By “Honored-&-Humbled” Peace & Love w/o Borders - Aug 14, 2010 7:47:47 PM ET
As Americans puzzle over why the economic stimulus package enacted more than a year ago has failed to restore vigorous job growth, one explanation has emerged from new reports: A lot of the money is not yet out the door.
Detroit is struggling with 14 percent unemployment, but as of June 30 the city had spent less than 1 percent of the $8.8 million in stimulus funds it received for energy-efficiency initiatives. In budget-strapped Arizona, Phoenix has spent even less of its $15.2 million, and in hard-hit South Florida, Fort Lauderdale has spent $66,000 of its $2 million.
The $862 billion package was divided roughly in thirds among tax cuts, aid to states and the unemployed, and investments in infrastructure, health care and other areas. The first two have delivered most of their boost, but much of the investment spending is moving far more slowly. At the end of July, nearly 18 months after the stimulus passed, more than half of the $275 billion in investments had yet to be spent.
Underlying the slow pace is a defining tension: Officials want to get money out the door to jolt the economy but want to spend it carefully enough to meet long-term policy aims -- and avoid headlines about waste or fraud.
"This is federal money we are stewards of, and we have to make sure we're spending it well," said Eric Coffman, senior energy planner for Montgomery County. By the end of June, the county had spent none of its $7.6 million in energy-efficiency funds. "Spending fast is not the only thing in the world. We want to make sure we get results."
Administration officials say the stimulus remains on schedule, with 70 percent expected to be spent by Sept. 30. And some economists note that the sluggish economy will still need a boost until 2012, the deadline for spending most stimulus cash.
"Some stuff is taking a longer time to have an impact, but we still have over 9 percent unemployment," said John Irons of the Economic Policy Institute. "The fact that we still have dollars coming on line now should not be seen as a negative."
Many of the unspent funds lie in programs portrayed from the outset as true long-term investments, such as $8 billion for high-speed rail, $17 billion for health information technology and $10 billion for the National Institutes of Health. But other programs that had been viewed as quicker job-generators are also taking a while to get rolling.
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After waiting for Energy Department guidelines last year, state and local officials spent months deciding how to use their funding. They opted for a mix of retrofits of public buildings; installation of low-energy streetlights and traffic lights; rebates for solar installations or insulation upgrades by residents and businesses; and workforce development....
Now that the Energy Department has approved most plans, cities and states must still put projects out to bid and draft agreements with local partners. Matt Rogers, who is overseeing the Energy Department's stimulus spending, said he hoped monthly spending by both the state and city programs would soon reach $100 million, up from $60 million in July. Local officials also promised a surge.
"The good news is that there will be a lot of spending in September. You'll see money being spent in big chunks," said Matt Groff, who is managing Prince William's grant. "Although it's taken a little while to get off the ground, there'll be less mistakes than there could've been if they were quick to approve early on."
Washington Post article
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