The Economy Today: Wait, How Much Did We Spend?

Headlines from New Mexico, Tennessee, Maine and elsewhere

The New York Times reports that, earlier this month, the Obama administration overstated (by “roughly a third”) how much of the $787 billion stimulus package had actually been used. Of the $28.5 billion that was supposed to have been outlaid, $11.5 billion was supposed to have been paid by the Labor Department to the unemployment trust fund—when, in fact, that amount was only $1.1 billion. The administration “argues that how much money has actually been paid out is not as significant as how much has been obligated, or promised.” Still, the accounting error is a reminder that the dissemination of stimulus funds is, more often than not, a snarled process.

The Associated Press reports that the national economy has sunk at a rate of 5.7 percent in the first quarter of this year—less than the 6.1 percent rate estimated last month, but grim news nonetheless. And a USA Today analysis shows how the gargantuan federal commitments made in the past year break down to an extra $55,000 per household that taxpayers will have to shoulder.

Tennessee lawmakers, be forewarned. Education Secretary Arne Duncan, the AP reports, says that states will not help their chances of receiving stimulus money unless they embrace “innovations like charter schools.” (Tennessee lawmakers have blocked an effort to let more children into charter schools.) The administration “wants to reward states that are willing to push a reform agenda with as much as $100 million dollars each,” but “states that don’t have the political will, he said, will lose out.” Still, according to The Tennessean, the state has received federal approval to spend $635 million in stimulus funds to fill gaps in its higher education and grade school budgets.

Maine officials are worried that the state is not receiving enough guidance about applying for stimulus money. The Bangor Daily News reports that the state was “quick to apply for and receive” $86.8 million for highway and bridge projects. But there are still other infrastructure projects and development programs that are waiting for money; as finance commissioner Ryan Low says, “We are still waiting for guidance on where it is we apply for those funds.” Yesterday, the state controller also told lawmakers that Maine will have to lend dollars for stimulus projects to get them rolling, because of delays in receiving federal funds.

Grants, New Mexico, is one of the communities receiving a portion of $4.3 million being awarded to local governments based on population and crime rate data. The Grants Police Department will receive a one-time grant of nearly $40,000, and with a portion of it is “proposing to purchase a 2009 Ford F-150 vehicle and equipment,” the Cibola Bacon reports, to help “transport crime scene equipment,” among other things. The department “is seeking public comment on the proposal.”

In California, which continues to swim in red ink, the L.A. Unified School District cancels most of its summer school programs, which the Los Angeles Times calls “the most tangible effect of the multibillion-dollar state financial cuts to education.” Gov. Schwarzenegger has also proposed ending all new Cal Grants, the state’s main financial aid arm for college students. If the plan passes, California could become the first state to “eliminate student financial aid while raising college tuition.”

Has America ever needed a media watchdog more than now? Help us by joining CJR today.

Jane Kim is a writer in New York.