The Recovery Act Blog

  • Recovery in Action: "Energy Squads" in the Twin Cities

    Before we get into the national round-up, we wanted to highlight one particularly action-packed story out of Minnesota. The headline from the Star-Tribune is 'Energy squads' find and stop waste":

    As the biggest storm of the season so far descends on the Twin Cities, some lucky homeowners are getting expert help battening down the hatches and lowering their utility bills. The bonus? It's costing them peanuts.

    The Center for Energy and the Environment (CEE) in Minneapolis and Neighborhood Energy Connection (NEC) in St. Paul, both nonprofits dedicated to energy efficiency, began pilot programs in the fall in select neighborhoods. Their crews replace light bulbs, wrap fiberglass blankets around water heaters and weatherstrip doors. All the homeowners receiving these customized services had to do was attend a free workshop, then pay $30. Besides the installed products, they get utility-bill savings averaging $127 a year.

    Xcel Energy Inc. and CenterPoint Energy pay both programs' labor costs as part of their efforts to meet state-mandated conservation goals. But in January the two utilities will begin offering Home Energy Squad, their own joint program, to other customers in the seven-county metro area. It will be a limited version of the neighborhood-focused visits offered by NEC and

    CEE, and will expand over the next three years. You must be a customer of Xcel electric and either Xcel gas or CenterPoint gas to be eligible. This is the first time the utilities have collaborated on such a broad scale, said Todd Berreman, who oversees CenterPoint's conservation programs.

    And what allowed CEE and NEC to expand expontially? You got it, the Recovery Act. Who else has been reaping the benefits of the Recovery Act? Let’s go with alphabetical order so as not to offend anybody:

  • Recovery in Action: Powering a Greener Economy

    While President Obama and key members of his Administration work to address global climate change issues in Copenhagen, here at home the Recovery Act is funding a wide array of projects to increase energy efficiency, develop new clean energy technologies, and train workers for the green jobs of the future. The President recently spoke about how the Recovery Act is helping retrofit existing homes and businesses to take advantage of new energy-saving technologies, and news outlets and officials across the country are reporting on new Recovery Act-funded clean energy projects in their communities. A sample of these stories are linked below, detailing new projects in Colorado, Georgia, Iowa, Tennessee and Washington:

    Georgia, Fox 5 Atlanta, 12/18/09

    Solar Energy Projects Will Receive Funding Through Georgia’s ARRA-Supported Clean Energy Property Rebate Program:  “State officials say solar energy projects are receiving $4.5 million through Georgia's Clean Energy Property Rebate Program. A bill aproved by the Georgia Legislature this year created a commercial clean energy rebate program for solar, wind, energy efficiency and geothermal heat pump projects, with funding contingent on the availability of federal stimulus money. Georgia Environmental Facilities Authority executive director Phil Foil says his agency received $82.5 million in stimulus funds for the state energy program and obligated $4.5 million for clean energy rebates.”

    Iowa, Office of Senator Tom Harkin, 12/17/09

    Senator Harkin Announced More Than $45,000 In Recovery Act Funding For Energy Efficiency And Conservation Block Grants: “Senator Tom Harkin (D-IA) announced today that Sac and Fox Tribe of the Mississippi in Iowa will receive a total of $46,600 in Energy Efficiency and Conservation Block Grants (EECBG) from the Department of Energy (DOE) as part of the American Recovery and Reinvestment Act (the Recovery Act)... Specifically, this funding will be used for: energy audits and building retrofits in the residential and commercial sector, the development and implementation of advanced building codes and inspections and the creation of financial incentive programs for energy efficiency improvements.”

