WASHINGTON – The government watchdog overseeing economic stimulus spending said Thursday that, in its rush to take credit for saving hundreds of thousands of jobs, the Obama administration was overly confident in its job-counting and did not acknowledge significant errors in the figures.

Numbers released last month identified more than 640,000 jobs linked to stimulus projects around the country. Despite warning signs that the numbers were flawed, the White House said the public could have confidence in them and they proved the administration was on track save or create 3.5 million jobs by the end of next year.

Since then, tens of thousands of problems have been documented, from the substantive to the clerical. Republicans have been able to use those flaws to attack what so far is the signature domestic policy of Obama’s presidency.

The criticism has resonated, even though economic data shows that overall government efforts, from President George W. Bush’s bank bailout to President Barak Obama’s stimulus, have improved the economy. Fewer than 1 in 10 Americans think the stimulus has created any jobs so far, according to a CBS News poll this week.

Earl Devaney, the watchdog whose group compiled and released the job data, said he could not certify the numbers were correct. Rep. Darrell Issa, R-Calif., asked whether the administration should have been more conservative and acknowledged it had “no idea” whether the jobs were being counted correctly.

“Wouldn’t that be a fairer way to put it?” Issa said.

“I like that statement,” DeSeve replied.

The White House said Thursday that it had been up front about the errors. Spokeswoman Elizabeth Oxhorn noted that, on the day the figures were released, Vice President Joe Biden said, “This is an unprecedented undertaking. And we know – we know that it’s not 100 percent accurate.”

The Obama administration has expressed varying degrees of confidence in the numbers, depending on who was talking and when:

-Sept. 23, White House communications director Anita Dunn: “It is not going to be a perfect process here at the beginning.”
-Oct. 29, White House press release: “These reports have been reviewed for weeks, errors have been spotted and corrected, and additional layers of review by state and local governments have further improved the data quality.”

-Oct. 30, Biden, in a White House press release: “These reports are strong confirmation that the Recovery Act is responsible for over one million jobs so far.”

-Oct. 30, White House economic adviser Jared Bernstein, in a report: “Focusing on (mistakes in the reports) risks obscuring a key point: Real-time reporting about job creation, with reports coming from thousands of projects all across the country, has never even been attempted before.”

-Oct. 31, Obama: “It is clear that the recovery act has now created and saved more than a million jobs.”

-Nov. 1, Treasury Secretary Timothy Geithner, when asked by NBC News whether the 640,000 figure was fact or spin: “This is a fact.”

-Nov. 6, Transportation Secretary Ray LaHood, in remarks to the Chamber of Commerce: “We know for a fact that Recovery Act investments have created or saved more than 640,000 direct jobs so far. These are real, identifiable jobs directly funded by the Act.”

-Thursday, Oxhorn, in a statement: “We have been clear from the beginning that the data would not be 100 percent perfect, but would provide a meaningful indication of Recovery Act job impact.”

WASHINGTON  – President Barack Obama announced Thursday that he’ll host a White House summit next month on combating the chronic joblessness that continues to be a drag on a struggling economy.

“We are open to any demonstrably good idea to supplement the steps we’ve already taken to put America back to work,” Obama said before taking off for a trip to Asia, where U.S. and global business prospects will be among the key issues under discussion.

Speaking at the White House, the president called a report showing fewer claims for jobless benefits “a hopeful sign.” But with millions of Americans out of work, Obama said the government has “an obligation to consider every additional responsible step we can” to get people back to work.

The nationwide unemployment hit 10.2 percent last month, the highest jobless rate since 1983. Economists believe more jobs will be lost, and the unemployment rate could possibly reach 10.5 percent next year because employers remain reluctant to hire.

The December jobs “forum” will bring in public and private sector experts to talk about how to get the job-creation engine running again, Obama said. Because economic prosperity at home is tied to economies around the world, the president said he also plans to talk about a strategy for growth with leaders in Asia.

“It’s a strategy in which Asian and Pacific markets are open to our exports,” Obama said. “Prosperity around the world is no longer as dependent on American consumption and borrowing, but rather more on American innovation and products.”

President Obama promotes pitches his economic policies to General Motors workers.

WASHINGTON  – Politically and economically, the next three months are critical for Barack Obama’s presidency.

The pace of the economic recovery heading into the fall – electric smooth or diesel rough – will determine whether Obama can prod Congress on the key features of his agenda with momentum or from a defensive crouch.

Steady economic improvement that is perceptible to the American public would boost his political standing and give him the thrust to get Congress to complete action on his ambitious plans to overhaul health care, attack climate change and put the financial sector under greater government oversight.

