White House: 1.5M jobs saved

WASHINGTON — The Obama administration, offering evidence that its much-maligned efforts to spur economic recovery have begun to take hold, estimated Tuesday that the $787 billion stimulus program saved or created 1.5 million to 2 million jobs during 2009.

These latest calculations by the White House Council of Economic Advisers are certain to be challenged by Republicans, but the employment and economic impact of the stimulus cited in the new report are generally in line with estimates by some leading private economists as well as the nonpartisan Congressional Budget Office (CBO).

"This is truly a stunning effect," Christina Romer, chairman of the president's Council of Economic Advisers, said in a conference call with reporters.

She expressed confidence that the package of tax cuts and government spending — the largest of its kind in U.S. history — would ultimately fulfill Obama's promise to boost employment by 3.5 million jobs by the end of 2010. As of the end of last year, only one-third of the $787 billion package had been spent, although about one-half of the total has been used or committed.

The report, mandated by Congress as part of the stimulus act and released late Tuesday, came as President Obama mounted a full-court press to defend his record on jobs, a major vulnerability for the White House and Democrats in Congress as they head into November's midterm elections with double-digit unemployment predicted for all or much of the coming year.

Even with the stimulus, the American economy lost more than 4 million jobs last year, including an additional 85,000 in December, according to Labor Department statistics. And the unemployment rate last month was 10 percent — a figure that is widely expected to inch higher in the months ahead.

In their first quarterly report to Congress on the stimulus, issued in September, White House economists estimated that the Recovery Act had raised employment levels by more than 1 million jobs as of the third quarter.

The new report reflects actual data submitted by stimulus recipients indicating they had created or saved 640,000 full-time-equivalent jobs as of the third quarter.

But the White House's estimate of stimulus-induced jobs for 2009 is based on economic modeling and projections, and as such, is likely to be met with considerable skepticism from Republicans and other critics who have questioned the methodology and documented cases in which stimulus money went to dubious projects.

Romer acknowledged that it was hard to make employment-creation claims when the economy has shed about 8 million jobs in the last two years.

But she noted that job losses had declined dramatically since the first quarter, when they were approaching nearly 700,000 a month on average — far more than the approximately 69,000 a month lost during the fourth quarter of last year.