Says a new report proves the stimulus supported by N.J. Democrats cost $278,000 per job.
National Republican Congressional Committee on Tuesday, July 5th, 2011 in a press release
NRCC says stimulus supported by New Jersey Democrats cost $278,000 per job
Republicans in Congress were not functioning independently of one another on their first workday after the Independence Day holiday.
Shortly after noon on July 5, House Speaker John Boehner "tweeted" a July 3 blog posting from the conservative Weekly Standard’s website, labeling it "POTUS’ economists: ‘Stimulus’ Has Cost $278,000 per job."
Around 4 p.m., the National Republican Congressional Committee followed suit with multiple press releases that used the same Weekly Standard blog item to target dozens of Democrats in Congress, including New Jersey’s Rush Holt and Frank Pallone. Its headline: "New Report Shows Dems’ Failed Stimulus Cost $278,000 Per Job As Economy Got Worse." It went on to claim that Holt’s and Pallone's "government spending spree" "delivered little except skyrocketing debt owed to foreign countries like China."
By 4:55 p.m., the National Republican Senatorial Committee had recycled the Weekly Standard blog posting to attack Ohio Democratic Sen. Sherrod Brown. This time the claim was: "President Obama’s own top economists estimate that the Obama-Brown stimulus debacle cost taxpayers an average $278,000 per job."
Our sister website, PolitiFact Ohio, thought the concerted GOP effort made it worthy of a look. Since Boehner kicked it off on Twitter, they used his tweet.
The Weekly Standard blog item that spawned the statistic cites a July 1 report by the White House Council of Economic Advisers, which states the American Recovery and Reinvestment Act "saved or created between 2.4 and 3.6 million jobs as of the first quarter of 2011." It also tallies the sum of the stimulus bill’s outlays and tax cuts at $666 billion.
The $278,000 per job figure doesn’t appear anywhere in the White House report. To come up with that number, the publication divided the $666 billion stimulus total by the low-end 2.4 million job estimate to come up with a dollars per job statistic that it rounded off to $278,000.
The blog item contends this statistic "provides further evidence that President Obama’s ‘stimulus’ did very little, if anything, to stimulate the economy and a whole lot to stimulate the debt," and insists "the government could simply have cut a $100,000 check to everyone whose employment was allegedly made possible by the ‘stimulus’ and taxpayers would have come out $427 billion ahead."
After Republicans began to circulate the blog item, White House spokeswoman Jay Carney said its conclusions were "based on partial information and simply false analysis." White House spokeswoman Liz Oxhorn issued a statement that noted the Recovery Act bolstered infrastructure, education, and industries "that are critical to America’s long-term success and an investment in the economic future of America’s working families."
The White House points out that Recovery Act dollars didn’t just fund salaries - as the blog item implies - it also funded numerous capital improvements and infrastructure projects.
Lumping all costs together and classifying it as salaries produces an inflated figure.
Furthermore, the publication created its statistic with the report’s low end jobs estimate. Had it instead gone with the 3.6 million job figure at the top end of the range, it would have come up with a smaller $185,000 per job figure.
Republicans made a similar assertion in November 2009, using similar calculations to contend that the stimulus cost taxpayers more than $246,000 per job. Back then, they divided $160 billion in stimulus spending by 650,000 jobs that the White House estimated the measure had created or preserved. A "fact check" conducted at the time by the Associated Press called that math "satisfyingly simple but highly misleading."
"Any cost-per-job figure pays not just for the worker, but for the material, supplies and that workers’ output - a portion of a road paved, patients treated in a health clinic, goods shipped from a factory floor, railroad tracks laid," the 2009 Associated Press item noted.
The Weekly Standard claimed that the stimulus actually "has been working in reverse the last six months, causing the economy to shed jobs." It derives this conclusion from the fact that as of two quarters ago, the stimulus had added or saved just under 2.7 million jobs - or 288,000 more than it has now.
Moody’s chief economist Mark Zandi says the Weekly Standard misinterpreted that data.
"It’s not that ARRA [the stimulus] is now costing the economy jobs, it is that the economy is now creating jobs without ARRA’s help," Zandi told TPMDC. "This is exactly the objective of fiscal stimulus, namely to end recession and jump-start economic recovery."
The day after the White House responded to the GOP’s dissemination of the Weekly Standard blog item, its author penned a defense that reiterates his claims. He says he never said that $278,000 per job went to salaries, but "rather that each job has cost taxpayers $278,000."
Yet, his original item did say taxpayers would have come out $427 billion ahead if the government had simply "cut a $100,000 check to everyone whose employment was allegedly made possible by the ‘stimulus?’"
So where does that leave Boehner’s tweet -- and the identical claim from the NRCC -- that a report said the stimulus had cost $278,000 per job?
- The figure attributed to the president’s economists does not appear anywhere in the White House report.
- Rather, the Weekly Standard attributed the number to economists at the White House after it made its own calculations and conclusions.
- The methodology used to get that number was previously termed suspect because it lumps all costs associated with stimulus projects together as if they are wages, suggesting it would have been cheaper to just "cut a $100,000 check" to each person who found work as a result of the stimulus.
On the Truth-O-Meter, we rate the tweet (and the subsequent variations of the claim) as False.
To comment on this ruling, go to NJ.com.
Editor's note: This item was originally published on the Boehner statement. We have specifically republished it on the National Republican Congressional Committee statement.