As funding ends, experts weigh law's impact on 'green economy'

The debate over whether the stimulus created jobs is heated and endless, with lawmakers continuously arguing the merits of economic projections and clean energy investments.

But one thing is clear: As federal agencies run out of stimulus funds, temporary workers are seeing their jobs come to an end.

"As soon as the money stops, one imagines jobs stop being supported," said Josh Bivens, an economist at the Economic Policy Institute. "My guess is we've passed the peak effect of the Recovery Act on jobs."

In recent months, many of the layoffs have been in education, as school districts announce reductions in the number of teachers they can afford without stimulus support. But green jobs are affected as well: Contractors at the Savannah River Site recently announced impending layoffs as they complete the stimulus-funded part of the nuclear facility cleanup. The Department of Energy also is expected to cut by two-thirds the cleanup team for a uranium-waste pile in Moab, Utah.

The Clean Water State Revolving Fund -- which received $4 billion in stimulus funds -- is also winding down. The Government Accountability Office recently reported that "the Recovery Act SRF programs funded an increasing amount of full-time equivalent (FTE) positions from the quarter ending December 2009 through the quarter ending June 2010, from 6,000 FTEs to 15,000 FTEs, declining to 6,000 FTEs for the quarter ending in March 2011 as projects were completed."


The overall effect of such cuts on the economy is minimal, Bivens said. It is also hard to gauge. The Office of Management and Budget estimates the Recovery Act funded more than 573,000 jobs in the first quarter of 2011, but no one keeps track of how many of those jobs are temporary.

Still, "what really drives economic impact is pace," Bivens said. "Its drawn-out pace has been steadily withering away. It's not any sort of cliff."

The American Recovery and Reinvestment Act provided $787 billion to agencies, providing loans and tax credits and jump-starting thousands of projects across the country. Democrats say the funding influx kept the United States from experiencing a second Great Depression; Republicans say it had little, if any, impact, and several committees have held hearings on the issue since the GOP took over the House in January.

The jobs count is perhaps the most controversial -- green jobs especially.

OMB gets its overall jobs estimate by counting up the man-hours spent on stimulus-funded jobs, as reported by recipients. But the agency does not account for whether any of those jobs would exist without Recovery Act funds. The Congressional Budget Office and the White House Council of Economic Advisors have also done their own evaluations; both suggest the effect of the Recovery Act on jobs has begun to wane.

"The Recovery Act was designed to be temporary," the Council of Economic Advisors wrote in a recent report. "The amount of stimulus outlays and tax reductions has begun to decline and ... as it does so, the impact on the level of GDP and employment will begin to lessen over time."

But advocates say investments in solar, wind and other renewables gives emerging companies a leg up, ensuring an American-based green industry that will provide future stable jobs. But at a recent House Science, Space and Technology Committee hearing, Rep. Paul Broun (R-Ga.) questioned whether the stimulus' investment in clean and renewable energy was actually creating a lasting jobs market.

"On one hand, the president advocates for federal investments in green technologies as an economic stimulus and jobs creator. On the other hand, U.S. taxpayer dollars are purchasing renewable energy equipment manufactured in Europe and Asia," said Broun, who is chairman of the investigations subcommittee.

"If the goal is to create jobs here in America, I'm not sure that this is the right method. Seems to me that the left hand doesn't know what the far left hand is doing."

First in, first out

At the Department of Energy, the Environmental Management and Weatherization programs were big job-producers, accounting for between 8,000 and 15,000 stimulus-funded jobs each quarter. But they are also the first to end; most projects will be completed by 2012, said Jaime Carlson, DOE's adviser to Secretary Steven Chu for Recovery Act implementation.

The programs, she said, are "really our first stab in making sure we have solid transition" for workers.

"These were really supposed to be short-term in nature," Carlson said, but she added that the agency's goal is to "make sure we have some short-term wins and create jobs now but also set up the pathway for innovation."

The Savannah River Site -- an old nuclear weapons facility in South Carolina -- will soon finish one of its projects under the environmental management program. The Recovery Act enabled DOE to invest $25 million on decommissioning a Heavy Water Components Test Reactor and laying down grout to ensure contaminants do not reach the groundwater.

The money delayed the layoffs of hundreds of workers whose jobs were in jeopardy because contractors could not pay the increased contributions to their pensions. Savannah River Nuclear Solutions -- which manages the overall operations of the site -- transferred 798 workers to the Recovery Act project, spokeswoman Barbara Smoak said. The remaining workers for the stimulus project were subcontracted.

"Recognizing that the work associated with ARRA at Savannah River Site was a project of defined scope with limited duration and funding, SRNS chose to augment the retained workforce by directly hiring very few workers, and instead ramp-up staffing for the project by subcontracting workers for the ARRA period of performance," Smoak said in an email. "Subcontractors were successful at hiring about two-thirds of the required workers from the local South Carolina and Georgia area, creating a significant economic boost to the region."

But last year, SRNS announced buyouts and future layoffs. In December, 328 workers volunteered to leave their jobs; 342 were laid off in February. Additional layoffs are planned for August or September, Smoak said.

DOE officials emphasized the cleanup that the stimulus made possible. DOE is on track to reduce its overall cleanup footprint by 90 percent by 2015, thanks to a $6 billion stimulus investment.

Much of that was done by hiring large numbers of temporary workers. Many were from the most unemployed sector of the economy, Carlson said, and DOE is providing career development counselors to look over résumés and help them transition to new jobs.

New skills

Officials are also hoping that employees who worked in the weatherization program -- which renovated about 400,000 low-income homes to be more energy-efficient -- are able to use their new skill set to find jobs in a burgeoning green economy. It is a hope shared by the BlueGreen Alliance, a partnership between labor unions and environmental organizations that advocates for green investments.

The group recently reported that the stimulus invested $93 billion in green economy activities and saved almost 1 million jobs. In a recent study with the Economic Policy Institute, it advocated such policies as mandating targets for renewable energy generation and reflecting the cost of carbon emissions in market prices.

"In short, the greatest near-term challenge facing the U.S. economy is finding enough work for un- or underemployed Americans, while the greatest long-term challenge facing the United States and global economies is constructing a smooth transition to much less carbon-intensive forms of economic activity," the study's authors wrote.

"Investments in the green economy help ameliorate both challenges. Not undertaking them would squander an enormous opportunity."

Yvette Pena Lopes, the group's senior director for policy and government affairs, said the Recovery Act has given green jobs a boost, pointing to new private investments in industries such as solar and wind, as well as the enthusiasm for retrofitting buildings and homes to make them more energy efficient.

"From our perspective, it was a great downpayment and continuation to our clean energy economy," she said. "Obviously more is needed ... but I don't think with this funding being down we're going to see jobs disappearing."

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