The Recovery Act Blog

  • Jobs Before Money? Money Before Jobs? Both Are Possible

    Posted by G. Edward DeSeve on November 19, 2009 at 12:24 AM EDT

    We all know that creating jobs is more important than counting jobs. But when misinterpreting the count casts doubt on their creation, it is worth talking about the count. Two aspects in particular worth discussing are how recipients create jobs before receiving money, and why some awards don’t yet show jobs.

    Some critics have raised questions about jobs being reported as created or saved without any money been spent by the recipient.   They ask, “How could this happen?” 

    In many cases we would expect to see job creation before a recipient receives or spends money. For example, sometimes states are not able to pay State Fiscal Stabilization funds to school districts right away. However, knowledge that these funds are on the way have allowed many school districts to retain teachers that they would otherwise cut. When districts know they can count on the money, they can keep teachers on the job. And this isn’t just a hypothetical example. It’s a real, tangible example of what you would see in Connecticut. You can check it out online here.

    There are countless other examples, not only in education. Sometimes you see this in transportation programs, where the government only pays out money only after a reimbursement request is submitted. So, a contractor could have hired hundreds of people, and built an entire stretch of road before receiving a dime. If you believed what the critics say, you may think there’s no way these jobs could exist—that someone cooked the books, or entered wrong data. But you’d be wrong. You see this accelerated job creation in our science spending as well – for example, in South Carolina where a $591,000 grant to a research foundation allowed that foundation to keep two people hired as a result. How much money had the foundation received? None, but they know it’s coming, so they planned ahead.

    Some critics point to the opposite sort of report: many awards that show money being spent, but no jobs being created. Let’s see why this is not a cause for concern. 

    Many recipients got their money at the very end of the reporting period, and simply hadn’t yet hired anyone before the period ended. Several awards (literally billions of dollars worth) were awarded just before the close of the reporting period. You can see this yourself if you look at many of the NIH awards on Recovery.gov. Will a large number of these awards create jobs soon? Yes! Take an NIH grant received by a university in Pennsylvania for $2.7 million. This grant was awarded on 9/30/2009—literally the last day before reports had to be prepared.   So it’s no surprise that this university got funds, but hasn’t yet hired. The fact that these awards show money received but no jobs created isn’t bad news— it’s telling us that the best is yet to come.

    Many recipients are just starting work on their awards, and explicitly say so in their reports. Awards of billions of dollars show the same.   When filing reports, recipients were able to comment on how complete their project is: zero percent, less than fifty percent, more than fifty percent, or complete. A zero job award may not mean the same thing if it is also not yet started—and there are many of these. One simply has to look. Take this example: a police department in North Carolina received almost $500,000 but had reported no jobs. Their project status shows less than 50% complete. A simple reading of the description would paint a fuller picture: “Although no jobs have yet been created, 4 Crime Analysts will be hired in October. We had started the hiring process at the end of September.” 

    And don’t forget: many recipients are creating jobs, but they’re just not the types of jobs that get reported on. Nevertheless, they can be seen across the reports: reports on science equipment ordered, on construction material bought, on cars bought. These things create jobs... just not reported on jobs. Some non reported jobs are even more obvious: one recipient in Georgia states “Although they are not included in our direct hire FTE calculations... more than 1,000 staff augmentation subcontract workers have been added to our site ARRA workforce.” Again, non-reported on jobs can be spotted across reports from every corner of the country.

    Sure, at the end of the day people may wish every report was audited. But of course, that can’t be done—funds were not provided to hire auditors, not to mention that that would have been a waste of needed funds. Instead, the reports are online for everyone to see. All people have to do is look.

    G. Edward DeSeve is Special Advisor to the President, Assistant to the Vice President and Special Advisor to the OMB Director for Implementation of the Recovery Act

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  • Looking at the Big Picture on the Recovery Act

    Posted by G. Edward DeSeve on November 17, 2009 at 10:37 AM EDT

    Last month, in a first-ever effort by the federal government recipients that received Recovery Act funds had to file a report saying how much they had received, what they had done with it, and how many jobs these funds had saved or created.  The reports were due just 10 days after the end of the federal fiscal year on September 30th, and were posted on Recovery.gov just 20 days later.

    More than 130,000 such reports were filed.  You can go to Recovery.gov and look them up by zip code, or search for them on a map.  It’s a “real-time” update on your tax dollars at work that is unmatched by any federal initiative, ever, of this scale.

