President Barack Obama released a report last week lavishly praising the alleged results of his $814 billion economic stimulus bill. That the president would issue a report praising his program as a success isn’t surprising. Even so, the inescapable reality facing Obama and his aides is the fact his program has failed to create new jobs as he promised it would. One new claim in the report deserves special comment. With more than $500 billion in stimulus spending shoveled out the door thus far by federal bureaucrats to fund more than 88,000 separate projects, the Obama report contends the money has been spent with remarkably little fraud.
Based on Obama’s rosy scenario, Time magazine’s Michael Grunwald called the economic stimulus effort a “clear managerial success,” and declared that “it’s about time to retire one set of critiques of the stimulus, that it would be riddled with fraud, hamstrung by delays and crippled by cost overruns.” Grunwald went on to paraphrase Earl Devaney, the Obama appointee who heads the program’s Recovery Accountability and Transparency Board, saying “you’d be crazy to steal from the Recovery Act; it’s far too transparent.” If you don’t recall Devaney, he’s the guy who paid $18 million for the stimulus program’s website redesign by a company run by a major contributor to House Majority Leader Steny Hoyer.
USA Today was rather less credulous than Grunwald. The newspaper reported Wednesday that at least $162 million in stimulus funds are unaccounted for, with 352 recipients failing to file required quarterly reports with the government explaining how they spent their stimulus grant money. Federal bureaucrats might not think that’s much money compared with half a trillion, but to ordinary Americans it’s a sizeable sum. Some 32 grant recipients have failed to report two or more quarters in a row, suggesting it’s more than just a paperwork problem.
In May, then-Office of Management and Budget Director Peter Orszag ordered his agency to take action within 20 days against stimulus grant recipients who failed to file reports more than one quarter in a row. However, USA Today could only find one nonreporting stimulus recipient who had been suspended from the program, thus leaving multiple delinquent recipients against whom the government has taken no action. Even more tellingly, OMB refused to let USA Today have copies of its enforcement reports. Despite constant claims by Obama and Devaney that the program is transparent, nobody knows with certainty how much waste, fraud and abuse have occurred in the program, but the available evidence suggests that it is probably immense. Only one thing is certain in this regard: Obama’s economic stimulus program is anything but a “clear managerial success.”