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Stimulus Projects Bypass Hard-Hit States

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posted on May, 28 2009 @ 07:56 AM
Looks as if the 'stimulus' money isn't quite doing it's job.

Stimulus projects bypass hard-hit states

WASHINGTON — States hit hardest by the recession received only a few of the government's first stimulus contracts, even though the glut of new federal spending was meant to target places where the economic pain has been particularly severe.

Nationwide, federal agencies have awarded nearly $4 billion in contracts to help jump-start the economy since President Obama signed the massive stimulus package in February. But, with few exceptions, that money has not reached states where the unemployment rate is highest, according to a USA TODAY review of contracts disclosed through the Federal Procurement Data System.

In Michigan, for example — where years of economic tumult and a collapsing domestic auto industry have produced the nation's worst unemployment rate — federal agencies have spent about $2 million on stimulus contracts, or 21 cents per person. In Oregon, where unemployment is almost as high, they have spent $2.12 per capita, far less than the nationwide average of nearly $13.

That money "is needed nowhere more than it is needed in Michigan," says Leslee Fritz, a spokeswoman for the Michigan Economic Recovery Office, which is coordinating stimulus efforts in that state. She said officials are generally satisfied with the pace of federal aid, but added, "We certainly feel very intensely the need to move quickly."

The $787 billion recovery package was intended to help turn around the economy using federal money to create jobs, especially in places where the recession has taken the most severe toll. Most of that money goes directly to states to pay for work such as highway repairs, but federal agencies also will spend billions of dollars to do everything from fixing runways and improving national forests to cleaning up nuclear waste.

The first waves of that money flowed unevenly in large part because some federal agencies have moved more swiftly than others to sign contracts for projects funded by the stimulus. In many cases, those first contracts went to projects that began years ago or to companies that have long track records of doing government work.

For example, about $3 billion of the government's first contracts were to speed cleanup of some of the nation's worst nuclear waste sites, scattered over a handful of states. That has created hundreds of additional jobs at the companies that manage the sites, says Matt Rogers, a senior adviser to Energy Secretary Steven Chu, but the impact has been limited to only a few parts of the country.

Liz Oxhorn, a spokeswoman for the White House stimulus effort, said any examination of federal contracts provides "an incomplete picture" of a law that is "providing unprecedented assistance at a record pace to benefit as many Americans as possible." Obama said Wednesday that the stimulus had created or saved 150,000 jobs in its first 100 days. Overall, however, the economy shed more than 1.2 million jobs in March and April, according to the U.S. Bureau of Labor Statistics.

In addition to the contracts it has awarded, the government has asked companies to bid on thousands of additional projects worth upward of $30 billion, according to Onvia, a firm that tracks government purchasing.

Even so, the first contracts have amounted to only about $7.42 per person on average in the eight states with unemployment rates higher than 10% last month. By comparison, government records show it has awarded about $26 worth of contracts per person in North Dakota, whose unemployment rate is the nation's lowest.


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