By Michael Grabell, Jennifer LaFleur, Amanda Michel and Christopher Flavelle, ProPublica.
When the nearly $800 billion economic stimulus package passed in February, President Obama pledged that American taxpayers would be able to track every dime. Today, the government released its first comprehensive look
-- a trove of data on 121,000 stimulus reports worth about $159 billion. Democrats and Republicans are already using the new data to support claims that the stimulus triumphed or flopped. But how much can you reliably conclude from the data? Here is ProPublica’s guide to what’s new, what’s missing and what to watch for:
Of all the stimulus data released today, the most-watched figure is likely to be 640,329 – the number of jobs reported to be created or saved. Counting jobs might sound easy, but it’s a lot more complicated than it seems. And there are a number of important caveats to keep in mind.
First, the number is not an actual headcount but a calculation of full-time equivalents. The White House instructed recipients to measure the number of hours worked on stimulus projects and divide it by the number of hours in a full-time schedule for the quarter. So a construction worker on a one-month paving project would count only as a third of a job. The upshot: More people could have been employed, but the data doesn’t tell you if their job lasted two days or will last two years.
The $159 billion detailed in today’s release represents less than half of total money made available to date. It doesn’t include more than $100 billion in tax cuts, increased unemployment checks, Medicaid assistance to states or food stamps. While that doesn’t create many direct jobs, it has a multiplier effect. As people spend more money at the grocery store, it could create demand for more cashiers.
The new data also doesn’t count “indirect” jobs created by, for example, plants that supplied the asphalt and steel for a construction project, or “induced” jobs, such as the cook at the roadside diner where the construction workers buy lunch.
When you add in those effects, the White House says the 640,000 number supports its economic estimate that the stimulus has created or saved more than 1 million jobs.
“Since that 650,000 [sic] is based off of about half the bucks at work in the economy so far, you can double it to get a rough estimate of the total jobs impact so far, getting you to over a million jobs, saved or created,” Jared Bernstein, chief economist for Vice President Joe Biden, wrote on the White House blog.
On the other side, Republicans say that the administration is overcounting — and missing the larger point that 3.4 million jobs have been lost since January, according to payroll numbers.
“The trillion-dollar ‘stimulus’ isn’t working, and no amount of phony statistics can change that,” House Majority Leader John Boehner, R-Ohio, said in a statement.
The 640,000 number is not something the White House came up with. It’s a sum drawn from 121,000 reports filed by governors, mayors, businesses and nonprofit groups. So the accuracy of the number assumes that these recipients of stimulus money counted correctly.
There were several accuracy problems with the first batch of stimulus data released on Recovery.gov earlier this month. The Associated Press reported that the top job-creator overstated the number of jobs by thousands. While the company, Teletech Government Solutions, had in fact hired 4,231 people, most of them worked less than five weeks, and the number reported should have been 635.
Analyst John S. Irons of the Economic Policy Institute, which focuses on issues affecting workers and the poor, found that some first-round stimulus recipients might have undercounted by failing to include layoffs that were averted or by reporting zero jobs despite receiving large grants.
“We know this is not 100 percent accurate,” Biden said in a news conference today. “Further updates and corrections are going to be needed.”
One of the most important questions journalists and researchers will try to answer with the new data is whether the stimulus money is going to the areas where it’s most needed.
We examined an early set of stimulus data in August, amounting to $55 billion that could be traced to a county level. Stimulus spending was literally all over the map, the analysis showed. Some economically battered counties had received large amounts, while others just as hard hit by the recession were left out in the cold.
Much of the money thus far has moved through existing grant formulas that don’t take into account regional unemployment rates. For example, education funding is allotted by the number of school-age children; road and bridge funding is parceled out based on such factors as highway miles in a state.
Moreover, it’s hard to pinpoint who benefits. Money spent on a project doesn’t necessarily stay in the community. Construction workers often drive through several counties or ZIP codes to job sites.
The new data contains information on state, city, ZIP code and congressional district. But it doesn’t contain the geography most researchers use to study trends — counties. It also doesn’t include standard codes that make it easy for journalists and researchers to match to demographic factors like unemployment or poverty.
