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.”

RALEIGH, NC – A new study by the consulting firm Arduin, Laffer & Moore (ALM) Econometrics and released by Raleigh’s Civitas Institute concludes that the American Recovery and Reinvestment Act of 2009 (ARRA) will actually cause North Carolina to lose up to 67,000 jobs over the next two years.

NBC17 is checking with Gov. Bev Perdue for the other side. Check back here for updates on this story.

The study, entitled “The Economic Impact of Federal Spending on State Economic Performance: A North Carolina Perspective” concludes, “In North Carolina, between 51.1 thousand and 66.9 thousand job losses can be expected to occur during the time that ARRA funds are being spent.”

Co-authors of the report include Arthur Laffer, former member of President Reagan’s Economic Policy Board and creator of the famous “Laffer Curve;” and Donna Arduin, former top fiscal advisor to Gov. Schwarzenegger in California and governors in Florida, New York and Michigan.

As Arduin explains, “Government does not create anything – it merely redistributes wealth by taking money from those who pay taxes – those who are creating jobs and wealth – and spending it with bureaucratic inefficiency, reducing the incentive for taxpayers to save, invest, and employ people.”

Government stimulus schemes not only fail to create any net new jobs, but actually reduce job growth. According to Civitas Budget and Tax Policy Analyst Brian Balfour, “Because government projects necessarily only consume resources, fewer scarce inputs are thus available for productive investment. A lower level of productive investment translates into slower economic growth and fewer jobs.”

North Carolina already has its own case study in government “stimulus” spending. Gov. Mike Easley “fast-tracked”’ nearly $750 million in state government capital improvement projects back in January, promising “these projects will produce nearly 26,000 new jobs.” In contrast to such bold claims, North Carolina has since lost 17,000 construction jobs – a contraction of roughly 8 percent – and 71,000 jobs overall.

“North Carolinians should not be fooled by grand promises of government-orchestrated economic stimulus and job creation, whether from D.C. politicians or state officials,” warned Balfour. “The findings of this study along with the disappointing results of Easley’s ‘stimulus’ show that government stimulus schemes do more harm than good.”

The study also warns of the added burden to the state as it expanded unemployment insurance benefits in order to receive ARRA funds, an observation underscored by recent media reports of the $925 million North Carolina borrowed from the federal government to meet its unemployment insurance obligations.

View “The Economic Impact of Federal Spending on State Economic Performance: A North Carolina Perspective.”

President Obama joins labor leaders today to welcome the new head of the AFL-CIO, and name a new advisor for manufacturing.

This Labor Day, the nation’s jobless rate is 9.7 percent, and Republicans argue the health reform plan Mr. Obama outlines Wednesday, requiring everyone to buy insurance, could cost millions more jobs:

“It’s complicated, it’s convoluted and it’s quite simply not going to work. It’s time to press the ‘reset’ button,” said Minnesota Rep. John Kline.

On Meet The Press, a top White House Advisor was asked if Mr. Obama will compromise on the controversial ‘public option’ – government insurance.

“He believes the public option is a, is a good tool. Now, it shouldn’t define the whole healthcare debate, however said,” said  White House Senior Advisor  David Axelrod.

But before that, the President’s set to address the nation’s schoolchildren Tuesday… A speech that rattled some parents who say they’ll keep their kids home, fearing the 18-minute speech will be partisan.

The Secretary Of Education says the President will simply encourage students to stay in school.

“The real question I have is why has it been 18 years since a president has addressed our nation’s youth?” said Arne Duncan, Education Secretary.

More controversy…White House Advisor Van Jones quit in the middle of the night Saturday after being linked to comments questioning whether the government played a role in 9-11.

“Van Jones, as he says in his statement, understood that he was going to get in the way of the president and ultimately this country,” said White House Press Secretary Robert Gibbs.

Jones says he’s the victim of a ‘vicious smear campaign.’ he advised the president on green jobs.

Governor Bev Perdue will make a workforce development announcement as a part of her JobsNOW initiative that focuses on creating jobs.

Who:               Governor Bev Perdue, North Carolina Community College System President Scott Ralls, North

                        Carolina Commerce Secretary Keith Crisco and WakeMed Sr. Vice President of Human

                        Resources Jeanene Martin

Where:           WakeMed’s Children’s Emergency Department

                        WakeMed Raleigh Campus

                        3000 New Bern Avenue

                        Raleigh, NC 27610    

When:             Thursday, April 16

                        11:30 a.m.

ASHEVILLE, N.C. – North Carolina Rep. Heath Shuler is meeting with educational, business and environmental leaders to discuss the future of his mountain district.

Shuler will speak Friday in Asheville about green-collar jobs, developing a work force, growing the economy and combatting global climate change. The Democratic lawmaker will be joined by Lt. Gov. Walter Dalton and other leaders from the region.

President Obama has said he wants to focus on building a green economy by retraining workers, and the $787 billion stimulus bill he signed last month includes tax incentives for clean energy, guarantees loans for companies that develop clean energy technologies and invests in research designed to reduce climate change.

CHARLOTTE, N.C. — Gov. Bev Perdue will make an economic development announcement regarding new jobs in the Charlotte area and participate in a ribbon cutting ceremony of her new Piedmont office today at 1 p.m. 

The governor will be joined by Lt. Governor Walter Dalton, Commerce Secretary Keith Crisco, Mecklenburg County Commission Chair Jennifer Roberts, Charlotte Mayor Pat McCrory, other area officials and business leaders.

The Piedmont office opening will be on the second floor immediately following the job announcement.

