The Obama Administration has tacitly acknowledged that requiring recipients of federal recovery money to count the number of jobs "created or retained" was a bad idea. In a memo dated 19 December, White House budget director Peter Orszag says that henceforth recipients of funds from the American Recovery and Reinvestment Act "will no longer be required to make a subjective judgment" on the matter. Instead, they are to count "jobs funded with Recovery Act dollars."
"We think it's a winning approach all around," says Office of Management and Budget spokesman Tom Gavin."We want to make this as user-friendly a system as we can."
The change hasn't been widely noted in the press. And it was not mentioned during a 13 January White House briefing by the Council of Economic Advisers. In fact, CEA reported that the economic recovery promised from ARRA funding was progressing right on schedule, with 640,000 jobs "created or saved" by the third quarter of 2009 and between 1.5 and 2 million by the fourth quarter.
Many critics have ridiculed the "created or saved" criterion because of the absence of a baseline comparison drawn from before ARRA was enacted in February 2009. It probably also didn't help that the unemployment rate has thus far surpassed what the CEA had forecast it would have been without ARRA. (For a chart, see Harvard University economist Greg Mankiw's 8 January unemployment update).