Looking at the Big Picture on the Recovery Act

Last month, in a first-ever effort by the federal government recipients that received Recovery Act funds had to file a report saying how much they had received, what they had done with it, and how many jobs these funds had saved or created.  The reports were due just 10 days after the end of the federal fiscal year on September 30th, and were posted on Recovery.gov just 20 days later.

More than 130,000 such reports were filed.  You can go to Recovery.gov and look them up by zip code, or search for them on a map.  It’s a “real-time” update on your tax dollars at work that is unmatched by any federal initiative, ever, of this scale.

As part of President Obama’s commitment to transparency and disclosure, it’s been a huge success.  When you consider the sheer number of reports that had to be filed, processed, and posted; the fact that this had never been done before; and the very short time to check reports and make sure they were right – the data collected and posted is very impressive.

Unfortunately, it would be hard to know that by reading some of what’s been written and said about recipient reporting.  The Administration has been criticized for pointing out to the independent Recovery Board some erroneous reports that should not have been posted – and for failing to find all the erroneous reports.  Skeptics have raised doubts about reports that show jobs created with no funds spent (although that is possible, as workers are hired in anticipation of projects starting), or funds spent with no jobs created (when materials are purchased for projects that are not yet underway).

Some filers, working with the new system, punched in the wrong Congressional district, and some just got the data wrong.  And about 10% of those folks who were supposed to file a report haven’t filed it yet.

We fully agree with those who find the mistakes in the data frustrating – and we’ve been working with the Recovery Board to find the mistakes, and fix them.   Just because mistakes are inevitable in any new system – especially one this large, and this new -- doesn’t mean they are acceptable.  We are going through the reports with a fine tooth comb, identifying mistakes, and working with filers to correct them.  That said, three big picture points should not be lost.

First, the mistakes are RELATIVELY few, and don’t change the fundamental conclusions one can draw from the data.   Even if as many as 5-10% of the reports or 5-10% of the totals are wrong (and we don’t think it is that high), that still means the Recovery Act saved or created between 600,000 and 700,000 direct jobs in its first seven months – more than most experts predicted when it passed.  And most leading experts agree that – whatever the recipient reported total should be – the actual number of jobs saved or created is about double that, because the recipient reports don’t include direct payments to individuals, the jobs created by Recovery Act tax cuts, and the jobs created when workers on Recovery Act projects spend their paychecks. 

Second, some of the mistakes are frustrating typos and coding errors that don’t undermine information at the heart of the data.   Yes, it is “silly” that Recovery.gov shows that a project went to the 15th Congressional District in Arizona – when there is no such district.  But a “click” on the project details gives you the address, and a check on the address shows it is in Arizona’s 3rd district.  All this shows is that when people send in 130,000 reports, some will have silly mistakes.  But it doesn’t really undermine the ability of the public to track and follow the data – or the fact that real jobs have been created.

Third, transparency is going to be messy – but it is better than the alternative.   It would be great if every report filed was correct the first time, on time, and contained no errors.  But that’s not realistic when 130,000 reports are being filed in a 10 day period.  It would be great if the reviewers at the federal agencies, could have found all the mistakes in the 20 days they had to do the job, gotten the reports back to the recipients to be fixed, and reposted  – but again, that isn’t realistic.  And so, it’s all out there now for the public to see – because the Recovery Act chose speed and transparency as its watchwords – and the result is some data errors for the critics to pick over.  But think about it this way:  What government program has ever even attempted to provide this sort of information, on this scale, this quickly?  In my over thirty years of government service, I can tell you without hesitation:  something like this has never happened before.  In previous administrations, hundreds of billions of dollars have been spent without anyone being asked what happened to the money, being asked how it was spent, or being asked how many jobs were created – and some of the loudest critics of Recovery Act data today were shockingly silent.  And if these questions were asked, answers would usually take months or years to produce.

Last month, something happened that has never happened before.  Critics – some well intentioned, some who just wanted to discredit the Recovery Act -- have had over two weeks to try to make hay with  the data.   But no criticism has come close to discrediting the larger and most important point:  that the Recovery Act has helped save or create more than 1 million  jobs across America and across various sectors of the economy.   The data will get better and better – but in the noise over counting jobs, we shouldn’t lose sight of the Recovery Act’s progress in creating them.

G. Edward DeSeve is Special Advisor to the President, Assistant to the Vice President and Special Advisor to the OMB Director for Implementation of the Recovery Act