    As part of President Obama’s commitment to transparency and disclosure, it’s been a huge success.  When you consider the sheer number of reports that had to be filed, processed, and posted; the fact that this had never been done before; and the very short time to check reports and make sure they were right – the data collected and posted is very impressive.

    Unfortunately, it would be hard to know that by reading some of what’s been written and said about recipient reporting.  The Administration has been criticized for pointing out to the independent Recovery Board some erroneous reports that should not have been posted – and for failing to find all the erroneous reports.  Skeptics have raised doubts about reports that show jobs created with no funds spent (although that is possible, as workers are hired in anticipation of projects starting), or funds spent with no jobs created (when materials are purchased for projects that are not yet underway).

    Some filers, working with the new system, punched in the wrong Congressional district, and some just got the data wrong.  And about 10% of those folks who were supposed to file a report haven’t filed it yet.

    We fully agree with those who find the mistakes in the data frustrating – and we’ve been working with the Recovery Board to find the mistakes, and fix them.   Just because mistakes are inevitable in any new system – especially one this large, and this new -- doesn’t mean they are acceptable.  We are going through the reports with a fine tooth comb, identifying mistakes, and working with filers to correct them.  That said, three big picture points should not be lost.

    First, the mistakes are RELATIVELY few, and don’t change the fundamental conclusions one can draw from the data.   Even if as many as 5-10% of the reports or 5-10% of the totals are wrong (and we don’t think it is that high), that still means the Recovery Act saved or created between 600,000 and 700,000 direct jobs in its first seven months – more than most experts predicted when it passed.  And most leading experts agree that – whatever the recipient reported total should be – the actual number of jobs saved or created is about double that, because the recipient reports don’t include direct payments to individuals, the jobs created by Recovery Act tax cuts, and the jobs created when workers on Recovery Act projects spend their paychecks. 

    Second, some of the mistakes are frustrating typos and coding errors that don’t undermine information at the heart of the data.   Yes, it is “silly” that Recovery.gov shows that a project went to the 15th Congressional District in Arizona – when there is no such district.  But a “click” on the project details gives you the address, and a check on the address shows it is in Arizona’s 3rd district.  All this shows is that when people send in 130,000 reports, some will have silly mistakes.  But it doesn’t really undermine the ability of the public to track and follow the data – or the fact that real jobs have been created.

    Third, transparency is going to be messy – but it is better than the alternative.   It would be great if every report filed was correct the first time, on time, and contained no errors.  But that’s not realistic when 130,000 reports are being filed in a 10 day period.  It would be great if the reviewers at the federal agencies, could have found all the mistakes in the 20 days they had to do the job, gotten the reports back to the recipients to be fixed, and reposted  – but again, that isn’t realistic.  And so, it’s all out there now for the public to see – because the Recovery Act chose speed and transparency as its watchwords – and the result is some data errors for the critics to pick over.  But think about it this way:  What government program has ever even attempted to provide this sort of information, on this scale, this quickly?  In my over thirty years of government service, I can tell you without hesitation:  something like this has never happened before.  In previous administrations, hundreds of billions of dollars have been spent without anyone being asked what happened to the money, being asked how it was spent, or being asked how many jobs were created – and some of the loudest critics of Recovery Act data today were shockingly silent.  And if these questions were asked, answers would usually take months or years to produce.

    Last month, something happened that has never happened before.  Critics – some well intentioned, some who just wanted to discredit the Recovery Act -- have had over two weeks to try to make hay with  the data.   But no criticism has come close to discrediting the larger and most important point:  that the Recovery Act has helped save or create more than 1 million  jobs across America and across various sectors of the economy.   The data will get better and better – but in the noise over counting jobs, we shouldn’t lose sight of the Recovery Act’s progress in creating them.

    G. Edward DeSeve is Special Advisor to the President, Assistant to the Vice President and Special Advisor to the OMB Director for Implementation of the Recovery Act

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  • 10 Recovery Act Myths

    Posted by G. Edward Deseve on November 3, 2009 at 7:27 PM EDT

    With last Friday’s unprecedented release of information on Recovery.gov, we’ve begun to see lots of interest in the specific types of projects that have been funded by the Recovery Act.  Even more specifically, we’re seeing reports that Recovery Act funds have been spent on questionable or wasteful funds. 