    Colorado, Telluride Watch, 12/17/09

    The City Of Ouray Was Awarded A Stimulus-Funded Grant To Install A 20 Kilowatt Micro-Hydro Generating Unit; The System Is Expected To Save The City Approximately $12,000 In Annual Electricity Expenditures: “The City of Ouray has been awarded a $30,000 grant from the Colorado Governors Energy Office to install a 20 kilowatt micro-hydro generating unit to be located at the Ouray Hot Springs Pool... The electrical output from the system will be net-metered to offset the electricity use of the pool complex, saving the city approximately $12,000 in annual electricity expenditures. The powerhouse for the project will be constructed by a shop class from Ouray High School. Once completed, the project will provide an added tourist attraction to visitors to Ouray Hot Springs"

    Tennessee, Nashville Business Journal, 12/16/09

    Tennessee Career Center Will Use Stimulus Funding To Train Displaced Workers In Business Information Technology, Solar Panel Installation/Welding, Practical Nursing And Physical Therapy: “Displaced workers from General Motors' Spring Hill facility and the plant's associated suppliers may benefit in $1 million worth of new grants from the American Recovery and Reinvestment Act, the Tennessee Department of Labor and Workforce Development announced Wednesday... Training will be available in business information technology, solar panel installation/welding, practical nursing and physical therapy, among other areas. Training providers include the Tennessee Technology Center at Hohenwald, the Tennessee Technology Center at Pulaski and Columbia State Community College.”

    Washington, Gov. Chris Gregoire's Office, 12/17/09

    Stimulus Will Fund Projects To Build Or Enhance Clean Water Infrastructure In Washington State, Create Nearly 1,280 Construction Jobs: “Gov. Chris Gregoire and the Washington Department of Ecology have approved the last four projects to share part of $66 million in Recovery Act funding to build or enhance clean water infrastructure. They will share $9 million and provide nearly 80 short-term construction jobs. They bring to 17 the state’s total of clean water projects funded through the Recovery Act. Together, they are estimated to create 1,280 construction jobs and retain 21 jobs in the state…’This is an incredibly fast time frame for communities to get contracts bid and signed in the next two months, and I thank everyone for pitching in to move this along,’ Gregoire said. ‘The hard work of our communities will lead to job creation, economic recovery and environmental protection…Clark County’s Upper Whipple Creek habitat protection and runoff control project, which will receive $850,000 to protect five acres of critical wetland habitat. The project will reduce flooding and protect downstream reaches of the creek from runoff erosion…Cowlitz County’s failing sewer system in Ryderwood, which will receive $2.9 million to replace defective sewer mainlines and pipes. The project will rehabilitate or replace 28 sewer manholes…Rock Island wastewater treatment facility in Douglas County, which will receive $3.4 million to help construct a new wastewater collection system that will serve approximately 270 residents. The subsidy is a forgivable-principal loan. The city has applied for additional low-interest loan funding from the Clean Water Pollution Control Revolving Fund.” 

     

  • Learning from the Growth of the Internet -- the New Broadband Grants

    Today, Vice President Biden is in Georgia to kick off over $2 billion in Recovery Act grants and loans to bring broadband to communities that currently have little or no access to the technology, all rolled out over the next 75 days.  The initial $182 million investment  announced today is for eighteen broadband projects benefiting seventeen states, and has already been matched by over $46 million in private capital.

    We in the National Economic Council are releasing a new report (pdf) called "Recovery Act Investments in Broadband: Leveraging Federal Dollars to Create Jobs and Connect America."  The report explains the Administration’s strategy for using stimulus dollars wisely to get the biggest return on investment, in terms of jobs and exciting new opportunities for Americans.

    An intriguing part of the report shows how the Recovery Act now will do for broadband what federal efforts did for the Internet in the 1980s and 1990s.  Here are three pictures of the Internet over time, from 1988 to 2007.  The thing to notice is that the federal government invested first in the backbone of the Internet.  Next, it helped fund regional networks to extend the Internet’s reach.  With the backbone and the middle piece in place, private investment took off, leading to the Internet connections of the present day.

    Internet Expansion Maps

    Source: National Science Foundation, NSF and the Birth of the Internet (http://www.nsf.gov/news/special_reports/nsf-net).

