Says only seven percent of 2009’s stimulus bill went toward transportation projects, yet they created over one-third of the bill’s total jobs.
Peter DeFazio on Wednesday, February 22nd, 2012 in an online blog
Did transportation projects create more than one-third of all stimulus jobs?
U.S. Rep. Peter DeFazio didn’t care for President Barack Obama’s stimulus package in 2009 -- he said it contained too many tax cuts -- but Oregon’s 4th District congressman likes what it did for transportation. Or rather, what transportation did for the stimulus.
In a guest column posted on The Hill’s Congress Blog, DeFazio wrote that if more stimulus money had gone to transportation, more Americans would have jobs: "Even 2009’s stimulus legislation was proof that transportation investment, no matter how minimal, creates jobs. Only seven percent of that bill was dedicated toward transportation projects, yet it created over one-third of the bill’s total jobs."
A relatively small investment yields more than a third of jobs? That’s a compelling argument, and we wanted to know if DeFazio was right. We had two facts to verify: Did transportation take up a mere 7 percent of the stimulus package and, more importantly, did it provide one-third of the jobs created by that package?
Congress approved the American Recovery and Reinvestment Act of 2009 in February of that year. It distributed $787 billion through a mix of tax cuts and benefits; money for federal contracts; and money to states. Last year, the $787 billion estimate was increased to $840 billion.
The stimulus is so ripe for fact checks that PolitiFact has nine pages devoted to stimulus-related statements. Here’s a great one from House Speaker John Boehner from July 2009: "In Wisconsin, the stimulus paid for a bridge to a bar called Rusty's Backwater Saloon. They've got great burgers, but no new jobs." (That earned a Mostly False.)
The U.S. Department of Transportation received $48 billion of the money, or roughly 6 percent. That’s lower than the 7 percent DeFazio cited so we find it close enough to be accurate.
Jobs created or sustained is trickier. PolitiFact has ruled in the past that it’s not accurate to say that no jobs were created by the stimulus, but that it’s not entirely fair for politicians to count as fact the high end of job estimates put out by the nonpartisan Congressional Budget Office.
PolitiFact Oregon checked five sources to see if any backed up DeFazio’s claim that transportation projects resulted in more than one-third of the jobs:
Recovery.gov: The recovery act’s website tracks stimulus spending and breaks it down by agency and subject. Every quarter it reports on self-reported jobs funded by the stimulus for that time period, but it doesn’t track the total number of jobs created. What we can do is pick a snapshot in time to see how many of jobs came from Transportation.
In the fourth quarter of 2011, for example, Transportation accounted for 26,000 of 204,000 full-time-equivalent jobs funded. That’s 13 percent, not anywhere close to one-third. In fact, we checked every quarter and found transportation agency projects accounted for anywhere from 5 percent of jobs reported for that period, to a high of 13 percent. This does not back up DeFazio’s claim.
Congressional Budget Office: The nonpartisan office issues a quarterly report on the broader effects of the stimulus on employment and economic output, but it doesn’t filter by agency. Its latest report issued last month shows the stimulus in the last quarter of 2011 increased the number of people employed by between 300,000 and 2.0 million. This, too, does not validate DeFazio’s claim.
U.S. Department of Transportation: You’d think that the agency itself would have jobs figures related to stimulus spending and how it compares. It does not.
U.S. Government Accountability Office: The office audits numbers as reported to the Recovery Act. A June 201 report on transportation infrastructure finds transportation projects supported between 31,460 and 65,110 full-time-equivalent positions each quarter from October 2009 through March 2011. But again, that’s not a cumulative figure. It’s just a snapshot of each quarter, as we did above.
The White House Council of Economic Advisers: Also every quarter, the council issues a report on the effect of the stimulus. It’s most recent report "estimates that as of the second quarter of 2011, the ARRA has raised employment relative to what it otherwise would have been by between 2.2 and 4.2 million." Still, there’s no breakdown by agency so no evidence for DeFazio’s jobs claim.
Just how does DeFazio back up his claim? Two ways.
First, his office points to various reports by the Congressional Budget Office and the Council of Economic Advisers that the stimulus has created about 3 million jobs. (Readers should take those figures with caveats, but there are private studies to back up the magnitude of 3 million, as included in the latest CEA report.)
Second, his office provided a link to a report prepared by House Democratic Transportation staff in which they used a multiplier to conclude that $64 billion of transportation and infrastructure investment "will create or sustain more than 1.8 million jobs." How did they get that figure? By using a 2007 Federal Highway Administration formula that links every $1 billion in federal spending to 34,779 jobs, direct and indirect.
We’re not even going to get into the fact that DeFazio lumped together transportation and infrastructure spending. He’s pulled a multiplier projection and attached that to a high-end jobs estimate to conclude that transportation and infrastructure jobs account for one-third of all stimulus jobs. Using this methodology, you could just as easily claim that the projects accounted for two-thirds of all jobs.
We find no other authority to back up the claim that transportation stimulus spending "created over one-third of the bill’s total jobs." Not the U.S. Department of Transportation, Congressional Budget Office, White House Council of Economic Advisers, Government Accountability Office or the people who tally the job reports for the American Recovery and Reinvestment Act. We won’t even get into the argument of jobs created or sustained.
Asked to respond to our findings, DeFazio provided a statement saying that unemployment would have been lower had more of the stimulus focused on transportation and infrastructure projects.
"My point is pretty clear in the op-ed. Transportation investments have a proven high rate of return when it comes to job creation. The stimulus highlighted the difference between transportation infrastructure investments and consumptive tax cuts."
We will grant the statement contains a smidgen of truth -- he has a report that projects 1.8 million jobs created or sustained, using a multiplier -- but it ignores critical facts that show otherwise. We rate the statement Mostly False.