SRS Inc. of Gallatin, Tenn. has saved or created at least 15 jobs on construction and renovation projects at Fort Campbell.

But those projects weren’t funded by stimulus money, said Monte A. Edwards, the company’s executive vice president of marketing and business development.

“They should not be, as they are not stimulus funded,” Edwards said in an e-mail.

But the problems do not end with the data so far submitted.  As the Financial Times reports, colleges are currently scratching their heads about guidance they are being given on how to count "stimulus"-funded jobs as their numbers are due to be reported by Friday of this week:

In a bid to be transparent yet not over-complicate things, the White House Office of Management and Budget asked recipients to calculate one single number for “jobs created and retained”. To avoid overstating the effects of the money, it offered a simple formula to use: add up the number of hours of work the stimulus money paid for and divide by the number of hours in a typical full-time job. The problem, though, is that this formula gives no guidance on how to distinguish or strip out jobs that would have continued to exist anyway.

As a result, many universities including UCLA decided simply to count up everyone who is paid through a stimulus grant, in accordance with the formula. Others have excluded tenured academics from their data, after taking legal advice, amid what they say was a lack of clarity from the government on how to deal with the issue.

And you may recall the story from the Indy Star, which reported that state officials sent in a report to the federal government stating they had supported 16,000 jobs with "stimulus" funds.

The 16,000 jobs  number the state has reported to the federal government is based on the $2.3 billion expected to pass through Indiana's government.  But 13,232 of these jobs were tied to $610 million in so-called "fiscal stabilization funds" sent to Indiana to help support its state budget. Daniels chose to use that money as a substitute for a regular appropriation to K-12 schools, freeing up existing state funds to maintain Indiana's budget surplus.

Consequently, and in line with the federal guidance, officials included those 13,000-plus teaching and school staff jobs supported by federal "stimulus" dollars were included in the state's report. So more than 13,000 jobs of the 16,000 the state reported to the federal government under the "saved/created" category already existed.

This all could really be just the tip of the proverbial iceberg. Let's see what the data launch brings on Friday.

Photo credit: mad LOLscientist

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Judging by the Spending "There is No Recession in Washington"


Posted by Sandra Fabry on Monday, October 26th, 2009, 9:26 AM PERMALINK

The following is cross-posted at www.fiscalaccountability.org:

If you thought that after the bailouts and the "stimulus" package, lawmakers on the Hill would excercise moderation when it comes to your tax dollars, think again. 

As the Wall Street Journal points out today:

(...) House Democrats were moving on a dozen spending bills for fiscal 2010 that total 12.1% in more domestic discretionary increases.

Yes, 12.1%.

Remember, inflation is running close to zero, or 0.8%. The good news, if we can call it that, is that Senate Democrats only want to increase nondefense appropriations by 8% for 2010. Because these funding increases become part of the permanent baseline for future appropriations, the 2010 House budget bills would permanently raise annual outlays for discretionary programs by about $75 billion a year from now until, well, forever.

Concerned yet?  Well, that's not all. These numbers exclude the so-called mandatory spending programs like Medicare and Medicaid, both of which saw an explosion of 9.8% and 24.7%, respectively, in FY 2009.  Also, agencies were allowed to double-dip, and saw massive increases in their budgets courtesy of the stimulus and the appropriations bills. Consider this:

House Republicans on the Budget Committee added up the 2009 appropriations, the stimulus funding and 2010 budgets and found that federal agencies will, on average, receive a 57% increase in appropriated funds from 2008-2010. By contrast, real family incomes fell by 3.6% last year. There's no recession in Washington.

The conclusion in light of the spending plans Obama, Pelosi and Reid have for taxpayers is sobering:

Democrats must figure that they can get away with this sort of rap because no one will call them on the reality of what they're spending. And they're probably right about a press corps that has ignored the spending boom since Democrats took over Congress in 2006. Meanwhile, the spending machine rolls on, all but guaranteeing monumental future tax increases.

Yes, monumental future tax increases. If you can stomach it, ATR is outlining the first wave in the Senate healthcare bills here.

Photo credit: Mike Desisto

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Mission Accomplished? Then Can We Get the Rest Back?


Posted by Sandra Fabry on Friday, October 23rd, 2009, 10:36 AM PERMALINK

Yesterday, I posted the following on www.fiscalaccountability.org regarding Obama administration Chief Economist Christina Romer's statement that the "stimulus" had essentially already done its job and will level off next year:

Mission accomplished. Well, that may not be exactly how she phrased it, but in a nutshell, that's what she's saying about the "stimulus," You know, the passage of which was going to prevent the unemployment rate from going up above 8 percent but hasn't. 

Christina Romer, the chair of President Obama's Council of Economic Advisers, told a Congressional panel today that

spending from the $787 billion economic stimulus has already had its biggest impact on economic growth and will likely not contribute to significant expansion next year.