But a stumbling recovery would erode Obama’s currently high approval ratings, a source of much of his political power. At the same time, continued high unemployment might force Obama to ask Congress for another boost in spending to stimulate the economy – a political challenge that could delay if not undermine his other goals. So far there is little cause for cheer.

Since Obama signed the $787 billion economic stimulus bill in February, the economy has shed more than 2 million jobs.

Economists and heavyweight Obama backers such as Warren Buffet already are calling for another stimulus, saying the recession proved to be deeper and more devastating than originally believed.

“The economy took away everything they put on the table,” said Lawrence Mishel, president of the Economic Policy Institute, a labor-leaning economic think tank.

“We strongly believe we need another stimulus, and we need it now,” added Thea Lee, the policy director for the AFL-CIO.

Republicans don’t agree. “I’m very skeptical that the spending binge that we’re on is going to produce much good and, even if it does, anytime soon,” said Senate Minority Leader Mitch McConnell of Kentucky.

The need for a new stimulus has been a matter of internal debate within the Obama administration, according to people familiar with internal discussions. But White House officials have made no public commitments.

Vice President Joe Biden said the administration “misread how bad the economy was” but stands by its stimulus package and believes the plan will create more jobs as the pace of its spending picks up.

Biden, in an interview broadcast Sunday on ABC’s “This Week,” did not rule out a second stimulus but said it was premature now to say whether it would be needed.

Said Mishel: “Publicly they’ve been quite cautious. Sometimes annoyingly so.”

The conundrum for Obama is that his health care and climate plans ultimately rely on a strong economy. A weak recovery that falls short of the administration’s forecast of 3.2 percent growth in gross domestic product in 2010 would result in lower than expected revenue and greater potential deficits over time.

Trying to further prime the recovery, however, would require additional short-term deficit spending and there’s declining appetite for that in Congress as well.

“Perversely, you actually have to have higher deficits to generate some growth,” Mishel said.

Analysts and the administration officials say the full effect of the $787 billion is only beginning to be felt. But that initial beneficial shock to the system will dissipate and if the economy is still sputtering next year, it could become a political danger for Democrats who now control the White House and the two chambers of Congress.

“The economy is obviously being supported by significant stimulus,” said economist Mark Zandi of Moody’s Economy.com, who has advised Washington policy makers. “But that’s going to begin to fade by certainly this time next year, right in time for the next election.”

Many of those favoring a stimulus say it should be smaller than the current one. Estimates range from less than $200 billion to up to $500 billion. Advocates say it should contain unemployment assistance and aid to states. While some reject tax cuts as an element, others say it could include a payroll tax holiday.

Labor intends to make a louder case for a new stimulus. AFL-CIO President John Sweeney on Thursday issued a statement calling on Congress and the administration to “remain focused on stimulus efforts” and issued an international call for governments to increase stimulus spending by 1 percent of GDP.

“The employment numbers are so dire and the long-term prospects so poor that it seems clear to us that additional stimulus is needed and we need to start planning for it now,” the AFL-CIO’s Lee said.

Beyond unemployment, however, the economy is also hurting the employed, posing an even greater political risk to Obama and congressional Democrats. Work hours have declined and wages have eroded, a further drag on the recovery.

“It’s going to constrain the growth of consumption and the strength of any rebound,” Mishel said.

Complicating the calculus for the administration is the role deficits might play. Martin Regalia, chief economist for the U.S. Chamber of Commerce, maintains there is a 1-in-5 chance that deficits will drive up interest rates and that the economy will dip into recession again sometime next year.

“You don’t have to have a whole lot of dissipation in the growth in order to see a return to declines in the economy,” Regalia said.

RALEIGH, N.C. – Gov. Bev Perdue Tuesday announced that the N.C. Office of Economic Recovery and Investment (OERI) will hold the sixth in a series of workshops across the state providing information and guidance to local municipalities, businesses and interested citizens on how the federal recovery funds will be administered.

Gov. Perdue will speak at the Charlotte workshop on June 18, at 2:30 p.m. at the Harris Conference Center on the Harris Campus of Central Piedmont Community College, near Charlotte Douglas International Airport (3216 CPCC Harris Campus Drive, formerly CPCC West Campus Drive).

Workshop attendees will have an opportunity to hear from representatives of state and federal agencies administering the recovery funds. These representatives will discuss the current status of funds in their agencies, detail upcoming opportunities and explain the mechanisms for participation in the process.

“North Carolina is set to receive more than $8 billion in federal recovery money, and I intend for our state to not only be prepared to use this money to put our people back to work, but also to spend the money with the utmost accountability and transparency,” said Gov. Perdue. “These workshops will build the bridges between state, local and county governments – and anyone else interested in utilizing recovery funds – to ensure this money is used to benefit all of North Carolina and our people.”

