May 13th, 2009
05:59 PM ET
5 years ago

White House on rescue: How we're doing

NEW YORK (CNNMoney.com) - The Obama administration, issuing its first progress report on the $787 billion stimulus program, said Wednesday that $88 billion has been made available and that it's ahead of schedule in implementing most initiatives.

Of the $88 billion, some $28.5 billion has been actually spent with nearly $16 billion going for Medicaid payments to the states, according to the report. The administration has also enacted tax cuts under the Making Work Pay program and begun mailing $250 payments to 54 million senior citizens.

Critics, however, say the money is not being spent fast enough to help arrest the economy's slide. States are now waging yet another round of battles with their budgets after April tax revenues came in under estimates.

House Republicans, meanwhile, latched onto a report that stimulus funds will be used to repave an alternate runway at a little-used airport in an influential Democratic congressman's district.

"The Democrats' trillion-dollar stimulus spending bill was intended to create more jobs immediately, but it has quickly become the latest example of Washington's arrogance," said John Boehner, R-Ohio, in a statement.

The Obama administration's report, which will be followed by similar quarterly updates, touted the stimulus money flowing to the states to bolster education. Thirteen states have been approved to receive money under the state fiscal stabilization initiative that's designed to maintain education spending levels and prevent the loss of teachers' jobs.

The report also cited various news articles detailing the impact of stimulus spending. For instance, a Chicago window factory that made headlines last year when laid-off workers occupied the building is rehiring some people to make energy-efficient windows. Pennsylvania expects to get $4.5 million to pay for meal programs for senior citizens. And three counties in South Carolina plan to use $4.7 million to retrain the jobless and employ low-income youth.

The administration repeated its estimate that 150,000 jobs have been created or saved so far, and another 600,000 will be created or saved in the next 100 days as billions more dollars in contracts and grants are awarded.

"The act is now creating jobs in all 50 states," a senior administration official said. "People who are out of work or at risk of losing their jobs are experiencing and will continue more so to experience the benefits of this act across the country."

As the economy continues to weaken, states are contending with new yawning budget shortfalls.

Overall tax collections fell 12.6 percent in the first quarter, according to a new Rockefeller Institute of Government report. And the situation likely grew worse in April as personal income tax revenue plummeted. Several states are already having to tap into reserve funds to balance their budgets before their fiscal years end on June 30.

"Deeper revenue shortfalls and more budget adjustments are likely on the way for at least the next two quarters of this year," said Institute Senior Policy Analyst Lucy Dadayan.

New budget gaps of $59 billion have opened up in at least 42 states plus the District of Columbia, according to a Center on Budget and Policy Priorities report released Wednesday. This equals about 9 percent of state budgets. These gaps are in addition to the $48 billion cummulative shortfall states faced during the current fiscal year.

While the federal government has made billions available to the states, they have yet to claim much of it. Of the nearly $13 billion in state fiscal stabilization funds available, only $244 million has been spent, for instance.

The delay stems in part from states having to apply for the funds or receive applications and bids for projects.

Also, some cash-strapped state governments are finding they don't have the manpower needed to implement the stimulus programs. Responding to state's pleas for assistance, the White House Wednesday issued a new guidance allowing states to receive funds to cover administrative costs more quickly.

Asked about the states' worsening fiscal health, a senior administration official said the White House knew that the states would continue to struggle.

"The Recovery Act was never intended to fully offset state budget declines," the official said. "It certainly was intended and will, with expenditures of well over $100 billion going to states through the stabilization fund, offset a significant chunk of those loses. These cuts would be a lot deeper and those budget gaps would be a lot wider in the absence of the plan."


Filed under: John Boehner • Obama administration
soundoff (41 Responses)
  1. Really!?

    Local school districts are getting hundreds of thousands of dollars to spend from the stimulus. Its one time money so it might save a job for a year, but thats not the purpose. This money is just going to get lost and not "stimulate" anything. Save a job or two for a year, pay for a project that was scheduled anyway, buy some books, a few pencils. Waste, waste, waste

    May 13, 2009 08:45 pm at 8:45 pm |
  2. Andi

    Here we go. I'm sure the GOP has had their responses ready for days. Now we have to hear them whining about this for weeks while their followers on these boards complain about the 'liberal' media not covering the GOP enough........

    May 13, 2009 08:54 pm at 8:54 pm |
  3. DaBird

    The White House first said it would create jobs with the stimulus. Then it changed to create OR saved that amount of jobs. When will the Obama sheep learn that "don't ever let a crisis go to waste" means let's spend more money for our aganda. Before you call me right wing nut, I am an Independent who can think with common sense.

