Six Months of Stimulus: What We’ve Learned
The American Recovery and Reinvestment Act celebrated its six-month anniversary this week, and supporters and detractors alike lined up to offer their verdicts. “The Recovery Act is already paying dividends for workers, families, and small businesses,” said Democratic House Speaker Nancy Pelosi. “By any objective standard, the Democrats’ trillion-dollar ‘stimulus’ isn’t working,” countered House Republican Leader John Boehner.
Well, which is it—resounding success or colossal failure? It’s too soon to tell, of course. Unemployment could keep falling, or climb again. Growth, if it comes, could be tepid. And as more money starts to flow in the fall and spring, inflation could spike – or not. Moreover, we’ll never know for sure what would have happened without the stimulus — or with a different mix of spending and tax cuts.
But there is much we do know. ProPublica looks back at six months of stimulus coverage and finds a mixed record on three key aspects of the package: how wisely the money has been spent; how many jobs have been created (and whether we’ll ever know for certain); and how well the government has met its own pledge of transparency.
You spent it on what?
Apparently it’s hard to spend three-quarters of a trillion dollars without some of the money going toward questionable-sounding projects. However, as ProPublica found over the past six months, some projects seemed silly only until closer inspection; for other projects, the reverse was true.
Two weeks after the stimulus passed, Louisiana Gov. Bobby Jindal said the plan was “larded with wasteful spending,” citing a magnetic levitation train to Disneyland and $140 million for “something called volcano monitoring.” As ProPublica reported, the fantastic-sounding train was a fancy way of describing high-speed rail in California, while volcano monitoring referred to funding for the U.S. Geological Survey for construction and repair projects, including volcano monitoring systems.
In March, ProPublica reported that stimulus money would be spent on new skylights for a state-run liquor warehouse in Montana. But wait: The money was part of an energy-conservation program, and the new skylights would save the state money on the cost of running the building. Some projects may have deserved snickers: Stimulus money also went to 22 concrete toilets at the Mark Twain National Forest in Missouri, new vinyl walls for restrooms in Rose Lodge, Oregon, and renovated bathrooms at the McConnell Air Force Base in Kansas.
In May, Republican Sen. Tom Coburn joined the fray, releasing a list (PDF) of 100 stimulus projects that he called “questionable.” Among the highlights: a guardrail for a dry reservoir in Oklahoma, a homeless grant for a New York suburb with no homeless, and an underpass for turtles in Florida. It also noted that we highlighted a report that the Social Security Administration sent 10,000 checks to dead people. The administration responded that the report was full of inaccuracies.
Some projects merited more serious concern. Also in May, ProPublica co-published a story with USA Today, reporting that $5 billion in stimulus funds for weatherizing homes was going disproportionately to cold states. For every dollar given to warm-weather states, the coldest states got three dollars. However, as a spokesman for the Florida Department of Community Affairs noted, “The heat is just as dangerous as the cold.”
More questionable spending followed. In July, ProPublica, together with CBS News, reported that more than $100 million in stimulus funds was going to airports with fewer than one flight an hour, while the country’s busiest airports had received no stimulus money at all. A month later, the Department of Transportation’s inspector general questioned funding for low-priority airports, calling on the Federal Aviation Administration to withhold grant money for the projects until it can justify their economic merit, and urging a full audit of stimulus airport grants. (The deputy transportation secretary responded (PDF) by defending the grants.)
How many jobs did you say?
One of the administration’s key arguments for a stimulus was the pledge that it would save or create more than 3 million jobs. Before the act was passed, ProPublica reported that predicting the number of jobs created or saved was a matter of economic guesswork. As the stimulus unfolded, it became clear that even after the fact, measuring the number of jobs created or saved was guesswork, too.
In March, the Congressional Budget Office released its own estimate of jobs under the stimulus—though, with a range of anywhere from 1.2 million to 3.6 million jobs created or saved, it could hardly be called a daring estimate. Two weeks later, Earl Devaney, chairman of the Recovery Accountability and Transparency Board (or RAT board), weighed in, saying the job numbers reported on the government’s stimulus Web site, Recovery.gov, had gotten him “very nervous.” He said the difficulty of defining a saved or created job was a concern.