Recovery.gov is far ahead of previous government transparency efforts with data about who got the contract and subcontract, what they did with the money, the project’s progress and how many jobs they created.
The first thing you see on Recovery.gov is an interactive map searchable by ZIP code. For example, our office in lower Manhattan (ZIP code 10006) is surrounded by dots — a housing group received $2 million in lending capital, another company got $2 million to finance nonprofit health centers, a law firm got $600,000 to evaluate loan applications for vehicles fueled by new technology.
The new site includes more than 500 new charts. But that doesn’t mean everything is accurate. On Oct. 15, for the first batch of data, Recovery.gov listed Sanofi Pasteur, a French vaccine manufacturer, with the largest stimulus contract, worth $1.4 billion. According to the Centers for Disease Control and Prevention, the amount should have been $10.4 million.
(It has since been corrected.) Recovery.gov also said Colorado led the states in the number of jobs. But a closer look at the data shows the company reporting most of those jobs, Teletech, said they were at 12 locations across the country.
In his news conference, Biden said the reports would come from “basically anyone who has received a federal dollar to initiate a specific project.” But that isn’t entirely the case. The reporting stops at the “sub-recipient” level. That means if a state gave a grant to a city, the public won’t necessarily know who the city contracted for the project.
A good example of this is weatherization funds. The grants went to state energy agencies, which doled money out to community groups, which then hired small contractors to go to homes, install insulation and replace windows. According to White House guidance, the reporting stops at the community group.
Minority contractors and urban advocacy groups have pressed the administration to ensure that African-Americans, Hispanics and other minority groups share in the stimulus money.
Unemployment for blacks (15.4 percent in September) and Hispanics (12.7 percent) has been much higher than the rate for whites (9 percent). On some Native American reservations, the jobless rate surpassed 75 percent last winter.
But the data don’t reveal much on this score. Although stimulus recipients had to report more than 40 items to the government, race wasn’t one of them. Minority status can be found in the government’s procurement database, but that covers only federal contractors.
A ProPublica analysis of the federal procurement data showed that minority-owned businesses have won 15 percent of the $16 billion in federal contracts. Most of that money has gone to companies owned by Native Americans. Black-owned companies received
2 percent of contracts and Hispanic companies 3 percent.
One of the goals of the stimulus was to provide investments that would lay the groundwork for a stronger economy. But it may be too early to assess the administration’s progress using the new data. The administration hasn’t awarded any grants for high-speed rail, high-speed Internet infrastructure or the Education Department’s Race to the Top Fund to reward innovation. Billions of dollars in projects for the “smart” electricity grid, carbon dioxide capture and solar, wind, geothermal energy weren’t announced until October and aren’t reflected in the new data, which go only to Sept. 30.
Waste, Fraud and Abuse
The new data contain detailed descriptions of how the money was spent and will likely include some funny-sounding projects. Journalists have already uncovered some of them. There will be a lot of toilets as governments make repairs that can start quickly. There will literally be millions for pork. That’s to stock food banks.
We’ve reported on more than $100 million going to airports that have fewer than one flight an hour, including $15 million to Ouzinkie, Alaska – home to 167 people. In his news conference, Biden said there hadn’t been any reports of stimulus money going to things like polar bear tanks. But there is money going to lion and tiger dens.
CNN reported that the Army Corps of Engineers spent stimulus money on costumes for mascots, such as Bobber the Water Safety Dog. Fox News has reported on an arts grant to a San Francisco film society that recently screened “Thundercrack,” called “the world’s only underground kinky art porno horror film, complete with four men, three women and a gorilla.”
But there also could be money going to questionable contractors. In a story co-published with USA Today earlier this week, we found that the Defense Department had awarded nearly $30 million to companies under criminal investigation on suspicion of fraud.
The Association of Certified Fraud Examiners estimates that U.S. organizations lose 7 percent of their revenue to fraud. Using that number, the government’s stimulus watchdog, Earl Devaney, estimated that $55 billion in stimulus could be wasted.
If you want to run a background check on contractors, here are our tips.
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