Some would have liked last year’s stimulus spending to have been larger, perhaps $2 trillion instead of the $787 billion that Congress approved. Some would have liked it significantly smaller. And some didn’t want to see such government borrowing at all.
But what many are finding vexing — including those who voted for the stimulus, like Sen. Olympia Snowe — is that nearly 18 months later, some of the funds remain unspent.
The success of the American Recovery and Reinvestment Act, conceived to jump-start the economy, will be a matter of debate in this election year. But with signs that the recovery is stalling, it is more important than ever that the stimulus funds be spent.
Snowe, along with her Republican colleague, Sen. Susan Collins, voted in favor of ARRA, but Snowe has become exasperated in recent months to see other spending bills come to the Senate — which, if approved, add to the deficit — while unspent stimulus funds remain.
John Gentzel, the senator’s communications director, said she has sounded the refrain that the stimulus plan was based on “timely, temporary and targeted” spending. If there is unspent money, “they’ve accomplished none of those three goals of the stimulus bill,” he said.
According to the Wall Street Journal, the Obama administration has spent less than one-third of the $230 billion from the package targeted to big infrastructure projects.
ARRA was designed with three major components: $336 billion for tax breaks, $296 billion for unemployment benefits, food stamps and aid to states for education and Medicaid, and the $230 billion for infrastructure. This totals more than $787 billion, because the original bill was an estimate.
To date, the WSJ reports, $182 billion of the infrastructure funds have been awarded, but just $66 billion has been paid out.
Some Republicans are calling for the unspent funds to be used to reduce the deficit. The administration has countered that the plan called for the spending to be completed in stages over a two-year period, according to the WSJ.
One reason the money has been slow to hit the economy is the nature of the big-ticket projects; they require a bid process, specifications and plans to be developed and approved, permitting and other steps. But the funds that remain must be spent soon.
In cold-weather states, such as Maine, the construction season is brief, so projects not “shovel-ready” today are not likely to begin before next spring. Furthermore, material orders can mean a long lag time, and contractors and subcontractors may not see their final settlements until the finishing touches are put on construction projects.
Rather than call for pulling the plug on the stimulus, Republicans must insist the pace of outlays is increased. Money that remains available should be awarded in part on the basis of how quickly the projects can begin.
Republicans, like Snowe, would be wise to push for spending what has been approved, even if they disagreed with or voted against ARRA. The economy may be teetering between recovery and a stall, and stimulus spending is one element of help.