Overcoming ARRA Perception Problems

by Phineas Baxandall

Senior Analyst for Tax and Budget Policy, U.S. Public Interest Research Group

The recent article from Governing magazine, like those from the Wall Street Journal, USA Today and other outlets on the difficulty of counting stimulus jobs underscores what seems like an inherently skewed way people will look back at the American Recovery and Reinvestment Act. There is both a cognitive and administrative bias against appreciating some of the best programs and ARRA's benefits overall.

Cognitively, the problem is the fact that people notice new changes much more than change that didn't happen. Spending on shiny new projects - the kind that are mostly likely to have more startup problems and take longer to implement - receive most of the attention. New jobs, such as those going out to private companies that never before received federal funds, will get a lot more attention than enhanced unemployment benefits or Medicaid checks that would have been cut off if not for ARRA. In the realm of public opinion, the sober benefits of public structures that people have long depended upon are at a disadvantage. Few people notice if an ARRA grant avoids closure of a library, but many will notice the new book mobile run by a public-private partnership. Some programs like high speed rail will garner attention because of their newness, though even in that program most money will flow to unseen infrastructure upgrades and marginal speed enhancements that few people will notice.

The bias isn't only in people's perceptions; it's also in our public accounting systems. It's a struggle to calculate how many jobs would have been lost if a public program would have been cut. Public accountants need to make an extra effort to track down subcontractors and figure out which of their employees might have been laid off. To determine which existing public job was preserved by ARRA funds is to launch into the politically perilous task of asserting whose jobs are first on the chopping block. As ARRA funds gets mixed with other public monies, it's harder and less clear how to count the indirect and partial effect on jobs down the line to other public entities. It's very hard to point to particular jobs preserved by ARRA.

Not so when the money goes to private contractors and brand new projects that weren't already in existing spending plans. In that case, any employee counts and there's already a payroll list to count from. If required to look at subcontractors, accountant are also more likely to double or triple count employees who were hired through multiple contractors.

In sum, newer programs and funds channeled through private employers may end up looking like they generate relatively more jobs, even if they don't.

During the Great Depression, public stimulus job creation was fully recognized because money tended to flow through big new special purpose programs like the WPA where all jobs could be counted as "created" and where the program itself was carefully branded. The Obama administration has tried to create some similar recognition through those ARRA emblems we sometimes see at public works sites. Likewise, US DOT's "TIGER" emblem for its Transportation Investment Generating Economic Recovery program is aggressively branded. The USDOT even creates a special website for media sources and bloggers to download these logos in a variety of formats and platforms. The directives at this website strongly encourage display of these logos and give detailed instructions of how to maximize their visibility and impact.

Those of us who work on ARRA seek to foster deeper understanding of the different ways money must be spent to advance a variety of goals such as equity, transparency, performance, and long-term environmental progress. But 99-percent of the public debate will focus on a single metric: "How many jobs were created?" The next presidential campaign season will make the politics of these numbers particularly intense. Unless advocates and public officials find a way to overcome existing biases in how these answers get perceived, it's going to be a mighty skewed debate.