    We are always on the lookout for wasteful or unwise projects under the Recovery Act, and one reason why we wanted all the projects information posted online with unprecedented speed and transparency was so that if something slipped through, the press and public would find it and we could take action.  More than 170 proposed Recovery Act projects have been halted or altered due to our review process.

    That said, some of what’s been written or said about Recovery Act projects is just plain wrong.  Transparency requires calling out bad projects when we find them – but it also equally means responding to false criticisms when those are leveled, too.  Here are 10 myths about Recovery Act projects that have cropped up lately.

    1. Recovery Act funds are being used to renovate a Lancaster County train station that hasn’t been used in 30 years.  Actually, more than 80,000 passengers use the Elizabethtown station every year, a number which has increased approximately 90 percent in just five years.  This station sits along an important transit line in Eastern Pennsylvania between Harrisburg and Philadelphia, and renovations will help the continued growth in business development and improving the quality of life for residents of this rapidly growing area.
       
    2. Recovery Act funds are being used for a snow-making facility in Duluth, Minnesota.  Proposed as a potential project before the Recovery Act was even signed into law, this Duluth project was never approved, and no Recovery Act funds were directed to this proposed project.
       
    3. Recovery Act funds are being used to install a guardrail for a dry lake bed in Oklahoma.   This project was halted months ago as the Army Corps looks into other ways to address safety issues in this area – but assertions that funds are being used for this project continue.
       
    4. Recovery Act funds are being used by the U.S. Forest Service to breed and do research on bugs in Connecticut.  Yes, these funds are being used by the USFS – but to renovate and improve Connecticut research facilities to allow them to better respond to the need for more research into invasive species that are devastating our forests.  These invasive species, such as gypsy moths and wooly adelgids, are causing damage to both our parks and our natural resources, and research into potential methods of control is definitely not a wasteful use of resources.
       
    5. Recovery Act funds are being used to purchase a freezer for fish sperm at the Gavins Point National Fish Hatchery, in South Dakota.  Actually, no Recovery Act funds are being used for this project.
       
    6. Recovery Act funds are being used to weatherize eight pickup trucks in Illinois.  No – once again, there are no Recovery Act funds being used for this purpose.
       
    7. Recovery Act funds are being used to purchase 22 toilets for use in the Mark Twain National Forest.  Actually, the funds are being used to purchase 22 complete, prefabricated restroom buildings for the National Forest – and include site preparation and installation.  At $21,000 per building installed, this is a reasonable cost and provides construction jobs in this area.
       
    8. Recovery Act funds are being used to study how children perceive foreign accents.  Recovery Act funds are being used to support this and other National Institutes of Health (NIH) projects.  In this case, this basic research project will be particularly beneficial to children with hearing problems.
       
    9. Recovery Act funds are being used to build a bridge connecting two Microsoft campuses.  Reports have said that $11 million in Recovery Act funds are being used to connect two Microsoft campuses in Redmond, Washington.  Actually, only about half of that amount is being used for this project, which is a vital transportation project strongly supported by both state and local officials in an area that supports over 44,000 jobs and was the region’s top priority after a rigorous, competitive review.
       
    10. Recovery Act funds are being to provide a tax credit for golf carts. Some reports have highlighted an IRS tax credit for plug-in vehicles as a frivolous use of recovery resources.  In fact, the legislation that provides this tax break was signed into law by the former President, and the Recovery Act terminates this credit at the end of 2009 – rather than at the end of 2014 as the law was originally designed.

    There are many projects supported by Recovery Act funds, and just as many opinions about whether the funds that support them are being used prudently.  We’ve highlighted ten projects here that have been held up as wasteful – and in all cases here, there is another story.  As directed by President Obama and Vice President Biden, we are always on the lookout for examples of waste and fraud, and will deal with it wherever we see it.  In the majority of cases, however, we are, and continue to be, good stewards of America’s Recovery Act funds.