    That’s the pattern we are following for the high-speed broadband funded in the Recovery Act.  A big focus of the new awards is on the “middle mile”—the infrastructure that connects the Internet backbone to communities across the nation. Our grants help build middle-mile infrastructure to underserved communities.  We make it easy to connect “anchor institutions” such as schools, libraries, and medical centers.  The middle mile investments, like the regional networks that filled in the Internet, set the stage for private investors to finish the job, with the so-called “last-mile” connections to homes and businesses. 

    Internet Middle Mile Chart

    Source: Merit’s History: The NSFNET Backbone Project 1987-1995 (http://www.livinginternet.com/doc/merit.edu/government.html).

    The broadband grants in the Recovery Act will total over $2 billion in the next 75 days, and over $7 billion within the next year.  There are many stories to tell about how these broadband grants will spur private investment and provide opportunities in jobs, education, health care, new businesses, and other realms.  To learn more, read our new report, and read the Vice President’s speech.

    Peter Swire is Special Assistant to the President for Economic Policy 

  • The President on Retrofitting Buildings: "Here's What’s Sexy About It: Saving Money"

    Read the Transcript  |  Download Video: mp4 (277MB) | mp3 (13MB)

    Yesterday the Vice President sent a memo (pdf) to the President demonstrating how the new foundation for a clean energy economy has been laid this year.  The memo is thorough and solid - take a look to get a shapshot of how the future will unfold as a result of the investments in the Recovery Act and the President's budget.

    Today the President honed in on one element of that emerging clean energy job market, an element he announced a renewed focus upon during last week's speech at Brookings – retrofitting homes.  Speaking at a Home Depot, he described the focus as one of several "strategic surgical steps," explaining why this area of the economy is so well-fitted for an immediate boost that will help the economy as a whole turn around:

    In our nation's buildings -- our homes and our office consume almost 40 percent of the energy we use and contribute almost 40 percent of the carbon pollution that we produce and everybody is talking about right now in Copenhagen.  Homes built in the first half of the last century can use about 50 percent more energy than homes that are built today.  And because most of our homes and office aren't energy-efficient, much of that energy just goes to waste, while costing our families and businesses money they can't afford to throw away.

    The simple act of retrofitting these buildings to make them more energy-efficient -- installing new windows and doors, insulation, roofing, sealing leaks, modernizing heating and cooling equipment -- is one of the fastest, easiest and cheapest things we can do to put Americans back to work while saving families money and reducing harmful emissions.

    As a result of a variety of investments made under the Recovery Act, including state and local energy grants, we're on pace to upgrade the homes of half a million Americans by this time next year -- half a million Americans:  boosting the economy, saving money and energy, creating clean energy jobs that can't be outsourced.  But this is an area that has huge potential to grow.  That's why I'm calling on Congress to provide new temporary incentives for Americans to make energy-efficiency retrofit investments in their homes.  And we want them to do it soon.

    I know the idea may not be very glamorous -- although I get really excited about it.  We were at the roundtable and somebody said insulation is not sexy.  I disagree.  (Laughter.)  Frank, don't you think installation is sexy stuff?  (Applause.)  Here's what’s sexy about it:  saving money.  Think about it this way:  If you haven't upgraded your home yet, it's not just heat or cool air that's escaping -- it's energy and money that you are wasting.  If you saw $20 bills just sort of floating through the window up into the atmosphere, you'd try to figure out how you were going to keep that.  But that's exactly what's happening because of the lack of efficiency in our buildings.

    So what we want to do is create incentives that stimulate consumer spending, because folks buy materials from home improvement stores like this one, which then buys them from manufacturers.  It spurs hiring because local contractors and construction workers do the installation.  It saves consumers money -- perhaps hundreds of dollars off their utility bills each year -- and it reduces our energy consumption in the process.

    Get more on who the President spoke with before his remarks -- people representing every link in the chain for this sector -- in the White House background release.

