Stimulus Funds Missing Poorest Areas

Many States Using Money Just to Stay Afloat, House Committee Finds

(CBS/AP)  Projects in some of the nation's poorest areas don't appear to be getting a fair shake in the spending of $787 billion in stimulus funds, the chairman of the House oversight committee said Wednesday.

Rep. Edolphus Towns, D-N.Y., chairman of the panel, said he was particularly concerned that transportation projects in economically distressed areas were being left out - even though they are supposed to be a priority.

"There is a substantial variation among states as to what constitutes an economically distressed area," Towns said. "For this reason, it is unclear whether Recovery Act funds are going where they are needed most."

The stimulus bill was constructed with jobs in mind, but since the president signed it into law in February, the nation has lost another 2 million jobs, pushing unemployment to its highest rate in half a century, reports CBS News correspondent Nancy Cordes.

A trio of governors told Congress that the real challenge has been obtaining stimulus funds fast enough to put people back to work.

According to Recovery.gov - the Web site the administration set up to track stimulus spending - only 10 percent, or $56 billion of the available funds have made it out the door so far.

"The federal agencies have to receive bids for contracts, then they have to analyze those bids, and then they have to write checks to those, to the people that won the bids - and that all takes time," Craig Jennings of OMB Watch told Cordes.

Towns' comments came in response to a Government Accountability Office report (PDF) released Wednesday at a hearing before his committee.

The GAO said about half the money set aside for road and bridge repairs is being used to repave highways rather than to build new infrastructure. And state officials aren't steering the money toward counties that need jobs the most, auditors found.

The Obama administration intended for the stimulus to jump-start the economy, build new schools and usher in an era of education reform. But government auditors said many states are setting aside grand plans to stay afloat.

The GAO said the stimulus is keeping teachers off the unemployment lines, helping states make greater Medicaid payments and providing a desperately needed cushion to state budgets.

But investigators found repeated examples in which, either out of desperation or convenience, states favored short-term spending over long-term efforts such as education reform.

In Flint, Mich., for example, new schools haven't been built in 30 years but the school superintendent told auditors she would use federal money to cope with budget deficits rather than building new schools or paying for early childhood education.

The 400-page stimulus plan includes provisions for long-term growth, such as high-speed rail and energy efficiency, but their effects will be seen later.

Since Obama signed the stimulus bill in February, the economy has shed more than 2 million jobs. Unemployment now stands at 9.5 percent.

Recovery.gov does not say how created by seemingly misdirected projects like building a bike path in Denver or expanding the hybrid bus fleet in Chicago, because stimulus fund recipients won't have to start reporting those figures until October, Cordes reports.

"It's definitely too premature to say whether or not the recovery act is working," Jennings said.

Robert L. Nabors II, deputy director of the Office of Management and Budget, testified that 150,000 jobs had been created from stimulus spending. With the stimulus spending, he said, the nation is moving down the right path.

"We are making progress, but we still have a long way to go," Nabors said.

The 150,000 figure comes from a formula that White House economists acknowledge was never intended to be used to count jobs. The figure is so murky, it cannot be verified.

Some democrats are calling for a second stimulus.

They say the money spent to backfill state budgets has saved teaching jobs, covered Medicaid payments, boosted unemployment benefits and increased funding for food stamps - now used by a record 34 million Americans to buy groceries.

But republicans in congress who almost uniformly opposed the first stimulus package are dead set against a second. And the white house is not eager to fight that battle again.

[perfectlyaged]

I am in favor of using the remainder of the money in the stimulus package to pay off China (didn't we borrow from them or did they decide not to loan it to us) and save $600 billion a year that it takes to service the debt. We don't even have the money to pay the interest...they say we are going to borrow to pay interest due on loans.
And Barney Franks wants to use the dividends earned on the government-owned stock(taxpayer's money)in the ailing banks to pay off repo's in the housing industry.

[billpl-2009]

"Projects in some of the nation's poorest areas don't appear to be getting a fair shake in the spending of $787 billion in stimulus funds,"

That's because it's a "Stimulus" program, not a "Welfare" program.

DUH!

