The effectiveness of the original economic stimulus law passed in 2009 was again in the spotlight in Congress today, as lawmakers were told that almost half of one cabinet department’s stimulus funds still have not been spent on green energy job initiatives.
In testimony before the House Oversight Committee, the Inspector General of the Department of Energy said while billions have been pushed out the door in stimulus funding, states have not yet put that money to work.
“Nearly 45 percent of the Department's Recovery Act funding has yet to be spent,” said Inspector General Gregory Friedman, who noted that the Energy Department had received over $35 billion in the stimulus.
“The concept of "shovel ready" projects became a Recovery Act symbol of expeditiously stimulating the economy and creating jobs,” Friedman told lawmakers.
“In reality, few actual “shovel ready” projects existed,” he added.
Friedman made clear that there have been a “number of successes” with the Recovery Act, but he said in too many cases, too much money was still on the sidelines.
“One state had only spent 30 percent of its State Energy Program funds two years after they had become available,” said Friedman.
Friedman said the huge influx of new money for programs like weatherization, environmental cleanup and more, simply overwhelmed the bureaucrats dealing with those programs at the state and local level.
He also blamed “overly complex” rules and reporting requirements in federal law.
As for money that went to spur the creation of so-called “green jobs,” another official from the Labor Department said despite millions in grants, “green jobs have not materialized, and therefore job placements had been much less than expected.”
Like the troubles at the Energy Department, Labor Inspector General Elliot Lewis said in one ‘green jobs’ program, only 33% of $490 million grant money had been spent.
“As such, we are concerned as to whether grantees will effectively use the funds and deliver targeted employment outcomes by the end of the grant periods,” said Lewis.
Lewis raised the specter of the Labor Department going back to the groups that received those green jobs grants and taking back the money.
At the hearing, Republicans and Democrats split as one might expect on the lessons that should be drawn from the record of stimulus spending, with Democrats urging more time for these plans to work, while GOP members said the effort was a costly mistake.
“I think government does have a role to play here; a very important role,” said Rep. Elijah Cummings (D-MD), who urged his colleagues not to “throw the baby out with the bath water.”
But Republicans made clear they aren’t interested in funding another round of stimulus spending that might not produce jobs as advertised.
