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Obama promises 600,000 new jobs from stimulus spending

Only $37 billion of the $787 billion has been spent so far. Confusing provisions and the sheer size of the bill have created delays.

By Ron SchererStaff writer / June 8, 2009

Bernie Synakowski works on the brakes of a new cleaner-burning bus at the Daimler Buses North America facility in Oriskany, N.Y., on June 3. Washington is paying hundreds of millions of dollars for the new buses, one of the $787 billion stimulus plan programs, that has the less glamorous, harder-to-quantify effect of keeping workers employed - a buffer from the recession to some in the auto industry.

Kevin Rivoli/AP


New York

President Obama is set to announce Monday plans to ramp up spending of the $787 billion in economic stimulus money this summer, promising to create or save 600,000 new jobs.

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The president is frustrated that it’s taking so long to get the money into the American economy. The national unemployment rate hit 9.4 percent last week, a 25-year high. According to the government’s website, only $37 billion had been spent by May 22, and a good portion of that money went to Social Security recipients and tax relief.

An array of federal agencies from the Department of Health and Human Services to the Department of the Interior intend to accelerate spending on 10 major projects this summer, according to Reuters. Some of the expedited spending is for 200 waste and water systems in rural areas and some maintenance and construction projects at airports, highways, and the national parks.

But contractors and budget analysts familiar with government efforts to spend large sums of money say the delays are not surprising. Some states have their own competitive bidding rules, and “Buy America” provisions in the stimulus legislation are causing confusion.

In short, spending hundreds of billions of dollars quickly and responsibly is not easy.

“Starting something new and getting money out the door is not a fast process,” says Stan Collander, a managing director at Qorvis Communications and a federal budget expert.

After hurricanes Katrina and Rita, for example, Congress passed legislation spending billions of dollars. One program was a Community Development Block Grant of $13.3 billion for Louisiana. This money was mainly for contractors, home construction, and bridges, according to D.J. Nordquist, a former Gulf Coast relief staffer. As of May 15, almost 30 percent of the money was still unspent.

“You can only get the bureaucracy to move so fast,” says Ms. Nordquist, formerly with the agency involved in the Gulf Coast redevelopment.

The sheer size of the spending package is perhaps the largest impediment, says Isabel Sawhill, a fellow at the Brookings Institution in Washington.

In addition, many agencies in the new administration are still not fully staffed. “So the capacity of the federal government is somewhat reduced, and you have a real challenge on your hands,” says Ms. Sawhill, a member of the Office of Management and Budget during the Clinton administration.

Confusion is also a factor. The Obama administration is trying to document all the new jobs and projects, leading to uncertainty about reporting requirements.