RALEIGH, N.C.  – Gov. Beverly Perdue’s budget proposal unveiled Tuesday would seek a dollar-per-pack increase in North Carolina’s cigarette tax and higher alcohol taxes to help narrow the state’s $3.4 billion budget gap for the coming year.

Perdue’s plan also would seek to reduce spending by $1.3 billion each of the next two years and reduce the state’s overall work force by more than 1,030 positions in the fiscal year starting July 1. That doesn’t include potential job losses in the public schools and university system, which would have more flexibility in making their own cuts.

“As families and businesses across our state are tightening their belts to make ends meet, government must do the same. But, in the process, we must not neglect the state’s most pressing needs,” Perdue said in a letter given to lawmakers as part of the budget.

The extra money and spending cuts attempt to deal with the state’s worst fiscal conditions in a generation. The Legislature will review the plan as it approves its own budget by this summer and sends it to Perdue’s desk for her signature.

Perdue would increase the cigarette tax from 35 cents per pack to $1.35 and seek a 5 percent tax surcharge on alcohol. The nearly $21 billion budget for the year starting July 1 would raise $508 million from the two proposed tax increases, the budget document said. Perdue also wants to raise a licensing fee on “professionals” from $50 to $200 to raise another $27 million.
 
The higher cigarette tax, if approved, would make North Carolina’s rate the 20th highest in the country, compared to the current 45th, according to Perdue’s budget. The cigarette tax was just 5 cents a pack until the Legislature agreed in 2005 to raise it over two years.

It also would further crumble what otherwise has been North Carolina’s special relationship with the tobacco industry.

“We might as well go ahead and get an ax and bring that business to its knees, which is what we would be doing,” said Democratic Sen. Linda Garrou, one of the Senate’s chief budget-writers. She represents Winston-Salem, the headquarters of cigarette maker Reynolds American.

Legislative Republicans criticized the tax proposals, saying there are many other ways to deal with the budget gap besides raising taxes, pointing to recommendations they have made to cut inefficient programs and intercepting other funds.

“The reason we have a revenue problem is that people don’t have money,” House Minority Leader Paul Stam, R-Wake. “This is the worst year to raise tax rates.”

North Carolina remains the country’s leading flue-cured tobacco state and its revenues and jobs helped build the state for much of the 20th century. But reduced demand for the leaf and changing views on smoking and health have led the Legislature to pass more smoking restrictions.
 
Perdue’s office promoted what few highlights could be found in an otherwise awful financial year for the state. Her proposal avoids broad-based tax increases – alcohol and cigarettes are targeted – issues no new debt and eliminates more than 20 outdated or duplicative programs.

The budget proposal also wants businesses with profits of less than $100,000 to be exempt the first $25,000 of net income from state tax, with the amount lowering to the first $15,000 for business making between $100,000 and $200,000. The state’s version of the earned income tax credit also would be increased starting with 2010 tax returns.

Perdue also would seek a “caregiver tax credit” to benefit people who take care of aging family members, along with the creation of a sales tax holiday for people who purchase equipment that helps conserve water, according to the budget document.

Perdue said Monday her budget would attempt to protect core services such as education and help create and retain jobs.

The new governor, who wrote several state spending plans while a Senate budget-writer in the 1990s, said she would raise overall spending for state education by $350 million over the next two years, led by a 2.5 percent increase for the K-12 schools. Federal stimulus money will help with the increase.

The budget document said he wold use $1.7 billion in federal stimulus money to help narrow next year’s budget gap and $1.2 billion to close the gap for the year beginning July 1, 2010.

State employees and teachers would receive no longevity pay increase for the next two years, saving $170 million annually for the state. Non-teachers would receive additional leave instead of longevity pay.

The American Reinvestment and Recovery Act is expected to create or save 3.5 million jobs by the end of next year. Some of these jobs will come from direct spending by the Federal government to improve the nation’s roads, bridges, schools, and other parts of our national infrastructure.

One such investment calls for spending $28 billion on highway construction. This money will be allocated to states across the nation, helping to partly offset the job losses that have occurred throughout the country.

Using the same economic model that predicted the overall job growth, we find that this particular investment will lead to 150,000 jobs saved or created by the end of 2010.

It is also worth noting that jobs in highway construction tend to pay better than average. The typical, or median hourly wage for all jobs in the economy was $15.10 in 2007 according to the most recent data from the Bureau of Labor Statistics. But for workers in the highway industry, the typical hourly wage was $18.31, a premium of over $3 per hour over the economy-wide median wage.

Looking more closely at different types of jobs within the industry helps to explain the difference. The median wage of blue collar, or production workers—folks who do jobs like welding and mixing—comes to about $16 per hour in highway construction compared to about $13.50 in the overall economy.

There are two sources by which these jobs come about. First, there is the direct impact of building new roads and fixing old ones, leading to employment for persons who, in the absence of this investment, would be out of work. This effect is responsible for just under two-thirds of the jobs, about 95,000.

The second effect is an indirect one. It refers to the economic activity generated when these new workers spend more than they would have otherwise. For example, someone who gets a job fixing a road through the Recovery Act might buy more groceries or more apparel, and this leads to more activity by grocers and retailers. This effect explains about 55,000 of these jobs.

Finally, note that we say these 150,000 jobs would be “saved or created.” In some cases, current employees on highway crews or in other sectors where these workers spend money will avoid layoffs due to these investments. Had the Recovery Act not passed, they would have become unemployed. Other jobs will be newly created providing a new job slot that did not exist before.

A state-specific overview of the estimated infrastructure investments will be available on Recovery.gov later today.

A White House estimate says North Carolina could gain 105,000 new jobs because of the stimulus package.