    Meeting on Retrofitting at Home Depot

    President Barack Obama discusses the economic impact of energy saving home retrofits with labor, manufacturing, and small business leaders at a Home Depot in Alexandria, Va. December 15, 2009. (Official White House Photo by Pete Souza)

  • Wall Street Journal Debunks Wall Street Journal on Recovery Act

    There's a new report out from the Congressional Budget Office (CBO) on the economic impact of the Recovery Act. I'll get to the findings in a second, but somebody over at the Wall St. Journal's editorial page has a whole lot of explaining to do.

    Here what CBO found:

    Between its inception in February of this year and the end of September, the American Recovery and Reinvestment Act has:

    • Saved or Created up to 1.6 Million Jobs (midpoint estimate: 1.1 million)
    • Added up to 3.2% to the Growth of Real GDP (midpoint estimate: 2.2%)
    • Reduced the Unemployment Rate by as Much as 0.9 Percentage Points (midpoint estimate: 0.6 ppt)

    Now, these numbers may look familiar to you... they're about what we and other analysts have been citing all along (e.g., see Tables seven and eight in this CEA report).

    On the other hand, if you read the Wall St. Journal, these numbers will surprise you. Or, to be more precise, if you read the editorial page, you'll be in the dark. If you read the front page in today's WSJ, you'll learn the facts about the CBO report noted above in the context of an article that documents the importance of stimulus projects to construction workers. In fact, the article worries about jobs cuts once the stimulus fades.

    So, how does this square with lines like these from Journal editorials?

    "No matter how hard or imaginatively the administration spins, the reality is that the stimulus has been the economic bust that critics predicted it would be." –November 19, 2009

    "…the largest obstacle to turning this recovery into a durable expansion is now the very 'stimulus' programs that were sold as a way to ensure recovery." –October 30, 2009

     "We aren’t getting much bang for our $787 billion stimulus bucks." –November 25, 2009

    "It's hard to imagine a more complete repudiation of Keynesian stimulus than the evidence of the last year’s job market." –November 7, 2009

    "[The Recovery Act has not] made even the smallest dent in employment." –November 7, 2009

    "The White House says the stimulus created as many as one million new jobs, but this is single-entry economic bookkeeping." –November 7, 2009

    They don’t square at all, of course, because the editorial board is more interested in scoring political points by discrediting the Recovery Act's jobs impact than they are in reading their own paper’s reporting.   And let's be clear: while the new CBO findings are a welcome addition, these facts have been out there for months, including from an earlier CBO report last March (their updated findings are actually slightly improved).

    We're not asking for a free ride. We have and will continue to take great pains to provide information about the impact of the Recovery Act with more transparency than has ever been associated with a project of this magnitude.  Editorialists have every right to use that information to evaluate the impact of the act and to suggest ways that its performance could be improved upon.

    But I doubt you'll see that from the WSJ. Unless, that is, they start reading their own reporting.

    Jared Bernstein is Chief Economist to Vice President Biden and Executive Director of the Middle Class Task Force

  • Reality Check: The Very Real Jobs the Recovery Act is Supporting

    Reality Check

    Three months ago, the critics denied that the Recovery Act was making any jobs.  Today, everyone – including the critics - can see those jobs for themselves on Recovery.gov.  Now that the evidence has proven them wrong, they are left to cast doubts about just how many jobs were made and where.  But for all of the attempts to distract and distort from the program’s progress, these reports – directly from the recipients of Recovery Act dollars - make one thing indisputably clear: the Recovery Act is now responsible for supporting at least one million jobs across the country. 

    It’s time to keep the critics honest.  Here are some of the misleading things you may have been hearing about how we are tracking our progress supporting jobs through the Recovery Act – and the truth behind them:

    FICTION: The reports recipients of Recovery Act funds filed are riddled with errors.
    FACT: More than 130,000 reports were collected from recipients who were required to fill out 99 different data fields – that's over 12 million pieces of information collected directly from those putting the funds to work.  Much has been made of incorrectly coded Congressional Districts, but that issue – which the Recovery Board has already fixed – affected about 1 percent of reports.  And other potential over or under-counts of jobs you may have seen highlighted in the media amount to less than 5 percent of all reports.

