STIMULUS WATCH

Stimulus boon for South, Southwest

[October 16, 2009]  WASHINGTON (AP) -- Businesses in the South and Southwest benefited most from the first federal contracts awarded under President Barack Obama's stimulus program, according to initial data released by a government oversight board. Military construction and environmental cleanup contributed to a boost of about 30,000 jobs.

The new job numbers -- in line with expectations for such an early accounting -- offer the first hard data on effects of the $787 billion stimulus program.

The figures, released Thursday, are based on jobs linked to less than $16 billion in federal contracts and represent just a sliver of the total stimulus package. But they also represent a milestone of sorts for an administration that promised unprecedented real-time data on whether the program was working.

Until now, the White House has relied on economic models to argue that the program created jobs and eased the recession. The numbers help shift the discussion from whether the program is creating jobs to whether it is creating enough to justify its enormous price tag.

"These are the most thankful employees you'll ever want to see," said Robert Del Riego, majority owner of Frederick, Md.-based Re-Engineered Business Solutions, who said he hired 33 new employees, mostly skilled laborers looking for work in the dismal construction market.

He expects to hire six more to help with water and sewer projects in Arkansas and North Carolina and small construction jobs at other sites. His company won $1.9 million in Army Corps of Engineers contracts.

"It's extra work, and with work, hopefully you make a profit," he said. "But the main thing is, it's putting real guys back to work."

The White House said the new numbers were validation that the administration was on track to hit Obama's goal of creating or saving 3.5 million jobs by the end of next year.

"The early indications are quite positive," said White House economic adviser Jared Bernstein, who said the report "exceeds our projections."

The construction industry showed the strongest numbers in Thursday's report, accounting for about a third of the jobs thanks to contracts to repair military bases. Despite those gains, unemployment in the construction industry remains high, at 17.1 percent. That's down from its February high of 21.4 percent.

"It's kind of carrying us, allowing us to retain employees until the economy makes a rebound," said Matt Rathsack, director of operations at the Kentucky engineering firm, TetraTech, which reported saving 71 jobs thanks to an Army Corps of Engineers construction project at the Detroit Arsenal facility in Michigan. "We've already pared back and cut back. The staff is on reduced hours. The feeling is we're coming around the corner. We're optimistic."

Environmental jobs also provided a big boost. CH2M Hill, the contractor in charge of cleaning the nation's most contaminated nuclear site, said nearly 2,200 jobs, from carpenters to engineers to secretaries, had been created in southwest Washington state.

On paper, Colorado posted the largest increase of any state, more than 4,700 jobs, largely thanks to a contract to set up a call center to field questions about a change to digital cable. But the jobs were spread across multiple states, underscoring one of the many hiccups in the data. Like most contracting jobs, these were temporary, and most are already over.

California, Florida, Tennessee and Texas also showed strong gains.

New England fared poorly, with fewer than 750 jobs reported across the region. Rhode Island, which has the third-highest unemployment rate in the country, reported the weakest job numbers, both overall and per capita. Businesses there reported creating or saving about six jobs.

Broader numbers on local stimulus spending, for everything from repairing public housing and building schools to repaving highways and keeping teachers off the unemployment lines, won't be available until late this month. Those figures are expected to show early stimulus money saving thousands of teaching jobs and creating construction work for highway projects nationwide.

Thursday's numbers represent such a small snapshot, they are unlikely to significantly change the debate over whether the stimulus law was the right prescription for an ailing economy. Until more money is spent and more data come in, it is impossible to accurately calculate how much the government is spending per job.

House Republican leader John Boehner said the numbers don't change the fact that unemployment has climbed higher than the White House ever expected. Since signing the stimulus in February, Obama has watched the economy shed millions of jobs. The White House says things would have been far worse without the stimulus.

"The administration's continuing assertion that the stimulus is working flies in the face of the harsh reality being faced by Americans outside the Beltway every day," Boehner said. "While the administration spins its illusion, Americans are asking, 'Where are the jobs?'"

In the short term, the most significant thing about the job numbers may be that they exist at all. The government has never attempted to track the effects, in real time, of such a huge government program. The data released by the Recovery Accountability and Transparency Board allow taxpayers to see not just where their money is going, but what the government is getting in return and how many people are on the job.

The reporting does not attempt to measure jobs created by $288 billion in tax cuts or the sizable increases in spending on Medicaid and unemployment benefits. The White House has said that, when considering those factors and estimating the ripple effect through the economy, more than 1 million jobs have been created or saved so far.

Auditors, fearing businesses would use part-time jobs to inflate the numbers, required companies to convert all jobs numbers to full-time. That means a 20-hour-a-week roofing job is counted as one-half job.

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On the Net:

Interactive map showing job creation by county: http://bit.ly/4oQLIW

Recovery Accountability and Transparency Board:
http://www.recovery.gov/

[Associated Press; By MATT APUZZO and BRETT J. BLACKLEDGE]

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.