Obama, Gov. McDonnell Both Take Credit For Virginia Job Growth

Share

SOURCE: Washinton Post

RICHMOND -- First, President Obama credited his federal stimulus package with producing 73,000 jobs in Virginia.

Then, one day later, Gov. Robert F. McDonnell announced that he had helped create 71,500 jobs in Virginia since taking office -- in part because of the strong economic climate he had fostered.

Although Obama and McDonnell referred to different numbers, experts agree that there must be overlap.

"It's really impossible to allocate jobs to this policy or that policy," said William M. Shobe, director of the Center for Economic and Policy Studies at the Weldon Cooper Center for Public Service at the University of Virginia. "Everyone is taking credit, and nobody can prove that it's not true."

As the economy gradually begins to turn around, politicians everywhere are clamoring to show that they are responsible for whatever gains have been made.

Obama (D) has made turning the economy around a top priority, and his reelection will hinge largely on his success or failure. McDonnell (R), barred from running for a second consecutive term, has dubbed himself a jobs governor as he hopes to solidify his legacy as a leader who returned jobs to the state.

Obama announced July 14 that the stimulus has saved or created 73,000 jobs in Virginia, calculated using a Council of Economic Advisers formula based on historical estimates and state data, such as population and stimulus dollars received.

The council did not determine which industry most benefited from the jobs, but the head of the council, Christina Romer, estimated that some would probably be in the areas of manufacturing, clean energy, education and construction.

Romer said that Virginia is adding jobs at a "good pace" and that the Recovery Act is "playing a crucial role in getting the economy going."

McDonnell announced the next day that Virginia had added 71,500 jobs over four months, according to the U.S. Bureau of Labor Statistics, which surveyed payrolls between Feb. 1 and May 31. It was the third-highest number in the country, behind Texas and Pennsylvania, during that time period.

Industries with the most growth were hospitality, the federal government, and professional and business services.

"Something good is happening in Virginia," said Lt. Gov. Bill Bolling (R), whom McDonnell appointed his chief jobs-creation officer. "We're making good choices. We're making smart decisions, and if we continue doing that . . . we are very optimistic we can continue to see progress."

Josh Bivens, an economist with the left-leaning Economic Policy Institute, said that if Congress had not passed the $787 billion Recovery Act, the number of new jobs in Virginia would have been considerably lower, perhaps between 50,000 and 60,000.

"A good chunk of those jobs are stimulus," he said.

McDonnell, who had been critical of the Recovery Act for not focusing enough on creating jobs and spurring the economy, said the stimulus probably helped create some of the public-sector jobs, which made up about 20 percent of the new positions, but not necessarily the private-sector jobs, which accounted for 80 percent.

"We're ranked third in all these job-creation measures, so the good news is there's something different going on in Virginia that's not going on in other states that have also received stimulus money," McDonnell said. "A combination of our environment, the incentives, the pro-business message that we're articulating and a lot of work from the private sector account for the bulk of these numbers."

Where the money went

But Romer said it's a mistake to think that stimulus money has been used only for public-sector jobs. The administration has estimated that 90 percent of the jobs saved or created will be in the private sector.

Virginia has received $6.9 billion in stimulus money. Almost $3.9 billion has been spent.

Nearly 1,200 small businesses received loans worth $520 million; 3 million families received $1.5 billion in tax cuts; 370,000 residents received expanded unemployment benefits; and more than 1.2 million seniors, veterans and others received one-time payments of $250, totaling more than $300 million.

And reports from stimulus recipients show that federal contractors in the D.C. area continue to receive proportionally high amounts of stimulus money.

But McDonnell downplayed the benefits of the stimulus. Instead, he talked about the state's low taxes, minimal regulations and strong right-to-work laws. He also touted the $50 million economic development package the General Assembly passed this year at his request. It included programs to lure businesses to the state; investments in the tourism, wine and film industries; and incentives to encourage energy research and economic development at universities.

McDonnell's economic development team has closed 110 deals that resulted in 7,154 jobs costing taxpayers $17.6 million since he came into office Jan. 16. Some deals began before he became governor, but others were more recent, including the luring of defense giant Northrop Grumman, which picked Falls Church for its new headquarters.

McDonnell, who spent last week on his first trade mission to Europe, plans to open trade offices in India, China and the United Kingdom.

No blame, no credit

James J. Regimbal Jr., a former staff member of the Virginia Senate's Finance Committee and an economic consultant in Richmond, said that all governors boast of their success with job creation but that luring companies to the state has more to do with workforce training, transportation and quality of life.

"All governors do the exact same thing,'' he said. "They don't deserve the blame or credit."

No matter who is responsible, there are signs that Virginia is starting to ease out of the recession. The state finished the fiscal year with an unexpected $220 million budget surplus, and its unemployment rate dropped slightly in May, to 7.1 percent, down from 7.3 in March.

Virginia often makes quicker economic recoveries than other states because it's close to the federal government, attracts tourists and is home to one of the largest ports on the East Coast, said Stephen S. Fuller, director of the Center for Regional Analysis at George Mason University.

"These are positive numbers," Fuller said. "Virginia has done better than other places."