GAO: Some states aren’t using all their stimulus cash to create jobs

What a surprise (not):

WASHINGTON — Under pressure to spend stimulus money quickly, many states are using the federal funds for short-term projects and to fill budget gaps rather than spending on long-term improvements, according to a report by congressional investigators.

The report, scheduled to be released Tuesday by the Government Accountability Office (GAO) at a House oversight hearing, also says many states aren’t meeting some goals and requirements of the economic recovery program. Some states, for example, are not sending transportation funding to the most economically distressed areas, and they are using education funds to prevent layoffs rather than fund innovative new programs, the report says.

As required by the $787 billion stimulus law, the GAO is monitoring stimulus spending in 16 states and the District of Columbia that will receive two-thirds of the federal funds. It reports to Congress every two months.

The report says that as of mid-June, states had received about $29 billion of the estimated $49 billion in stimulus funding they are scheduled to get before the federal budget year ends Sept. 30. More than 90% of the money given to the states so far is for Medicaid and a fund meant to prop up states’ budgets for schools and other basic services such as public safety.


The stimulus law requires states to give priority to transportation projects in economically distressed areas. But because states needed to choose projects quickly, many either didn’t consider distressed areas until late in the planning process or used their own criteria rather than the federal requirements, the GAO found.

For example, 21 Illinois counties identified as economically distressed “would not have been so classified following the act’s criteria,” the report says.

And speaking of distressed, this report certainly distresses me, even though it’s not exactly surprising, considering how the Obama administration got away with lying to the American people about how the stimulus plan was “earmark free” when in actuality there were billions of dollars in the bill for the states that had nothing to do with helping to create jobs.

Senator Tom Coburn, a fiscally responsible conservative Republican who has been hammering the Obama administration on the stimulus bill from the start, got it right several months ago:

One of the more egregious provisions in the Senate bill is a $166 billion bailout plan for the states that rewards bad budgeting at the state level. Simply sending cash to states without asking for appropriate sacrifices is grossly irresponsible. States will no longer have the incentive to live within their means, because they’ll assume the federal government will be there to bail them out.

No wonder it had to be passed “right away” with not one second to spare. A show of hands at how many think the administration will hold accountable the states who have used this money for items in their respective budgets that had nothing to do with stimulating the economy via job creation?

That’s what I thought.

Oh – and the news just gets better:

When Vice President Joe Biden announced a new $3.3 billion grant program to upgrade the nation’s electricity network, the rationale was simple: “This is jobs — jobs,” he said in April.

But the Obama administration is now saying it will not take the potential for job creation into account in “rating” proposed projects for possible funding — after initially saying that would be a primary consideration.

In April, when the Energy Department first announced regulations for companies that wish to apply for “Smart Grid Investment Grants,” “job creation and retention” was among the explicit criteria.

“Projects will be evaluated based on the extent to which they create and retain jobs,” the Energy Department wrote in its official “Notice of Intent” for the grant program.

Other criteria included “project approach and feasibility” and “project impact.”

But late last month, the department quietly modified the criteria to take the job piece out. As the department explained in a June 26 set of Frequently Asked Questions:

“These criteria differ significantly from those presented within the [Notice of Intent]. First, DOE removed the criterion on the extent of jobs creation and now will require applicants, as stipulated within the Recovery Act, to report quarterly on the number of jobs created and retained.”

In a question-and-answer section written to help applicants understand the process, the document continues: “Will DOE use the number of jobs estimated to be created and/or retained as a criterion for rating a proposal for funding?”

“No. Although job creation is not included in the technical criteria used to rate proposals, it plays an important role throughout the grant process, and grant recipients are required to submit the numbers of jobs created and retained in their quarterly reports to DOE and to”

It’s no surprise why some Democrats are not opposed to the idea of a second stimulus package, citing the “the first one was not enough” excuse.. Think they’ll read a potential second stimulus bill any more so than they did the first? Don’t count on it. In fact, House Majority Leader Steny Hoyer laughed yesterday at the suggestion that House members would read the ObamaCare bill in its entirety before they decided on whether or not to vote in favor of it.

How many more lies will this administration and the Democrats in Congress tell about how much (more) money we need to spend in order to “speed up the process” of “getting people back to work” (and a myriad of other “burning issues”) before Americans finally wake the hell up?

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