Thursday, February 18, 2010

Stimulus funds going to slashed programs

By Matt Kelley, USA TODAY

WASHINGTON — More than $3.5 billion in economic stimulus funds are going to programs that President Obama wants to eliminate or trim in his new budget.
The president's budget released this month recommends getting rid of Army Corps of Engineers' drinking-water projects, which got $200 million in stimulus funds, and a U.S. Department of Agriculture flood-prevention program, which received $290 million from the stimulus, a USA TODAY review of stimulus spending reports show.

The administration's budget plan says the corps and USDA programs are inefficient and duplicate similar, more effective work by other agencies. The proposed cuts indicate the programs shouldn't have gotten money from the $862 billion stimulus package, said Tom Schatz of the non-partisan budget watchdog Citizens Against Government Waste.

"It's certainly inconsistent, and it would have been better to have this realization a year ago," Schatz said. "But if inconsistency means they're going to cut the programs, it's OK. It's the other way around that bothers us."

White House budget office spokesman Thomas Gavin said the administration wasn't being inconsistent. Unlike the annual spending bills, the corps and USDA programs in the stimulus law didn't mandate funding for specific projects selected by members of Congress, Gavin said in an e-mail. That allowed agencies to "invest (stimulus) funds where they can do the greatest good," Gavin said.

The stimulus law, however, requires the corps' stimulus money to be spent only on projects that Congress had previously approved for funding.

Obama's proposed budget also includes $334 million in cuts to programs that got more than $3 billion in stimulus money. They include:

• A $100 million cut in funding for maintenance and construction in national forests. The Forest Service got $650 million for such projects in the stimulus package, of which $55.6 million has been spent, according to USDA reports. The White House budget says the Forest Service doesn't need as much money because it is building fewer roads.

• A $44 million decrease in funding for an Interior Department program to thin trees and brush on federal land to mitigate wildfires. The stimulus provided $15 million for the program. The administration says it is reorganizing the program, which has been less effective than it should be because it didn't focus on preventing the fires most likely to threaten homes.

Obama signed the stimulus package a year ago today, an occasion that the administration is marking with events at the White House today and across the country this week.

Stimulus spending: A year later

A year ago today, President Obama signed the economic stimulus bill, which the Congressional Budget Office now says will cost $862 billion. The law provides $626 billion in spending and $236 billion in tax cuts. USA TODAY's Matt Kelley looks at where the bulk of the money has gone so far in some of the largest spending programs.

The largest share of education money spent so far, $19.6 billion, went to state governments as part of the State Fiscal Stabilization Fund. States can use that money to shore up budgets for schools and other essential services.

About half of the energy funding, $16.8 billion, is for energy efficiency and renewable energy projects, including $5 billion to make low-income housing more energy efficient. Only about $687 million of that money has been spent.

The Transportation Department has $23.9 billion in the pipeline for highway construction and has spent $6.1 billion so far. The administration in January announced $8 billion in grants for 13 high-speed rail projects.

The package increased federal payments to states for Medicaid and unemployment insurance and boosted spending on food stamps. Unemployment insurance payments were $10 billion higher in 2009 than originally estimated.

What's next
The Education Department plans to announce in early April the first round of grants under Race to the Top, a $4.4 billion program distributing money to states with innovative school improvement plans. Forty states and D.C. applied for a share of the money.

The Energy Department this year will fund carbon sequestration projects from among a dozen awarded preliminary investments. Carbon sequestration captures carbon dioxide produced by industry for reuse or permanent storage. There's $1.4 billion in available funding.

The Transportation Department plans next month to redistribute all stimulus funds for highway projects that didn't get spent or allocated by today. Mass transit funds must be awarded by March or the department will redistribute that money, too.

The increased federal Medicaid payments to states under the stimulus package are set to expire at the end of the year. However, the additional funds for food stamps and unemployment insurance payments would continue.

Sources: Congressional Budget Office; stimulus spending reports by the Departments of Agriculture, Defense, Education, Energy, Health and Human Services, Labor and Transportation.

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