[starleo146]

Do You remember the day all the governors came to Washington and was told to use this money wisely pacifically save jobs, . To put this money at the spots most needed and would get the most jobs out the first installment. There is more money coming but what did your governor do to save a job. You can blame Obama but when the dots are connected we will see how much they get next time

[starleo146]

Do You remember the day all the governors came to Washington and was told to use this money wisely pacifically save jobs, . To put this money at the spots most needed and would get the most jobs out the first installment. There is more money coming but what did your governor do to save a job. You can blame Obama but when the dots are connected we will see how much they get next time

[Knyssth]

It's funny to see the Democrats blame the Republicans and the Republicans blame the Democrats. Those are just two heads of the same party. There is only one party in our two party system, so don't expect change. The present useless imbecile sitting in the president's office is just another brain dead treasonous idiotic puppet controlled by the same people responsible for the last 12 or more imbecilic idiots to "hold" the office. Until we eject ALL of the democrats and republicans and ban not only both parties, but ban any current member of either party from ever holding public office, we will accomplish nothing.
.
Dems blaming Repubs and vice versa is nothing but the pot calling the kettle black. Until American citizens can hold office, we will only have the lowest criminals in the world to choose from. From now on, if it wears a suit - it's garbage and I refuse to vote for garbage anymore.

[fedman2]

As someone who has responsibility for distributing some of the stimulus money, it is not as simple as writing a check. Regulations have to be drafted, a notice has to be issued and in my case proposals of uses of funds have to be submitted by states and localities. These then have to be reviewed and approved to ensure they are in line with the purposes of the stimulus. This is why only 11% has gone out so far. As someone who knows I can tell you that getting the stimulus funds out the door is a top priority of the federal government. The money should start flowing soon and then many more will benefit. As they said on the newscast today, patience is the watchword. Reserve judgement for a few months. It is the problem with our society today that we expect quick solutions to all problems, but reality doesn't work that way.

[speakinup22]

Another failure by the Democratic run House of Reps, Senate and Presidency to word their funding such that it would be used for the intended purposes.

Kinda reminds you of the Funds Barry had to get into law right away, so there was no time to read the 1000 page document in the 24 hours given. And then the Banks refused to use the money as planned. And the CEOs flew their planes anyway, and the top 1% of mangement made their huge amounts of money - beacuse the President needed it into law right away. Not happy with Congress ?

THROW THE BUMS OUT !!!!!

[gold_standard]

$787,000,000,000 for 150,000 jobs works out to $5,246,000 per job created.

Just write me a check for a mere $1,000,000 and I would be happy.

[antoniof123]

Lets look at it like this the GOP stimulas was 700,000,000,000 and no jobs saved 968 exectives that works out to 723,140,495.87 still want the check for 1,000,000,000 how about them apples.

Wow, you throw stones and they come back at you with a lot more weight don't they.

[speakinup22]

antoniof123 - guess who had power in congress when that bill was forwarded to the President ?

Sheese, what an idiot. How quickly these liberals forget !

[ToolMangler1]

That could be done, but what would we have afterward,

(1) A country in which no one needs to work.

(2) within one month, ten percent of the powergrid will not be producing elctricity.

(3) three months and the stores will be empty.

(4) Four months and those that still have some money left will leave the Nation and settle else where things are still working..

(5) One year later and the Mexicans will have re-entered the land and taken over.

So much for a nation of Rich Folks, That nearly happened this past year, but the bubble burst before they were able to do the handout.
The Chinese can do that and buy America out from under us if they want to. There aint no such thing as a free lunch! "TANSTAAFL"

[cdegolier]

by ibsteve2u July 8, 2009 12:02 PM PDT
All I know is the modern Republican Party is the most catastrophic blow this nation has ever suffered; compared to them, the Democrats are angels acting with the hand of God.

So all I can advise is that we vote every single Republican out of office as a first step, and then focus on weeding the bad Democrats out.

It is a multi-year effort, but we are in the grip of a multi-decade and nearly completely successful Republican plan to crush America's middle class and working poor, who they consider to be either labor/"human resources" or merely "entitlement spending" when they are not profiting from our utilization.

Comical, very comical. You do forget it is the dems who have taxed us to death, the dems who currently want to tax health benefits to pay for their trillion plus healthcare plan that won't cover even half of those without, the dems who are pushing cap and trade, which is the largest tax increase in history, the dems who want to tax sugary drinks and add a 3% national sales tax. Don't forget it was the dems and mainly barney frank who where against regulation of fannie and freddie, the dems who thought every idiot out there should own a home. Republicans work for their money and believe the rest of the country should also.

[speakinup22]

" and then focus on weeding the bad Democrats out. - ibesteve2u

You mean all Democrats then, right ?

[ibsteve2u]

"But government auditors said many states are setting aside grand plans to stay afloat."