But, that doesn't matter. Here's why. You may not have realized it with unemployment peaking at 9.8%, but, according to Romer, the package has really been working, and has so far "saved or created" 600,000 to 1.5 million jobs. 

Which brings us back to our favorite pet peeve - the fuzzy math of the "saved/created" boondoggle. Sure you can get to these numbers if you do what apparently state agencies are being instructed to do in their reports to the recovery board.

Disregard the distinction between „created‟ and „retained.‟ Simply count all employees paid for with Recovery Act funds.

Since we'll never know what would have happened absent the "stimulus," there is no way to verify or falsify this claim.

But what we do know is that, according to Bureau of Labor Statistics, since the passage of the "stimulus" over 2.6 million people have lost their jobs, and non-farm employment is down in 43 of the 50 states. 

Never mind.  Mission accomplished, the Administration says.  How so? Because they say so.

Russ Roberts raised an important point in his post on Cafe Hayek that I would be remiss not to post:

So if the biggest impact has already happened and the effect is going to level off, can we have the other $593 billion back, please?

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Dear Sen. Reid: It's Time for Leadership To Put Its Money Where Its Mouth Is On Transparency


Posted by Sandra Fabry on Thursday, October 22nd, 2009, 4:26 PM PERMALINK

ATR and CFA today called on Senate Democratic Leader Harry Reid (D-Nev.) to allow taxpayers to scrutinize the merged Health, Education, Labor & Pensions committee bill and Finance committee bill by posting it online as soon as it becomes available and to commit to having the bill and the final score for the final merged bill online for five consecutive days before any further action on the bill.

From the letter:

Taxpayers, who ultimately pick up the tab for every bill Congress passes, deserve greater accountability than they have recently been provided with. From the way the “stimulus” package was passed to the way healthcare negotiations are currently being led behind closed doors – taxpayers deserve better, especially from a Senate Leader who once pledged: “No longer can we allow special interests and lawmakers to conspire behind closed doors. We need transparency.”

The attempt to pass the ten-year “doc fix” bill without spending cut offset was yet another attempt to obfuscate the real cost of the healthcare overhaul you and your colleagues are seeking. But the time for shenanigans is over.

On behalf of taxpayers, we urge you to make the full text of the merged health bill along with the final CBO score for this merged version available for public review at your earliest convenience, and for a minimum of five full consecutive days (excluding weekends and holidays) in a searchable form before moving the bill further.

Given the impact federal legislation has on all American taxpayers, a preliminary score of the health bill would simply not be good enough. Congress should take its time to weigh all its decisions carefully, while seeking more input from the public, who should be given the opportunity to partake in political discourse.

Says ATR president Grover Norquist:

It is time that Congressional leadership finally puts its money where its mouth is. Sen. Reid would be well advised to listen to the American people who are becoming increasingly disaffected by the way they’re being kept in the dark about the real cost of this overhaul. Really, given the scope of this package, asking for a month to scrutinize the bill and all its consequences would not be asking too much. Certainly, Congress should be able to spare a week or two for something of this magnitude. Taxpayers deserve no less.

Click here for the PDF version of the press release.

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Opaque Tactics for Transparent Money Grab in WA


Posted by Sandra Fabry on Monday, October 19th, 2009, 4:26 PM PERMALINK

The following is cross-posted at www.fiscalaccountability.org:

You've prepared them many times, and they always seem to look the same.  But this story from Washington State underscores why you should carefully read through any form you get from the government line by line, and not just leave unchecked the boxes you used to leave unchecked in the past - or else you might be paying for it.

As our friends from the Evergreen Freedom Foundation report, the fact that the state's collection of state park "donations" has gone up drastically this year is not because Washingtonians suddenly discovered their love for the outdoors, but is the result of a sneaky legislative change to the form drivers send in to pay their license fees.  Write's EFF's Amber Gunn:

The legislature changed the law earlier this year to make the $5 donation "opt out," rather than "opt in." In other words, when Washington drivers go to pay their tabs, the bill will show an extra $5 unless the driver checks a box NOT to donate.

I personally know two individuals who unwittingly paid the fee, thinking it was part of their overall bill. Apparently thousands of Washingtonians are experiencing the same oversight.

The proof? Under Washington's old "opt in" system, only about 1.41% of drivers participated. That amounts to a 12-month collection total of just over $635,000--less than half of what the state collected in a month under the new "opt out" law.

(...)

The vast majority of these new "donations" are simply an oversight by drivers. And that's exactly what legislators counted on. When the law changed the donation from opt in to opt out, legislators expected it to raise about $27 million for the biennium, and they are right on schedule.

That's what I call a sneak attack. (Granted, you can get a refund, but still, this is ridiculous.  The intention of the money grab is quite transparent, while the practice is the opposite.)

And given the dire fiscal straits states are in, don't think something like this can only happen in liberal Washington State - so be careful when filling out government forms. They may tell you they're transparent in their ways of doing business, but they probably already have plans to spend the money they dupe you into forking over.

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