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Pace of stimulus spending plummets
Stimulus bill spending has slowed to a trickle, despite President Obama’s June order to his Cabinet to speed it up.
The average stimulus spending per week has dropped severely, to just $4.2 billion over the past month from $9.7 billion during the prior four months. The government spent $2.9 billion in the week ending Aug. 7.
Taxpayer groups say the numbers show spending decisions are random and prove that the $787 billion stimulus program has had no effect on the economy.
“This is a typical bureaucracy. They don’t operate in an efficient way. They can’t operate in an efficient way and make an impact,” said Leslie Paige, media director for Citizens Against Government Waste.
The spending has slowed despite Mr. Obama’s declaration in June that he was “not satisfied” with its pace, and his demand that his Cabinet secretaries accelerate the distribution of stimulus funds.
The White House said the rate doesn’t matter, and that the key is whether Mr. Obama’s overall targets will be met.
“Week-to-week measures are irrelevant,” said stimulus spokeswoman Elizabeth Oxhorn. “We remain on track to meet the ambitious goal that the president set in June: speeding the Recovery Act’s pace, so that $225 billion is obligated by the act’s 200th day.”
Spending as of Aug. 7, the 172nd day since Mr. Obama signed the bill, stood at $200 billion obligated. To meet the goal of $225 billion, the government will have to spend nearly $1 billion each day over the next four weeks — or nearly double the pace of the past four weeks.
But taxpayer groups fear those sorts of deadlines can force agencies to spend money on wasteful projects, and states and localities say one reason the rate of spending is slow is because they need to meet all the transparency and productivity requirements imposed by Congress and the Obama administration.
In June, Mr. Obama recognized that spending was lagging and told his Cabinet to flood the economy with stimulus money.
“I’m not satisfied,” he said.
Early last month, though, he said he’d always figured spending would be a longer-term project, and said the stimulus bill was working as he’d expected.
Still, some Democrats in Washington are worried. House Transportation and Infrastructure Committee Chairman James L. Oberstar, Minnesota Democrat, sent letters last week to Florida, South Carolina and Hawaii chiding them for spending transportation money too slowly.
But the states took umbrage at the charge, saying they are following all the rules laid out by Congress and the administration.
Hawaii officials said they wanted to spend the money on major infrastructure projects such as bridge repairs that would produce jobs for years. They said that seemed a better use than the quick repaving projects that have received stimulus money elsewhere, and produced jobs that lasted only several weeks.
“In this day when major construction projects require extensive environmental reviews, observance of clean water act measures and other permitting requirements, the insistence on ‘shovel ready’ as the criterion for projects limits work to paving and other minimal restoration and preservation projects,” the state Transportation Department said in a lengthy response to Mr. Oberstar.
Ms. Oxhorn signaled that states will have to figure out their spending on their own.
“We know that a number of factors account for the pace of state action. Our responsibility is to get the federal efforts moving as quickly as possible, and with over 7,000 transportation projects approved, we are proud of that effort,” she said.
There are various ways of measuring stimulus spending. The Obama administration says it prefers judging by the amount of money obligated because that covers projects under way, which is the point at which a jobs-producing project can begin.
But even using the amount of money actually paid out, the pace of spending has slowed in recent weeks. The weekly average over the past four weeks is $3.2 billion, while the average for the previous four months was $3.6 billion per week, with a high of $9.4 billion paid out in the first week of May.
The Agriculture Department has boosted spending 11.9 percent in the most recent data. The Interior Department, the Homeland Security Department and the U.S. Agency for International Development also have made major jumps in spending obligations.
The Health and Human Services and Education departments, which have larger budgets, have made only modest increases in spending in the past several weeks. Neither has reported more than a 1.5 percent jump on a week-to-week basis since big jumps in early July.
The Transportation Department has increased spending steadily between 2 percent and 5 percent since that time.
Economists say the economy appears to be recovering without much help from the $787 billion spending package.
“In my view, the recession is coming to an end. The bad news, however, is that the government stimulus did not have a lot to do with the recovery,” said Barry P. Bosworth, a senior fellow in economic studies at the Brookings Institution.
Joining him on a panel discussion at Brookings, Chris Zimmerman, a member of the Arlington County Board, said the money to local governments is being siphoned through the states, which slows the process. Until that formula changes, he said, the flow of money will continue to lag.
Ms. Paige at Citizens Against Government Waste said the silver lining to the slower spending is that it could mean the government decides to forgo spending hundreds of billions of dollars still in the pipeline.
© Copyright 2014 The Washington Times, LLC. Click here for reprint permission.
About the Author
Stephen Dinan can be reached at firstname.lastname@example.org.
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