It’s Official: The Stimulus Isn’t a Waste of Money

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Oct 4th 2010 - by Fix My PC FREE in: News | 0 Comment

A sign promoting one of the Obama Administration’s economic-stimulus-package projects stands in Wilmington, Ohio

Jay LaPrete / Bloomberg / Getty Images

People of good faith can disagree over whether President Obama’s $787 billion stimulus package is creating enough jobs, piling on too much debt or helping the country in the long run. but it’s about time to retire one set of critiques of the stimulus: that it would be riddled with fraud, hamstrung by delays and crippled by cost overruns. so far, while the American Recovery and Reinvestment Act is clearly not a political success, it is just as clearly a managerial success — on schedule, under budget and, according to independent investigators, remarkably free of fraud.

on Sept. 30, the Administration met its self-imposed deadline of spending 70% of the Recovery Act funds, $551 billion, by the end of the fiscal year. almost all of the unspent stimulus money is already committed to specific projects, except for a few longer-range initiatives like high-speed rail and electronic health records. And the completed work has cost less than expected, so the savings have financed more than 3,000 additional projects, from airport improvements in Atlanta to new child-care centers at military bases in Louisiana, North Carolina, Mississippi and Oklahoma, from a new five-lane road in Jacksonville, Fla., to a $14.5 million transformation of a World War II ammunition factory into an eco-friendly government building in St. Louis. (See TIME’s special report “After One Year, a Stimulus Report Card.”)

Earl Devaney, the hard-nosed watchdog leading the independent Recovery Accountability and Transparency Board, recently testified to Congress that investigators “simply haven’t seen the kind of fraud that we would have imagined as professional law enforcement.” Before the stimulus passed, experts predicted the government would lose 5% to 7% of it to fraud; today, out of more than 190,000 contracts, grants and loans, fewer than 0.2% are under investigation. the board is using newfangled computer algorithms that can track suspicious spending patterns before there’s a complaint; the inspectors general of every major agency are bird-dogging the stimulus as well. Devaney likes to say that if you really want to steal, you’d be crazy to steal from the Recovery Act; it’s far too transparent, with every dollar traceable at recovery.gov, and there are far too many eyes on it.

that transparency has sometimes carried a political price. For example, innocuous reporting errors on the website quickly became national news about stimulus money supposedly being funneled to phantom congressional districts. at the same time, GOP Senators Tom Coburn and John McCain have targeted a slew of Recovery Act projects they consider wasteful; although some waste is in the eye of the beholder, it’s probably safe to assume that the $762,000 for interactive dance software and the $18,500 to paint a mural on a Montana band shell could be better spent elsewhere. And Devaney’s staff has identified several ineligible contract recipients, leading to the cancellation of at least $18 million worth of grants. (See how the stimulus is changing America.)

but those are pretty small dents on a $787 billion chassis. In the words of Vice President Joe Biden, the Administration’s point man on the stimulus, fraud has been “the dog that hasn’t barked.” at the same time, concerns that excessive vigilance against fraud would slow the pace of spending don’t seem to have panned out either.

“There were a lot of dire predictions, but we’ve found ways to make them not come true,” says Ed DeSeve, who oversees the stimulus out of Biden’s office. “It wasn’t fate or kismet. it was the actions of lots and lots of people.”

it was the hard-driving, motormouthed Vice President who set the tone, promising state and local officials that all their stimulus-related questions would be answered within 24 hours, harassing Cabinet Secretaries to get their money out the door, pestering his staff to make sure nothing fishy slipped through the cracks, appearing at 56 Recovery Act events around the country. Biden talked incessantly about government becoming more responsive, more accountable, more effective. he personally blocked 260 projects that flunked his smell test, including a $120,000 Army Corps of Engineers plan to print brochures about a lake cleanup. “We said, Hey, man, no brochures, put it on a website,” Biden recalled in an interview this summer. “Stupid thing, but it saved that dollar amount.” (See the top 10 Joe Biden gaffes.)

another example of Biden’s responsiveness: last June, Republican Senator Pat Roberts of Kansas complained that stimulus money was about to fund a resurfacing of Highway 96 in Cherokee County, just in time for more stimulus money to fund a nearby Superfund cleanup requiring heavy trucks that would rip up the road again. the next day, Biden called the Department of Transportation: “I said, Hey, man, don’t pave the road before the project is finished with the heavy trucks. Flip it.” Roberts promptly thanked him on the Senate floor: “The White House moved in an expeditious fashion, and quite frankly, I didn’t expect they could move that fast.” (Comment on this story.)

It’s not that the implementation of the Recovery Act has been glitch-free. a $5 billion program to weatherize low-income homes got off to a dreadfully slow start. but the problems weren’t allowed to fester, and now the program is back on track. DeSeve holds conference calls with all the agencies twice a week, and Biden has demanded monthly reports on every project in his bailiwick; if anyone’s got a problem with that, he told the Cabinet, take it up with the President.

With unemployment still so high, the Administration’s successful oversight of the stimulus does have an otherwise-did-you-enjoy-the-play-Mrs.-Lincoln feel. the recovery remains tepid, so the Recovery Act remains unpopular. the White House says there would be 3 million more unemployed Americans without it, and many independent economists agree, but the “failed stimulus” has become a Republican symbol of everything wrong with Obama’s Washington. Even most Democrats — including the President himself — won’t utter the word stimulus in public anymore.

but so far: no indictments, no major scandals, no missed deadlines, no busted budgets. Hey, man: That’s more than good enough for government work.

Read “Obama’s next Economic Plan: Don’t Use the S Word!”

Watch the video “TIME Polls America: Spend or cut?”

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