If you live in central Ohio, you’ve probably seen the news story about how the State of Ohio contracted out the administration of its Cash for Appliances out to a Texas company after a competitive bidding process in which the Texas company demonstrated that it has the best track record administering such programs. Unbeknownst to the Administration, the Texas company outsourced its call center operations for the Ohio program to a call center in Central America. When the Administration found out about it, the State demanded that the Texas company cease using its international calling center, but the company did not have one in the United States, and the program was so close to completion that it didn’t make sense to change providers… especially since the Texas company had not done anything wrong (except politically.)
Congressman Pat Tiberi is trying to crow that this is why the Ohio GOP Congressional Caucus was right to demand the Strickland appoint a bipartisan oversight board over the award of stimulus contracts. Here’s Tiberi gloating today:
We had hoped to shed light on the stimulus allocation process by asking the governor to bring in an independent oversight board. Instead, Governor Strickland seemed to think it was unnecessary; apparently it wasn’t. This money should have been used to get Ohioans back on the job. We take the responsibility of spending tax dollar seriously. It’s unfortunate the Strickland administration demonstrated such bad judgment.”
The problem is that the awarding of the contract to the Texas company was screened by a bipartisan oversight committee that already existed. It was awarded by the State Controlling Board. While Tiberi’s demand for the creation of yet another bipartisan panel was turned down, it’s difficult to see how another panel would have done any differently than the controlling board which is comprised of three Democrats and three Republicans from the Ohio General Assembly.
The other problem with the attack is the argument this some how constitutes as not getting “Ohioans back on the job.” The purpose of the program was not to create jobs solely to administer the program, the purpose was to stimulate the purchase of energy-efficient durable goods at a time when private spending for such things was otherwise non-existent.
So, on that front, you know, the actual goal of the program, how did this Ohio program do for Ohio?
According to June 8th press release from the Association of Home Appliance Manufacturers, very successful:
Many AHAM members have pointed to a significant increase in demand for the ENERGY STAR appliances included in the rebate program. AHAM’s April factory shipment report shows a nearly 20 percent increase in shipments of major home appliances compared to April 2009.
Year to date, shipments of core appliances are up 9.1 percent following four consecutive years of declines. Major retailers have confirmed that the rebate program has helped bring consumers back into stores. While the $300 million funding for the rebate program was significantly less than other stimulus programs, the return of consumers to stores also helped stimulate the purchase of goods other than appliances. In this regard, the appliance rebate programs have served as a catalyst for additional consumer spending and economic activity. The U.S. Department of Energy (DOE) estimated that $1.3 billion in consumer spending would result from the rebates being offered on home appliances alone.
“The state rebate programs, also known as ‘Cash for Appliances,’ have had a measurable, positive impact on the appliance industry. People who were sitting on the fence deciding whether to repair or replace their appliance were offered a compelling incentive to purchase a new energy efficient product. Not only did the rebate serve as an initial discount on the product, but the new product will offer consumers years of energy and utility savings,” stated Joseph M. McGuire, AHAM President.
Whirlpool has a number of manufacturing sites here in Ohio: it builds washers in Clyde, dryers in Marion, and dishwashers in Findlay. In the first quarter, Whirlpool announced more than twice the projected sales from the year prior as a result.
Yep, twice from a year ago.
Look, what happened with this contract was stupid because of the call center. But to say that it did not create a stimulus of creating and saving jobs here in Ohio is just as equally idiotic. The goal of the program was not to create jobs to administer programs. It was to stimulate people to buy goods. Goods that are made here in the United States.
And on that measure, it was an undeniable success.
I’d caution the Party of Privatization before they go too far on this politically. When John Kasich said he wants to privatize any government service that can be found in the phone book, he didn’t say which phone book. Ohio’s history of privatization, especially with prisons, shows that they tend to go to out-of-state businesses.
I can live with outsourcing call centers if it keeps the manufacturing jobs here. Ideally, we’d like to keep all the jobs we can. But which would you rather Ohio be more concerned with keeping? Low paying service call center jobs or higher-wage earning manufacturing jobs?
[UPDATE:] Several media outlets have erroneously reported that the Controlling Board vote to approve the contract was strictly “party line.” However, the minutes from the actual meeting, and this Columbus Dispatch story make it clear that State Rep. Jay Hottinger (R) voted to award the Texas company the contract. (See, Item 24 starting on page 2.)
So, to make it perfectly clear, a bipartisan Controlling Board, by a bipartisan majority vote, reviewed this contract and approved the awarding of this contract to administer this Cash for Appliances to this Texas company.
This, somehow, proves that Congressional Republicans were right that the bipartisan panel they asked Strickland to create to review such contracts would have somehow avoided all of this?
The media malpractice in covering this story is just amazing. Guys, this stuff is readily available on the Internet. Boehner, LaTourette, and Tiberi have absolutely no freaking clue what they’re talking about.