One Year Later: Recovery Act's Aura Still Unclear

On this first anniversary of the Recovery Act becoming law, the debate still rages in Oklahoma -- is the stimulus helping our hurting the economy?

Wednesday, February 17th 2010, 4:21 pm

By: News 9


By Alex Cameron, Oklahoma Impact Team

OKLAHOMA CITY -- On this first anniversary of the Recovery Act becoming law, the debate still rages in Oklahoma -- is the stimulus helping our hurting the economy?

In signing the landmark legislation, President Obama signaled a belief that $787 billion worth of tax breaks, grants and direct agency support would put the breaks on the nation's sharp economic slide by creating or saving millions of jobs.

After watching the unemployment rate climb to its highest level in two and half decades in October (10.2%), the administration has taken some solace in the fact that the rate has since come down several points. The seasonally adjusted jobless rate for January was 9.7%. It was 7.7% one year ago.

Wednesday President Obama said the ARRA (American Recovery and Reinvestment Act) had saved at least 2 million jobs and helped the country avoid deeper recession. He also conceded that too many people are still in need of work and many more are struggling to pay bills.

To those who are still hurting, it doesn't "feel much like a recovery," President Obama remarked.

In Oklahoma, like the rest of the nation, the majority of the stimulus funding has yet to be spent. According to the federal recovery web site, as of the first of the year, $2.3 billion in stimulus funding had been awarded in Oklahoma, with $925,000 of that actually being paid out. It's expected Oklahoma's share of the stimulus money will eventually reach about $3 billion.

The Oklahoma Impact Team has documented some of the various ways that stimulus money is being used in Oklahoma: broadening the reach of the Commerce Department's weatherization program, enabling schools to purchase new equipment for their kitchens, allowing the Department of Transportation to move up key projects in its 8-year construction plan, to name a few.

Still, it's been difficult to get a clear answer to the question of whether this injection of one-time money into government programs and processes is really beneficial to the economy or just wasted spending.

"It's helping," Governor Brad Henry proclaimed during an interview back in November. "It's certainly saving jobs in Oklahoma, [and] it's creating some jobs."

Governor Henry is correct -- the problem is, no one can really say how many jobs have been saved or created, because the federal reporting requirements for employers have been confusing and inconsistent.

For example, the Oklahoma City office of AmeriCorps, which is using stimulus money to place workers with non-profit agencies across the state, reported 58 jobs "saved or created" during the initial reporting period (February '09-September '09). Under the government's new reporting method, that number dropped to 29 for the second reporting period (October '09-December '09), despite no change in the program itself.

That's a 100% change, and that's just one small stimulus program.

Then there's the question of whether it makes good economic sense to spend billions of tax dollars on things like academic research, drug and alcohol treatment programs, Medicaid, and other entitlement programs. Stimulus critics have a ready answer:

"This is a political deal," charged Vince Orza, Dean of Oklahoma City University's Meinders School of Business. "This is everybody getting a piece of the action instead of really allocating the dollars most intelligently."

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