    G. Edward DeSeve is Special Advisor to the President, Assistant to the Vice President and Special Advisor to the OMB Director for Implementation of the Recovery Act

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  • Recovery in Action: Powering up America

    Posted by Nathan Sterken on October 31, 2009 at 2:30 PM EDT

    Earlier in the week, President Obama announced the largest-ever investment in the nation’s electric grid—more than $3.4 billion in grants distributed among 100 grantees.  Though the immense scale of the investment was clear during the President’s announcement, the flood of reports from news outlets across the country has been overwhelming.  A sample of those stories are linked below, detailing new projects in South Dakota, Vermont, California, and several other states:
     
     
    SRP gets $56.9M boost from feds for customer 'smart meters’: Salt River Project will receive a $56.9 million grant from the federal Recovery Act to speed up the installation of "smart meters" for customers, the Energy Department announced Tuesday.
     
     
    SMUD receives $128M in smart-grid funds: The Sacramento Municipal Utility District has been awarded $127.5 million in federal economic stimulus funds that will go toward a $308 million smart-grid infrastructure investment. 
     
     
    7 Florida utilities and tech firm to receive $264 million: Energy grants announced Tuesday by President Obama include $264 million for seven Florida utilities and an Orlando technology company, with each grant requiring final negotiations and matching contributions. 
     
     
    $200 million in stimulus funds flows to Georgia to update power grid: More than $200 million in federal stimulus money is expected to flow into projects in Georgia as part of the Obama Administration's plans to upgrade the nation's aging electric grid. 
     
     
    Five New England states land $226M for smart meters: At least 832,000 smart meters will be installed across New England as a part of smart grid projects receiving funding from the U.S. Department of Energy’s Smart Grid Investment Grant funding. 
     
     
    Federal funds granted for BGE’s smart grid: Baltimore Gas & Electric Co. expects customer costs for its smart grid projects to decrease after winning a $200 million grant from the federal government Tuesday, the company said. 
     
     
    Edison, Whirlpool to get stimulus money: Detroit Edison and the Whirlpool Corporation in Benton Harbor will receive $103 million in federal stimulus money to make investments in green technology. 
     
    Peco Energy gets $200M ‘smart-grid’ grant: Peco Energy Co. was awarded a $200 million federal stimulus grant today that will allow it to speed up deployment of "smart-grid" technology, including 600,000 advanced electric meters in the next three years. 
     
     
    Two S.D. power companies to share $9M in federal funds to install smart meters (video): Black Hills Power and Sioux Valley Southwestern Electric Cooperative will share in more than $9 million in federal funding to help modernize the nation’s electric system. 
     
     
    Powerful energy Vermont plan for ‘smart’ meters getting $69M: A Vermont plan to install electricity smart meters and other technologies to improve energy efficiency and reduce energy costs will receive nearly $70 million in stimulus money.
     
     
    Smart' grid stimulus funds come to Wyoming: Two Wyoming electric utilities will receive more than $7.5 million combined in federal grants to help modernize their infrastructure. 

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  • The Recovery Act and Clean Energy

    Posted by Secretary Hilda Solis on October 28, 2009 at 10:59 AM EDT

    Yesterday I had the privilege of speaking before more than 3,000 people at the Solar Power International 2009 conference. This crowd was energized and excited by the possibility of a clean energy economy!

    I told them we have a choice to make: we can remain one of the world's leading importers of foreign oil, or we can make the investments needed to become the world's leading exporter of renewable energy.

    The President knows what the right choice is. That’s why he is making investments in energy efficiency and clean energy –to lead to a more prosperous economy in the future.

    Through the Recovery Act, President Obama is investing more than $80 billion in clean energy. This money is putting tens of thousands of Americans to work in developing new battery technologies for hybrid vehicles, making our homes and businesses more energy efficient, doubling our capacity to generate renewable electricity, and building a smart, strong, and secure electricity delivery system.

    The excitement about the possibilities being made through the Recovery Act was palpable. I even spoke to the leaders of several companies who are eager to hire workers trained with Recovery Act funds and to grow our economy.

    Earlier yesterday, the President also announced 100 grants totaling $3.4 billion to private companies, utilities, cities and other partners to help build a nationwide smart energy grid. These grants are expected to create tens of thousands of new jobs, and also help us make a leap forward in building a clean energy infrastructure that brings clean, reliable, low-cost energy sources to American homes and businesses.

    At the Department of Labor we are doing our part as well. In June, we announced grant competitions for $500 million in green jobs workforce training and received nearly triple the normal amount of applications.  

    I am working with Secretary Donovan to bring clean energy training to residents of public housing. The goal is to help residents take advantage of the promise of green jobs all while greening their homes and reducing their carbon footprint.