The sad fact is that it took 30 years of the Republican policies of trickle down economics and inequitable free trade to break America's economic spine; a near-mortal wound consisting of the crushing of the production side of our production/consumption economy.

Consider the fact that building the industrial and consumer manufacturing sector of this nation took from 1940 to 1980, the year the Republican assault upon America's middle class and working poor began.

Then there were additional years of growth in technology manufacturing and technology services, which did not begin to succumb to inequitable free trade until the end of the 1990s.

So in total, that is 60 years to build an economy that sustained the vast majority of Americans overlaid with 30 years of Republican efforts to divert the wealth that economy was generating to themselves.

Demanding that ANYBODY (well, with the possible exception of Merlin or God) to fix the damage the Republicans have caused in only six months is a sign of either an immature mind that demands immediate gratification, sheer stupidity, or a Republican.

And the latter characteristic is a combination of the preceding two characteristics.

[newerdeal]

I have HOPE ! ! ! I think he is a smart person and could get the USA economy going if he would come home and try ! 1/8 of his time is gone and he is slipping in the polls. He is running out of time to change things fast ! ! !

[ibsteve2u]

Bringing up Soros and his profiting from this Republican-induced economic collapse is totally bogus.

Had I the seed money, I too would have made massive....MASSIVE...profits from my investments, because the end result of decade after decade of successful Republican attacks upon America's middle class and working poor - which were driven by the common Republican desire to increase their own wealth and the future of America be damned - were entirely predictable.

[cdegolier]

The meltdown began with the lending industry, fannie and freddie, the two that Bush in 2004 wanted to regulate, barney frank and the other dems said it wasn't necessary, not enough votes, it went nowhere, don't blame Bush, blame the dems they were the ones forcing people into loans they couldn't afford and apparently couldn't read. Then add the decades of dems pushing welfare down peoples throats, God forbid you teach you people anything but holding their hand out.

[speakinup22]

"Had I the seed money, I too would have made massive.... MASSIVE... profits from my investments - Ibesteve2u

What ? Don't you work ? That is how most of us got our "seed money".

Spit in one hand and wish in the other - see which fills first.

[ToolMangler1]

by speakinup22 July 8, 2009 2:41 PM PDT
"Had I the seed money, I too would have made massive.... MASSIVE... profits from my investments - Ibesteve2u
What ? Don't you work ? That is how most of us got our "seed money".
Spit in one hand and wish in the other - see which fills first.


To 'ibsteve2u' well said and pretty accurate.

To 'speakinup22' He isn't speaking of any 'seed' money that can be found in a normal 'house-hold' budget. And 'I' never carry that much money around with me. ;)

[Joe_NY_15]

by bajajohn1 July 8, 2009 11:32 AM PDT
The article states the money is being used by the states to remain economically viable. Are the states not being 'stimulated" by the released money. Yes, states are composed of American people. Now, the real question begs for an answer; Why is the stimulus money so slow in being released? Who is holding up the 85% budgeted in the stimulus package?
____________________________

Good question.....but don't look to blame the Republicans for holding up the stimulus....don't forget most projects are not until 2010-2011.....so much for "stimulation" of the economy

John, just admit it, the stimulus was a big waste of money and it went to pet projects in the Democrat leader's districts, stimulating nothing.

[newerdeal]

President Obama needs to get back to Washington and get to work. He needs to focus on getting the USA economy going.

How can he change Washington when he is not there ? I bet he spends more time in Air Force 1 than he does in Washington.

President Obama get back to Washington and get to work ! ! ! Focus ! ! !

Those people you are leaving in charge are a bunch of goof offs ! ! !

We hired you to change Washington ! ! ! Do it ! ! !

[hawksprings]

newerdeal,
You're still living in Never Never Land, aren't you.

[pw08-2009]

That's the case in California too. We are now at or near the top in taxation, yet, it isn't enough money that our leadership needs because they want to spend, spend, spend...Our state hires a new worker, something like one every two minutes, everyday, every year for at least the past 10 years. YET, the unions are unwilling to allow our state's cubicle workers to suffer layoffs like every other private enterprise in the US. So, this stimulus for transportation will come in handy to feed the Union's appetite...at least for now...

[ToolMangler1]

"Stimulus Funds Missing Poorest Areas
Many States Using Money Just to Stay Afloat, House Committee Finds"



SO!!!! Whats new about that??? (Not you pw08-2009 )