Stimulus Aid Is Said to Be Moving Faster

Discussion in 'Economics' started by ASusilovic, Jul 11, 2009.

  1. WASHINGTON -- The Obama administration says it has been on a "learning curve" with the economic-stimulus package but has now figured out how to spend some of the available billions more quickly.

    Many tax cuts, which account for a third of the $787 billion package, have already taken effect. But only $60.4 billion of the remaining $499 billion has been spent. Most of the money was always likely to be spent this summer at the earliest as departments wrestled with the increased workload and new requirements imposed by the bill. The White House isn't changing its goal of spending 70% of the funds by September 2010.

    But amid worries about steep unemployment, the White House has been pressuring agencies to get some money out the door more quickly.

    "It was a learning curve and as we learned more we were able to accelerate more," said Ed DeSeve, a senior White House adviser.

    The Department of Education, for example, scrapped the idea of giving $8.8 billion of general aid to states in two phases and decided to send them all the money after their application was approved.

    The Department of Labor said it had distributed the bulk of its $38.5 billion in stimulus money within 30 days of the law's enactment, but that "it takes time" for states, in turn, to move the money.

    The White House told agencies to find ways to cut red tape, both for making large transfer payments to states and running big competitions for grants. Agencies were also instructed to work more closely with states to help them spend the money once they received it.

    Some agencies have indicated there isn't much more they can do. At the Commerce Department, a senior official said the time frame for a competition to give out about $4.7 billion in grants to build broadband networks had been condensed. But in an effort to make the money widely available, the department is deliberately staggering the pace at which it gives out the grants, giving more groups chances to apply. Another $1 billion of the agency's $7.9 billion will be spent next year for the 2010 Census.

    The Department of Defense, which is administering about $6.4 billion for repairs and construction at military facilities, responded to the White House's demand for speed by unveiling a more aggressive set of targets for projects it had planned: around $1.9 billion of activity to be under way by Labor Day.

    Speeding up the stimulus process is challenging even in areas such as transportation, with its longstanding funding programs and record of federal and state officials collaborating on spending decisions. Every state spelled out how it would spend at least half its share of roughly $27 billion of highway money by the end of June, but several factors, including weather, unexpectedly low bids and bureaucratic procedures, have kept much money bottled up.

    Several Republican lawmakers, led by Rep. John Mica (R., Fla.), protested the pace of spending on Friday, criticizing what they called excessive regulation. "Investments in infrastructure can create jobs, but the federal project process is so burdensome that money for good projects cannot get out fast enough," said Rep. Mica, the top Republican on the House Transportation and Infrastructure Committee.

    John Porcari, deputy secretary of transportation, said regulators are doing everything in their power to speed up the process, such as completing reviews concurrently rather than sequentially.

    Departments with more complicated processes for administering their funds have only been able to report modest achievements.

    The Department of Energy, for example, has struggled in the past with running big spending programs, but Matt Rogers, the agency's senior adviser on stimulus, said it was "pretty close to on track" to meet an aggressive set of deadlines for competitions to hand out most of its $45.2 billion.

    At Housing and Urban Development, 85% of the $13.6 billion being overseen by the agency will be available by September, but the agency can only pay out money after local organizations request reimbursement, or "draw down" funds, stimulus adviser Peter Grace said. "We're trying to encourage more timely draw downs…just so we can reflect reality here," he said, but added: "There's an administrative cost to that that we want to be sensitive to."
  2. ron2368


    Spending money is just plain hard work, exhausting.