OERI Director Dempsey Benton will lead the two-hour workshop. “The economic recovery funds are purpose-driven, rather than place-driven,” he said. “It’s important that attendees understand the funded programs, so they may actively participate. It’s also important for participants to understand the expectations for efficiency, transparency and accountability in the investment of funds.”

The OERI Web site, www.NCRecovery.gov, details the role of the OERI as the official coordinator, monitor and clearinghouse for federal economic recovery funds designated for the state. Workshop details are available at the site.

Economic Recovery Workshops recently have been held in Winston-Salem, Clyde, Kinston, Raleigh and Wilmington.

RALEIGH, N.C. – Voters in North Carolina continue to sour on Governor Bev Perdue’s performance in office according to the latest poll released today by the Civitas Institute.

According to the live caller poll of 600 voters, 46 percent of voters approve of the job she is doing as governor.  42 percent disapprove.  The 4 percentage point spread between those approving and disapproving of the Governor’s performance is down 32 points from her initial approval rating in Civitas’ February poll (52/16).

“In just three months Governor Perdue’s approval numbers have fallen dramatically,” said Civitas Institute executive director Francis De Luca.  “With unemployment continuing to rise and North Carolina’s economy continuing to struggle, voters are increasingly focusing their frustration on Governor Perdue.”

When asked if the Governor was doing a good job handling the economic crisis in the state, more voters disagreed (49 percent) than agreed (43 percent).

Voters also strongly disapproved of Governor Perdue’s action to cut the salary of state employees and teachers by 0.5 percent in order to close the current budget deficit.  65 percent disapproved of the cut while only 31 percent approved.

“Governor Perdue’s poll numbers are paying the price for unpopular actions,” added De Luca.  “Under her watch she has called for a $500 million tax increase, cut the salaries of state employees and teachers and seen unemployment skyrocket to in excess of 11 percent.  If the unemployment rate continues to go up, her poll numbers will likely continue to go down.”

For more polling information on Civitas polling see www.nccivitas.org/media/poll-results/.

Full text of questions:

Do you approve or disapprove of the job Bev Perdue is doing as governor?

Approve – 46%

Disapprove – 42%

Not Sure – 4%

Please tell me if you agree or disagree with the following statement:  Governor Bev Perdue is doing a good job handling the economic crisis in our state?

Agree – 43%

Disagree – 49%

Not Sure – 8%

Do you approve or disapprove of Governor Bev Perdue’s decision to cut the salaries of state employees and teachers in order to close the state’s budget deficit?

Approve – 31%

Disapprove – 65%

Not Sure – 4%

The study of 600 registered voters was conducted May 18-21, 2009 by Tel Opinion Research of Alexandria, Virginia.  All respondents were part of a fully representative sample of registered voters in North Carolina. For purposes of this study, voters we interviewed had to have voted in either the 2004, 2006 or 2008 general elections or were newly registered voters since 2008.

The confidence interval associated with a sample of this size is such that: 95 percent of the time, results from 600 interviews (registered voters) will be within +-4% of the “True Values.” True Values refer to the results obtained if it were possible to interview every person in North Carolina who had voted in either the 2004, 2006 or 2008 general elections or were newly registered voters since 2008.

RALEIGH, N.C. – Americans say that Congress and Wall Street/corporations share equal responsibility for the current state of the U.S. economy, according to a recent Capstrat-Public Policy Polling nationwide survey.

Some 30% of voters interviewed named Wall Street/corporations and Congress when given the choice among Wall Street/corporations, Congress, overreaching consumers and mortgage lenders.

Twenty-one percent of survey respondents blamed overreaching consumers, 19 percent blamed mortgage lenders.

When asked what or who is best able to fix the economy, 34 percent said Congress, 33 percent said overreaching consumers and 21 percent look to Wall Street/corporations.

The interactive-voice-response (IVR) poll also asked 629 voters about transparency of U.S. institutions.

Small businesses were rated somewhat or very transparent by 84 percent of respondents, compared to 32 percent for corporations. In last month’s survey, 40 percent of respondents nationwide said they had confidence in small businesses, compared to only 8 percent who said they had confidence in corporations.

“Transparency may not always translate into confidence, but in the case of small business vs. corporations, a correlation could be made,” said Capstrat CEO, Ken Eudy. “In these uncertain times, businesses should pay attention to whether their business practices appear to be transparent to their stakeholders. The reality of saying one thing while behaving another way undermines the perception of transparency and, in the final analysis, confidence in the business.”

