Stimulus Money Rules To Be Released

The administration late last week postponed until this week the issuance of a set of rules to more clearly delineate to state and local officials the types of projects and activities for which Economic Recovery Act funds can and can’t be used for.

At a White House forum last week with state officials regarding the use of stimulus funds — where President Obama, Vice President Biden, and other senior officials emphasized that the money needed to be spent “wisely” — Biden highlighted the coming rules, saying some uses would be prohibited even though they were an otherwise legal use of the funds.

No Earmarks in the Recovery Bill

There are no earmarks in the Recovery Bill (if you need an earmark primer, visit previous blog entries) because they were forbidden by the President and Congressional leadership. But look more closely.

The vast majority of recovery dollars flow through established formula to states and localities or through existing competitive federal programs (look for RFPs in the coming weeks.) Because the funding will flow through existing programs, it must be used in ways that are consistent with the requirements of those programs. For example, in the Energy Efficiency arena, Weatherization funds will be given to state agencies who will disburse the funds to local projects consistent with existing federal Weatherization Program requirements.

Not every dollar of the stimulus bill will be spent wisely or well. Certainly some undeserving organizations/agencies will receive funding and will not produce the results they promise or meet federal program guidelines. On balance, though, I believe the Recovery Bill will ease financial pressure on states, will improve educational opportunities for kids and young adults, and will keep many engineers, academics, trades people, and insulation installers (among others) employed.

What do you think?

Stimulus Bill a Go-Go

The Stimulus Bill is an 800 page document that is available in five sections here. The text of the bill was not widely available until the President signed it this week. How about a 'forest through the trees' view?
- There are two sections of the bill: tax provisions and federal spending.
- The total price tag is $789 billion.
- Of the $789 billion, $463 billion will be spent on transportation and infrastructure upgrades and construction, health care programs, education assistance, housing assistance and energy efficiency upgrades.
- The other $326 billion takes the form of personal and business tax breaks and tax provisions affecting payments to states.
- Some of the federal spending will be distributed via competitive grants and some will be distributed via formula.
- States and localities don't yet know when they'll see funding, but are they are VERY ANXIOUS TO KNOW.

The bill is broad and specific at the same time: it funds wide swaths of our economy, but in most cases, it funds these parts of our economy in a very particular way. Let me give you an example:
Every year, Congress funds One Stop Centers. One Stop Centers train workers for new jobs or re-train workers who change careers. One Stop Centers have an appropriation line-item within the Department of Labor's Employment and Training Administration (ETA.)

In the Stimulus Bill, One Stop Centers are 'super' funded. They can apply for extra money ($750 million available nationwide.) But they can't spend it willy nilly. They must use these competitive job training grants to train workers for "high growth and emerging industry sectors." (ETA will probably provide guidance in the grant announcement as to what qualifies as 'high growth and emerging industry.' ) Of the total, $500 million will be used for jobs relating to energy efficiency and renewal. One Stop Centers on top of their game (ones who work closely with the local business community and who have a record of producing results) will apply for this funding and make a difference in their community.

One Stop Centers are one of MANY, MANY funding accounts in the Stimulus Bill. Too many (certainly) to include in one blog entry.

The Stimulus Bill is a reminder of why you should have a political consultant. Many, many organizations and segments of our economy are going to benefit from the stimulus bill, by design.

What questions do you have about the Stimulus Bill? E-mail us at artofpolitics at mac dot com.

Local Professor Urges Investment in Greening of Public Buildings

As part of a hearing by the Federal Education and Labor Committee, local UMass Professor Robert Pollin recently testified on the need for investments in 'green' retrofitting of public sector buildings to put unemployed construction workers back to work. Pollin is a Professor in the Department of Economics and Co-Director of the Political Economy Research Institute (PERI) at UMass, Amherst.

Pollin and other economists who testified at the hearing said the initiatives discussed would allow the country to prepare for post-recession growth, as well as create interim jobs for the estimated 800,000 construction workers left unemployed after the downturn in the housing market.

Speaker Pelosi raised the idea of a $150 billion stimulus package earlier this month, a proposal that Democratic leaders have insisted focus in large part on expanding initiatives geared toward employing and otherwise assisting average Americans.

The Democrats may take up such a package in a lame duck session after the election. But the White House and congressional Republicans have been cool to the idea, questioning whether the proposals discussed by the Democrats would do much to stimulate the economy in the short term.

Here's Professor Pollin's testimony:

http://edlabor.house.gov/testimony/2008-10-24-RobertPollin.pdf