Truth Needle | Ad incorrect: Stimulus bills created jobs

The claim: A television ad paid for by the National Republican Senatorial Committee accused Sen. Patty Murray of voting for "a failed stimulus that didn't create jobs." At the same time, an ad by Republican challenger Dino Rossi's campaign attacked Murray for supporting "several stimulus bills which have done nothing other than run up the national debt."

What we found: The assertions are part of a Republican strategy that depicts Murray as a liberal with a "reckless spending agenda."

She has voted for more than $1 trillion of federal spending to stimulate the economy. Democrats say it helped to avert another depression. Republicans contend the stimulus was ineffectual and cost the nation vast sums it could ill afford.

The spending may seem to have had scant impact, with unemployment levels stubbornly stuck near double digits.

But claims that the stimulus accomplished nothing or created no jobs are hyperbole that isn't true.

In the past three years, Congress has approved a half dozen major measures aimed at blunting the recession and creating or preserving jobs.

The first was the $168 billion Economic Stimulus Act of 2008, signed by President Bush, to boost spending through tax rebates for households and tax breaks for businesses. Murray was among 81 senators — including a majority of Republicans — to vote for it.

Murray also supported subsequent efforts to juice the economy in other ways, including extending unemployment benefits to up to two years and giving $26 billion in aid to states to plug Medicaid budgets and to hire and retain teachers.

But the biggest attempt to jump start the economy, by far, has been the 2009 American Recovery and Reinvestment Act. With a price tag of $787 billion over 10 years (later adjusted upward to $814 billion), this smorgasbord legislation mixes spending projects and tax breaks in an attempt to get Americans working and buying again.

Among the provisions were spending for renewable energy and construction projects, increased Pell Grants for college students, the cash-for-clunkers auto rebate program and credit for first-time homebuyers.

About two-thirds of that $814 billion has been accounted for on the federal budget.

So did all that taxpayer spending rev up the economy?

According to the Obama administration's latest tally, the stimulus funded 750,000 full-time-equivalent jobs during the second quarter of this year, as reported by stimulus grant recipients.

But a more comprehensive analysis by the nonpartisan Congressional Budget Office (CBO) released in August concluded that the real payoff likely is much higher. Taking into account multiplier effects and other factors not included in the administration's count, the CBO estimated the stimulus legislation "increased the number of people employed by between 1.4 million and 3.3 million" in the second quarter of this year.

Put another way, stimulus spending helped lower the unemployment rate by between 0.7 and 1.8 percentage points from where it would have been otherwise, the CBO said.

The CBO is a federal agency charged with providing Congress impartial analyses on budget and economic issues.

Even the chief executive of a Whidbey Island shipyard that Rossi visited on a campaign stop last month credited federal stimulus spending for playing a big role in the company's hiring of dozens of workers.

All that may seem hardly reassuring with a 9.6 percent national unemployment rate and nearly 15 million jobless Americans. And there's an ongoing debate over whether the stimulus was worth the cost. The spending was tacked on to the national debt, which now stands at $13.6 trillion.

But it's untrue that it didn't create jobs or produced nothing besides more red ink.

As Mark Zandi, chief economist for Moody's Analytics and former adviser to Republican presidential candidate Sen. John McCain said in August, the country "would be in a measurably worse place if not for the stimulus."

Reported and written by staff reporter Kyung M. Song: 202-662-7455 or ksong@seattletimes.com