    FICTION: The Administration is misleading people about where Recovery Act money is going.
    FACT: The reports you see on Recovery.gov were filed by over 130,000 recipients of Recovery Act dollars and they were responsible for inputting the information – including their Congressional District.  We don’t expect that these recipients – many of which are small community organizations or businesses - will do this perfectly the first time out of the gate, but we do take our role reviewing the reports very seriously and continue to work with the recipients to improve the accuracy of their reports.  The fact is, though, that the errors you are seeing are simply typos or basic human error.

    FICTION: The jobs that were listed in non-existent Congressional Districts were not real.
    FACT: The jobs and related projects listed are legitimate – they were just coded in the wrong Congressional District.  The Recovery Board moved quickly to correct the coding and posting error – but before that happened, the public was still able to click through to find the address of the recipient and confirm their correct Congressional District on their own.

    FICTION: The Administration has failed to meet expectations it set for the quality of data it would collect.
    FACT: From the beginning, even before the data was collected, Administration officials said repeatedly that they did not expect the initial reports to be perfect, but certainly expected them to provide an unprecedented and largely accurate look at the Recovery Act at work – and they do.  We will continue to collect this information every three months and we expect the data we collect to get sharper and more precise each time we do it.

    FICTION: These errors mean that none of the reports and related jobs numbers can be trusted.
    FACT: Overall, less than 5 percent of the reports have been identified as potential over or under-counts of jobs.  That is a lower possible revision rate than most long-standing, widely-accepted government economic indicators.  Take for example:

    • Payroll Employment, 2008: Original Average Monthly Decline – 157,000, Revised Average Monthly Decline –230,000, 46 percent lower than original

    Independent economist Mark Zandi said it best:

    • "Well, these numbers are [verified]. The 600,000-plus estimates from the administration come from recipients of the stimulus aid. And, so, we know for sure that these jobs are for real.  Now, of course, it doesn't count all of the other jobs created by the tax cuts and other elements of the stimulus. That is much more difficult to count, at least directly. But the 600,000-plus, that's numbers that are counted directly and accurate...  All of the statistics that we get on the economy that the government collects are based on surveys and samples, similar to the one that was conducted here. So, I think they are using the same approaches and techniques in constructing these estimates then -- that we use for constructing all kinds of estimates to try to get a gauge of where the economy is."  [Newshour, 10/30/09]

    FICTION:  The jobs numbers are already lower than expected – and this lack of credibility just makes the case for the job impact of the Recovery Act even weaker.
    FACT:  In fact, economists say that, because the reports cover less than half of the money put to work so far and only direct jobs, they point to a job impact of at least double what was reported.  So even if reports totaled only 500,000 jobs – not the over 600,000 reported – it would still confirm Administration and independent estimates of over 1 million jobs
    But don’t take our word for it.  Here is what economist John Irons, who is testifying before the House Oversight and Government Reform Committee on Recovery Act jobs today, had to say:

    • "New data from recipients of grants, loans, and contracts made under the Recovery Act count about 650,000 new jobs created or retained to date, one of the strongest signs yet that the Recovery Act has led to significant job creation. The data, which reflect a fraction of all the Recovery Act investments made to date, are consistent with other estimates of jobs creation showing that between 1.1 and 1.5 million jobs have been created or preserved as a result of the stimulus package to date. It follows recent news that the economy as a whole grew by a 3.5% annual rate in the third quarter, another indication that the Recovery Act has provided a much needed spark to the economy."  [Economic Policy Institute, 10/30/09]

    FICTION: The Administration already had to remove 60,000 inaccurate jobs from the website – who knows what other inaccurate items they’ve posted that should come down.
    FACT: The Administration worked with the Recovery Board to have 60,000 over-counted jobs removed from the list before it was ever posted on Recovery.gov in order to dramatically increase accuracy pre-posting.  Items flagged as possible over or under reports since the data was posted on Recovery.gov are a fraction of this size, indicating the vast majority of errors were caught before then.

    Liz Oxhorn is Recovery Act Communications Director