If the Check is In the Mail, Has the Money Been Spent?

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If the Check is In the Mail, Has the Money Been Spent?

If the Check is In the Mail, Has the Money Been Spent?

Wednesday, June 23rd, 2010 - 5:32
By: 
Katherine Barrett and Richard Greene
Wednesday, June 23, 2010 - 05:31
The press and blogs are full of items talking about how scary things are now that the stimulus dollars have been overwhelmingly spent. Not so fast.

 

Multiple choice. Let’s say you’re spending $500 on a new television. Is that money spent: a) When you decide to buy the TV b) When you line up to pay for it c) When you hand over your credit card? D) When you get your credit card bill E) When you pay your credit card bill or F) When your check clears.
An interesting question, we think. And it bears a strong similarity to one of the great confusions we see in the press about the Stimulus Act. From our reading of press and blog coverage, lots of people talk about stimulus money having dried up, long before it’s actually been spent. Typical was the Evansville Courier & Press, which reported about a week ago that "The clock is ticking louder in the ears of state leaders who know that federal stimulus dollars have run dry."
The parallel between our television set purchase and Recovery Act dollars is pretty straightforward. When do you say the money has been used? When the decision is made to spend it? When it's allocated from one branch of government to another? When the contract is signed? When the work starts? When the transfer of dollars takes place or when those dollars actually reach the pocket of someone whose Recovery Act job has been funded through this long pipeline? As we pointed out in our post about Head Start on June 8th, 90 percent of the money had been allocated as of March 31, but only 10 percent of the first year money had been drawn down.
There's another issue as well. While the "funding cliff' looms in front of states for Medicaid and education dollars, there's a lot of investment oriented spending going forward in the transportation, community development, energy and environmental areas. As the Government Accountability Officed pointed out in its May report, in 2010, about twice as much state and local Recovery Act funding will be laid out as in 2009 ($103 billion compared to 52.9 billion.)
In Vice President Biden's press briefing last week, he compared stimulus activity last summer and this summer for a variety of areas:
 
  • Last summer there were 1,750 highway projects underway. This summer, he says "we'll be starting 10,000 projects.
  • Last summer, 3,000 homes were weatherized. By the end of the summer, the VP says "We'll have weatherized 82,000 additional homes.
  • Last summer, 100 clean water and drinking water projects were launched. This summer,  "we will have underway 3,000 additional clean water projects."
There will still be $63 billion spent in 2011 and another $61.9 billion that will go to state and local governments between 2012 and 2019. In other words, for anyone in the business of toting up the results of the Recovery Act, many of the results are still to come.
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