    I am also partnering with Secretary Chu to award up to $27 million, including $10 million in Recovery Act funds, for the Solar Installer Instructor Training Network which will help train over 1,400 instructors and 168,000 solar workers.

    Our goal must be a clean energy future that works for all Americans, so that we can pass on to our children and grandchildren not just a more sustainable economy, but a cleaner planet.

    I have carried this message to miners in West Virginia, solar panel manufacturers in Tennessee, auto workers in Michigan, veterans in San Antonio, and youth in East Los Angeles. The message is clear –they want to seize the opportunity of a clean energy economy.  

    America will lead the clean energy economy of tomorrow because of the work, spirit and ingenuity of those I saw and the countless others committed to a clean energy future and the good jobs it will create for everyone.

    Solar Power International Conference

    The Solar Power International 2009 Conference October 28, 2009.

     

    Hilda Solis is Secretary of Labor

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  • The Smart Grid: Creating Jobs, Saving Energy and Cutting Electric Bills

    Posted by Jesse Lee on October 27, 2009 at 3:34 PM EDT

    Read the Transcript  |  Download Video: mp4 (326MB) | mp3 (15MB)

    Standing amongst thousands of black-and-white solar panels, President Obama today discussed an exciting new chapter in the quest for clean and renewable energy: a $3.4 billion investment of Recovery Act funds to modernize the electric grid.  Speaking at the Florida Power and Light’s (FPL) DeSoto Next Generation Solar Energy Center, the President outlined how a smarter, more reliable energy system will benefit Americans—not to mention the planet:

    On their own, the opening of this new solar plant or the installation of new smart meters or the investment in grid modernization will not be enough to meet the challenges posed by our dependence on fossil fuels.  But together, we can begin to see what a clean energy future will look like.  We can imagine the day when you'll be able to charge the battery on your plug-in hybrid car at night, because your smart meter reminded you that nighttime electricity is cheapest.  In the daytime, when the sun is at its strongest, solar panels like these and electricity stored in car batteries will be able to power the grid with affordable, emission-free energy.  The stronger, more efficient grid would be able to transport power generated at dams and wind turbines from the smallest towns to the biggest cities.  And above all, we can see all this work that would be created for millions of Americans who need it and who want it, here in Florida and all across the country.

    So we're on the cusp of this new energy future.  In fact, a lot of it is already taking place.  Even as I'm here today, Vice President Biden is in Delaware announcing the reopening of a once-shuttered GM factory that will soon put people back to work building plug-in, electric hybrid vehicles.  On Friday, I was in Boston -- that's good news.  (Applause.)  On Friday, I was in Boston, where workers will soon be breaking ground on a new Wind Technology Testing Center that will allow researchers in the United States to test the world's newest and largest wind turbine blades for the very first time.  And there are recovery projects like this in cities and counties all across the country.

    So at this moment, there is something big happening in America when it comes to creating a clean energy economy.  But getting there will take a few more days like this one and more projects like this one.  And I have often said that the creation of such an economy is going to require nothing less than the sustained effort of an entire nation -- an all-hands-on-deck approach similar to the mobilization that preceded World War II or the Apollo Project.  And I also believe that such a comprehensive piece of legislation that is taking place right now in Congress is going to be critical.  That's going to finally make clean energy the profitable kind of energy in America -- legislation that will make the best use of resources we have in abundance, through clean coal technology, safe nuclear power, sustainably grown biofuels, and energy we harness from the wind, waves, and sun. 

    President Obama Shakes Hands at the Smart Grid

    (President Barack Obama reaches to shake hands with people in the crowd following a tour and remarks at the DeSoto Next Generation Solar Energy Center in Arcadia, Fla., Oct. 27, 2009. Official White House Photo by Pete Souza) October 27, 2009. (Official White House Photo by Pete Souza)

    In short, Smart Grid technology will:

    • Create tens of thousands of jobs.
    • Reduce power outages that cost American consumers $150 billion a year--every man, woman and child in the United States will save about $500 each year. 
    • Allow consumers to cut their electricity bills through “smart meters.”
    • Put Americans on the path to generating 20 percent or more of our energy from renewable sources by 2020.

    To read more about the smart grid, the newest American Reinvestment and Recovery Act initiative, read the full fact sheet.

     

     

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