Keith Benman, Times of Northwest Indiana
The Obama administration's stimulus program pumped at least $251 million into Northwest Indiana's schools, nonprofits, roads and trains in 2009, giving many a boost as other funding dried up.
A Times' analysis of data from the federal government's Recovery.gov Web site shows area schools and education initiatives won the largest chunk of discretionary stimulus dollars, followed by transportation projects, local government and then nonprofits and private companies.
Wednesday marked the one-year anniversary of the American Recovery and Reinvestment Act, which President Barack Obama signed into law Feb. 17, 2009.
"That's a fairly substantial jolt in that short a period of time," said Indiana University Northwest Economics Professor Don Coffin of the overall $251 million figure. "I wouldn't treat it as a small thing."
Stimulus grants going to 104 individual region agencies and organizations through Dec. 31 ranged from the $32.4 million the Indiana Department of Transportation is spending on road and bridge projects to the $7,000 doled out to Hammond's Redeeming Ministries for a 60-inch commercial-grade stove.
Recipients say the money has been a literal lifesaver in some cases, as with the $13.9 million the Northern Indiana Regional Transportation District received to finish modernizing signals on the South Shore commuter railroad.
"We were concerned if we would ever have the money to complete the final phase of that project," said NICTD Planning and Marketing Director John Parsons. "Basically, the stimulus is covering all the costs, and that's good."
However, the recipient-reported data at Recovery.gov does not give a clear picture of how many jobs all that spending has created or supported in the region.
That's because recipients that receive stimulus funds through state agencies do not always report to the Recovery.gov Web site how many jobs are being supported. Instead, they report the number of jobs supported to the prime funding source, usually a state agency, which then puts the jobs number into its own tally.
At the end of December, federal stimulus spending was supporting 12,988 jobs in Indiana, according to the tally released by the state. Indiana has lost 198,600 jobs since the recession began in December 2007.
Economists say there is no doubt government spending on the order of a quarter of a billion dollars in an area the size of Northwest Indiana would create jobs. But the tricky part is figuring out just how many.
IUN's Coffin gave a rough estimate that stimulus spending of that magnitude would create 4,000 to 5,000 jobs in the region. Nationally, the $787 billion in total stimulus spending may have kept the unemployment rate from soaring into the 11-percent range, with the national rate now at 9.7 percent, Coffin said.
A factor favoring stimulus job creation in Northwest Indiana is that the region manufactures a number of vital products that is needed to build infrastructure. That means stimulus money spent on roads and bridges all over the nation is generating jobs at region steel mills and other manufacturers, Coffin said.
According to the Obama administration, the stimulus bill had two main goals: saving and/or creating jobs; and spurring economic activity by investing in long-term growth.
Nationwide, the Obama administration claims the stimulus directly supports the equivalent of 595,263 full-time jobs.
Originally, Recovery.gov was reporting those jobs as "created or saved." It now uses the broader term "recovery jobs funded" for all positions for which wages are paid by stimulus dollars for the quarter.
White House economists figure 2 million jobs altogether have been created or saved by the stimulus bill. The higher number varies from counting indirect jobs created when stimulus-supported wage earners go out and spend their paychecks. The economists also count jobs created at suppliers, such as Northwest Indiana's steel mills.
The White House economists' jobs number also includes the effect of all other spending included in the stimulus bill, such as the Making Work Pay tax credit, which boosted workers' take-home pay, and the extension of unemployment benefits.
Although the discretionary investments in transportation, infrastructure, schools and nonprofits drew much of the attention when President Obama signed the bill last year, that spending made up only 40 percent of the bill.
Altogether, $280.8 billion of the spending was in tax cuts; another $108 billion was spent directly, mainly for Medicaid, extending unemployment insurance and other programs.
The White House jobs number is hotly contested by Republicans, who, save for a few, voted against the stimulus bill in Congress. Republicans have demanded a new stimulus bill that will help support small businesses.
Pat Obi, a finance professor at Purdue University Calumet, said he would like to have seen stimulus money used specifically to free up lending to small businesses, which are the largest job creators in the U.S. economy.
"We have to ask ourselves, what really is the goal we are trying to achieve?" Obi said. "If we are appropriating money to stimulate a dead economy, where will we get the biggest bang for the buck?"
Obi said it would have increased the stimulus program's potential to create jobs if even more had been spent on constructing infrastructure. It is a given that building a road or bridge creates jobs that pay good wages, which the job holder then goes out and spends, he said.
"People will get that job, and they will earn money," Obi said. "And guess what? They will also pay taxes on that income."
Most economists in hindsight now agree what definitely did not work were the tax rebates of $300 to $1,200 per taxpayer that then-president George W. Bush signed into law as the centerpiece of his $168 million stimulus plan in February 2008. Those rebates went mainly to pay off personal debt or into personal savings accounts and never provided the economy with any significant jolt, Obi said.
"Shortly after the Bush rebates, what happened?" Obi said. "We plunged into recession -- the deepest recession the country had seen in some time."