Devaney’s worries were prescient. In a late-April news conference, President Obama said the stimulus had already created or saved more than 150,000 jobs. Where did he get that number? It turned out the answer was … guesswork: The administration simply prorated its earlier 3 to 4 million jobs estimate. In May, the president’s Council of Economic Advisers released a report sticking to the original job predictions, but adding that accurate numbers would be hard to nail down.
No kidding. In June, the administration announced its formula for counting jobs created or saved: For each worker paid by stimulus dollars, divide the number of hours worked by the number of work hours in a regular schedule — something called the Full-Time Equivalent standard. Congress proceeded to ignore the instructions. At the end of July, the House Committee on Transportation and Infrastructure announced that the stimulus had created or saved more than 48,000 highway and transit jobs. However, as ProPublica reported, that number came from the equivalent of a head count at stimulus work sites — a method the White House Office of Management and Budget says leads to double-, triple- or even quadruple-counting of jobs. Using the FTE approach prescribed by the administration, 48,000 became less than 10,000.
Earlier this month, the administration got a temporary reprieve from questions about job creation, when the Bureau of Labor Statistics announced a slight drop in the unemployment rate in July, to 9.4 percent from 9.5 percent the month before. But the real test for President Obama will come in October, when recipients of stimulus dollars report the numbers of jobs they’ve created. And as ProPublica reported this week, even those numbers are likely to carry a whiff of uncertainty.
Follow the money—if you can
The Recovery Act isn’t only one of the largest bills of its kind in American history; it was also billed as an attempt to set a new standard for transparency in government spending. The president’s signature on the act had barely dried when the government launched Recovery.gov, meant to be the definitive government hub for tracking stimulus dollars. A week later, Devaney, a celebrated inspector general at the Department of the Interior, was tapped to head the Recovery Accountability and Transparency Board, the independent agency created by Congress to oversee Recovery.gov and coordinate efforts to crack down on stimulus fraud.
Some things are easier said than done. ProPublica began raising questions early on about exactly how well the government would be able to live up to its promise of transparency. Among the concerns was the fact that states were only due to report their stimulus spending every three months, as well as the fact that the reporting chain wouldn’t necessarily follow the money all the way to the contractor or sub-contractor level. By the beginning of March, a number of states had launched stimulus Web sites of their own—some of which were better than others.
To give the government a hand tracking those dollars, ProPublica launched a few tracking tools of its own. In March, we introduced an interactive graphic comparing how much residents of each state stood to gain from the tax measures in the stimulus. In May, we went a step further, launching Adopt a Stimulus Project, a citizen-reporting initiative from Amanda Michel, ProPublica’s editor of distributed reporting. In July, we launched StimCities, tracking the change in the economy in eight cities. Earlier this month, we launched our Stimulus Progress Bar, complete with language that actual humans speak. And we introduced our Recovery Tracker, which lets you search for stimulus projects in your area.
In the meantime, problems appeared with Recovery.gov. By April 1, the site still had no details on how stimulus money was being spent or who was getting it—shortcomings that were compounded by formatting irregularities, technical jargon and time lags in posting information. Then, on April 8, a key date was moved back: The Office of Management and Budget, which calls the shots on stimulus rules, pushed back the deadline for stimulus recipients to report how they spend the money, from July to October. The OMB said states and other recipients needed more time to report their information to Recovery.gov. Federal agencies, too, needed time to work the kinks out: In May, the Labor Department corrected an overstatement of $10.4 billion in its stimulus spending.
It turned out that Recovery.gov needed more time itself. Although the site added new features through the spring, glitches remained, including discrepancies between the numbers on Recovery.gov and on federal agencies’ own Web sites. The Recovery Board turned for help to a company called Smartronix, which got a contract to build a “Recovery.gov 2.0” for as much as $18 million. The one catch? When ProPublica filed a request under the Freedom of Information Act to see a copy of the contract, what we got was a bundle of redactions. Questions remain about who ensures data quality, a key problem with earlier attempts at transparency. Like so much of the stimulus, it seems, the push for transparency is a work in progress.
Officials have struggled to spend the nearly $800 billion stimulus package quickly and effectively.