    May 13, 2009 08:57 pm at 8:57 pm |
  4. mark

    Excessive spending by any government never works. A huge burden is now going to rest on small business and manufacturing. More defaults and bankrupts will occur causing tax revenues to drop even further. The government won't have the money to keep functioning on State or federal levels. Increased taxes will cause even more defaults and deeper recession leading to depression. Unemployment rates will go to 15% by the end of 2010 and 20% by 2011 if spending does not stop. Save every dime you have and do not spend you will soon need it....You had better learn how to garden cause food costs will soon be going up.

    May 13, 2009 08:59 pm at 8:59 pm |
  5. Lynn

    Isn't the face the color of no known race part of Washington? So then he is rightfully calling himself arrogant. If they had spent more, more quickly he would have been complaining about that. What a pathetic excuse of a voice for the people this guy is.

    May 13, 2009 08:59 pm at 8:59 pm |
  6. Chuck, Tennessee

    The Obama administration is clueless. Out of $28.5 billion spent, $16 billion has gone to the welfare program Medicaid. How does that stimulate the economy? The jobs being created are mostly low-paying government jobs that aren't permanent (i.e. census jobs). All Obama is doing is implementing more social programs that will bankrupt this country (like nationalized health care). Why is it that the liberal media has reported very little on the recent announcement that half of the money in the 2010 budget will be deficit spending? This is not a probelm Obama inherited, it is one he is in the process of creating. China will own us in a few years. Hope all of you members of the Obama nation are happpy!

    May 13, 2009 09:00 pm at 9:00 pm |
  7. gary davis Harbor Oregon

    ah another republican putting his nickels worth of crap into a very productive package (Boehner ) should go back to the bar and have another shot and then retire and go home . take cheney with him .
    I think we should stop calling Cheney a republican and just say IDIOT he gives whats left of the republican party a BAD TASTE . .

    May 13, 2009 09:15 pm at 9:15 pm |
  8. Chad

    How are you doing you ask? hahaha. You've spent more than all Presidents combined going back to Washington. You're bankrupting our country, socializing our country, taking over private companies, scaring the crap out of New Yorkers with Air Force One. Doing great Obama!

    May 13, 2009 09:27 pm at 9:27 pm |
  9. hozo2006

    why don't the repubs just shut up ... they got us here in the first place

    May 13, 2009 09:33 pm at 9:33 pm |
  10. JB Sullivan

    Mr. Boehner is such a looser. The man has nothing interesting or intelligent to say. He is a good example of the GOP, Grand Oppressive Person!

    May 13, 2009 09:38 pm at 9:38 pm |
  11. Ask not what big business can do for you but what can you do for big business

    I want to help big business so they can not only help themselves but also help donate campaign contributions to people who will help them to help themselves to our treasury.

    May 13, 2009 09:52 pm at 9:52 pm |
  12. Judy from PA

    Don't think it's going well. Can't refinance the house because it's worth less than the mortgage, but my loan wasn't through a failing bank, so the Obama plan doesn't help. Also, my husband's hours at work were cut in half, so since he didn't lose his job, don't qualify under the Obama plan. I did hear of a man down the street who is on disability for not knowing how to read. My husband and I are so stupid for going to college, getting degrees, and taking out a good house loan with a reputable bank! So stupid.

    May 13, 2009 10:39 pm at 10:39 pm |
  13. John G

    How many jobs have they created and filled with unemployed citizens?

    I want an exact number from President Transparancy

    May 13, 2009 10:41 pm at 10:41 pm |
  14. No Hillary = No Obama

    As a citizen, I have yet to see any direct benefit of all this stimulus money – none. If anything California is on the brink of an economic meltdown.

    May 13, 2009 10:48 pm at 10:48 pm |
  15. Susan

    I bet some people will be WORKING repaving that airstrip, Mr. Boehner. You couldn't say anything positive about the Dems you pretend to want to work with if your speechwriter wrote it for you. Get a life, and stop being so negative.

    May 13, 2009 10:50 pm at 10:50 pm |
  16. blue cross

    if thats the case then why did all american small businesses tell there employees that they were changing health insurances and all of a sudden to pay for full coverage on wives and kids the health care increased. Everyone that I have talked to that have worked for there companies for more than fifteen years have increases of paying for there families coverage now have to pay an average of 250.00 usd's from not paying nothing 5 years ago. Just another tax out of our pockets. Socialism has taken over. We will be waiting in soup lines in a couple of years. What do we tell our kids! Third world country just around the corner. ha ha

    May 13, 2009 11:05 pm at 11:05 pm |
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