Some 50 percent said news media were very or somewhat transparent, and 37 percent said the government was very or somewhat transparent.

The national survey, conducted by the Public Policy Polling May 27-28, 2009, polled 629 adults. The survey has a margin of error of plus or minus 4.1 percentage points.

Find the survey questionnaire and results at www.publicpolicypolling.com.

A Senate chairman who has a major role in writing health care legislation said Tuesday he hopes to convince President Barack Obama that taxing some employer-provided benefits will help control escalating costs.

Senate Finance Committee Chairman Max Baucus, D-Mont., may face a hard sell. During his campaign for president, Obama ruled out taxing health benefits provided by employers.

Read the full story

WASHINGTON  – Federal Reserve Chairman Ben Bernanke told Congress Tuesday that the economy should pull out of a recession and start growing again later this year.

But in testimony to Congress’ Joint Economic Committee, Bernanke warned that even after a recovery gets under way, economic activity is likely to be subpar. That means businesses will stay cautious about hiring, driving up the nation’s unemployment rate and causing “further sizable job losses” in the coming months, he said.

The recession, which started in December 2007, already has snatched a net total of 5.1 million jobs.

The unemployment rate “could remain high for a time, even after economic growth resumes,” Bernanke said.

Even with all the cautionary notes, the Fed chief offered a far less dour assessment of the economy.

“We continue to expect economic activity to bottom out, then to turn up later this year,” he told lawmakers.

Recent data suggest the recession may be loosening its firm grip on the country, Bernanke said.

“The pace of contraction may be slowing,” he said. It was similar to an observation the Fed made last week in deciding not to take any additional steps to shore up the economy.

The housing market, which has been in a slump for three years, has shown some signs of bottoming, he said. Consumer spending, which collapsed in the second half of last year, came back to life
in the first quarter.

In the months ahead, consumer spending should be lifted by tax cuts contained in President Barack Obama’s larger $787 billion stimulus package. Still, rising unemployment, sinking home values and cracked nest eggs will still weigh on consumers willingness to spend freely, Bernanke said.

In the latest sign the downturn could be easing, activity in the services sector contracted at a slower pace in April, the Institute for Supply Management reported Tuesday. Its service sector index came in at 43.7 in April, up from 40.8 in March. Any reading below 50 indicates the service sector, where most Americans work, is contracting.

Meanwhile, business investment remains “extremely weak,” and conditions in the commercial real estate market are “poor,” the Fed chief said.

Still, Bernanke said he was hopeful that production would pick up later this year to replenish stockpiles of goods that have been slashed. And there’s been tentative signs that the declines in other countries’ economic activity may be moderating, which could help sales of U.S. exports. They have been falling sharply, a key factor behind the drag on U.S. manufacturing, he said.

Private analysts are predicting the economy won’t shrink nearly as much as it had been – anywhere from a pace of 1 to 3 percent – in the current quarter. As Obama’s economic stimulus package of tax cuts and increased government spending takes hold, analysts think the economy could start growing again in the third or forth quarter of this year.

The economy’s rate of decline topped 6 percent in both the final three months of 2008 and in the first quarter of this year. It marked the worst six-month performance since the late 1950s.

Economists predict the jobless rate will jump to 8.9 percent in April from 8.5 percent in March as employers slash hundreds of thousands more jobs. The government releases that report on Friday. Unemployment is expected to hit 10 percent by the end of this year.

As Bernanke has said in the past, the Fed’s forecast for a recovery hinges on the government’s ability to gradually repair the financial system. “A relapse … would be a significant drag on economic activity and could cause the incipient recovery to stall,” he warned.

On the financial front, Bernanke said there have been signs of improvements in easing some credit stresses. However, financial markets remain under considerable strain.

Bernanke didn’t provide details about how 19 large banks fared on “stress tests.” Results, to be released Thursday, should shed light on which banks may need government support if the recession were to worsen.

He did say that after the results are released, banks will be required to develop “comprehensive capital plans for establishing the required buffers” to protect against future losses. They will have six months to execute those plans or get help from the government.

Bernanke said there are “significant opportunities for capital raising outside government programs,” and that many banks should be able to do so by selling assets or taking other steps.

The International Monetary Fund estimated that $275 billion more in capital would be needed to cushion against further losses at U.S. banks. While refusing to provide any numbers, Bernanke said he thought the IMF’s figure overestimated any additional capital needs.

Responding to lawmakers’ concerns about secrecy in its lending and bailout programs, Bernanke said the Fed will start providing information on the number of borrowers under each plan, details of credit extended and information on the collateral put up for the loans.

But Bernanke didn’t say the Fed would release the identity of borrowers, something lawmakers have pushed for.