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Grassley, Thune: Administration's Battery Program Cost $158,556 Per Job Created

Press Release

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Date:
Location: Washington, DC

The Obama administration's advanced battery manufacturing program through the federal stimulus package cost $158,556 per job created, and many of those jobs likely were temporary, according to an analysis released today by Sen. Chuck Grassley of Iowa and Sen. John Thune of South Dakota. The analysis came after Grassley pressed for verification of the administration's claims of the economic benefits of the $2 billion program, which included a grant to a now-bankrupt company, A123 Systems. According to the analysis, the bankrupt company cost taxpayers more than $300,000 per job reportedly created by the stimulus bill.

"The taxpayers paid $2 billion for a pretty lackluster return," Grassley said. "The Administration billed this program as an all-around success toward creating jobs, but the results are a lot more mixed. The program cost $158,556 per job, including jobs that were later cut. Under the best-case scenario at the now-bankrupt A123, it cost $317,435 per job. The expense is significant, especially when many of the jobs were temporary. The Administration should not overstate the value of this program as a boon to economic recovery. The facts show otherwise. Adding insult to injury, A123 executives reportedly are seeking to retain $4.2 million in bonuses through the bankruptcy process."

"President Obama's failed stimulus spending program contributed to America's dangerously-high $16 trillion national debt and record federal deficits of over $1 trillion year after year," said Thune. "The Obama administration took nearly $2 billion of taxpayers' hard-earned money so the federal government could spend more. Spending $158,556 per job, many of which were temporary, was a waste of taxpayer dollars and failed to create the economic growth the president promised when he jammed his stimulus through Congress."

Earlier this month, a Department of Energy spokesman released an update on the advanced battery manufacturing program in response to the bankruptcy of A123 Systems, one of the grant recipients. The update said the program awarded $2 billion in grants to 29 companies to build or retool 45 manufacturing facilities spread across 20 states to build advanced batteries, engines, drive trains, and other key components for electric vehicles.

The update said the initiative was responsible for "employing thousands of American workers" but provided no documentation to support this claim. Grassley pressed for documentation and ultimately received some data showing a total of 12,613.77 jobs were "created" by the advanced battery manufacturing initiative from the signing of the stimulus act on February 13, 2009, to the present. Given the $2 billion cost of the program, that represents $158,556.88 per job created. Many of those jobs are likely temporary, but the Energy Department does not track how long the jobs are retained. Also, the data show the program did not achieve the overall goal of the stimulus program to create jobs as rapidly as possible.


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