Blog Posts of Sam Rosen-Amy

The Recovery Act is Working

 

Thirty-eight of fifty-four economists can't be wrong. That's the number of economists who, in a recent survey by the Wall Street Journal ($), said that "the American Recovery and Reinvestment Act boosted growth and mitigated job losses." In other words, 70 percent of economists think that the Recovery Act has helped the nation. Looks like somebody's been reading the many, many official reports which have repeatedly said the exact same thing. But I guess something just isn't true until a majority of randomly selected Ph.Ds say it, right?

And speaking of job creation, Robert Broadsky from Government Executive has a good catch: March 17 was the last day for recipients to hand in any changes to their reports from last quarter, and because of these changes the Recovery Board has revised that quarter's reported job count number up to 608,203, from 599,108. Further proof that the Recovery Act is helping prop up the nation's economy. Just remember that these numbers, for the October 1-December 31 quarter, and are not cumulative, and cannot be added to job counts from other quarters, thanks to new reporting guildlines explained here.

(Sam Rosen-Amy 03/19/10; 0 comments)

Senate Rejects Arbitrary Budget Caps

 

Thanks in no small part to the 1,146 emails you sent in the past 48 hours, the Senate just voted down the Sessions-McCaskill amendment, which would have instituted draconian discretionary budget caps for the next three fiscal years. The amendment lost on a 56-40 vote, failing to reach the 60-vote margin it needed by only four votes.

Take pride in your victory, people. Thin margins such as these show just how important your voice is. Thank you for telling your senators to vote no to fiscal irresponsibility.

Image by Flickr user arthit used under a Creative Commons license.

(Sam Rosen-Amy 03/18/10; 3 comments)

Tell the Senate to Vote No on Disastrous Discretionary Spending Caps

 

In what looks like an attempt to out-fiscal-hawk President Obama, Sens. Jeff Sessions (R-AL) and Claire McCaskill (D-MO) have introduced an amendment that would impose strict limits on discretionary spending for the next three years. The amendment sets limits far lower than Obama's already low budget proposal, and it even includes a cap on defense discretionary spending, something the President's proposal does not do. Such caps would result in drastic cuts to many vital economic safety net programs and public protection agencies, negatively impacting the lives of millions of Americans. And while the two senators claim that the amendment will reduce the deficit, in reality, because discretionary spending is so little of the federal budget, the amendment's deficit-reducing effects will be minimal.

Enacting these caps would be the height of irresponsibility. Placing limits on discretionary spending locks in spending levels prior to knowing our nation's needs in the coming few years, which will leave us flat-footed and unable to respond to unforeseen challenges. Without thorough debate about whether these programs are protecting the well-being of the men, women, and children they serve, Congress will be ignoring its responsibility to meet the needs of the nation. A responsible budget is one that has the flexibility to fully fund the nation's priorities while maintaining sustainable levels of debt.

There are many reasons why the Sessions-McCaskill amendment is an irresponsible move that will bring harm to our nation:

  • Cuts to food safety programs will result in even more sickness and death caused by contaminants in the nation's food supply.
  • Cuts to the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) will restrict access to vital nutritional assistance that so many of our friends and neighbors need in these harsh economic times.
  • Cuts in the Treasury Department's budget will allow more tax cheats to break the law and escape paying their fair share of taxes.
  • Cuts to the National Oceanic and Atmospheric Administration (NOAA) will hinder the nation's ability to prepare for hurricanes, blizzards, and climate change.

The Sessions-McCaskill amendment could force all of these things and more to happen, without thorough debate in Congress, simply because of arbitrary caps enacted years earlier. Even worse, the caps cannot be adjusted except by supermajority votes in both houses.

Long-term fiscal imbalances are a threat to the economy and should be addressed; however, the Sessions-McCaskill amendment does nothing to reverse the trend toward unsustainable national debt. And, in the short-term, reducing the federal budget deficit will stifle the emerging economic recovery while punching holes through the already frayed safety net.

Contact you senators using this form. Tell them that the Sessions-McCaskill amendment is bad for the nation and that we need a budget that responds to the needs of all Americans. Tell them to vote no on S.Amdt. 3453.

For more information, check out the Center on Budget and Policy Priorities, which has an excellent rundown on just how bad this amendment is.

Image by Flickr user talkradionews used under a Creative Commons license.

(Sam Rosen-Amy 03/16/10; 2 comments)

Agency Staffs Burdened by Recovery Act Spending

 

Ever wonder about the mechanics of how to spend over $800 billion? Well, so did the authors of a new report from the Recovery Accountability and Transparency Board, the group charged with Recovery Act oversight, a report which looks at staffing levels in federal agencies in the wake of the Act's passage. And the results aren't good. The report warns that "Recovery Act funding has substantially increased the workload of most agencies receiving these funds," and that as a result, many agency programs are reporting drastically inadequate staffing levels for their workloads.

The report, prepared by the Commerce Inspector General, who sits on the Recovery Board, surveyed 29 federal agencies receiving Recovery Act funding, representing hundreds of Recovery Act programs. Surprisingly, the survey found that 41 percent of the programs in large agencies (defined in this report as the Departments of Defense, Health and Human Services, and the Interior) reported inadequate staffing levels. On top of that, another 45 percent reported that while they were adequately staffed, doing so required taking staff away from non-Recovery Act duties. The other agencies reported similar numbers, with only 24 percent of programs in these agencies saying they have adequate staffing levels with minimal impact on non-Recovery Act work. And this is despite agencies detailing some 22,000 staffers to work on Recovery Act grants and contracts.

The consequence of this understaffing is fairly predictable. Crucial work will not get done, and overall work quality will suffer. The report says that because of the overload "the awarding of contracts and grants is being delayed-as is other work; employees are working overtime; and the oversight and monitoring of awards-especially non?Recovery Act contracts and grants-are expected to decline, as many agencies attempt to implement Recovery Act requirements while carrying out their ongoing programs and operations." The report also warns that the impact on work quality may be exacerbated by a dearth of qualified contracting personnel in the agencies.

To be clear, the understaffing problem is not due to the reporting requirements of the Recovery Act which we here at OMB Watch are so fond of. The agencies are under enormous political pressure to spend the $275 billion of Recovery Act discretionary funds as fast as possible, thanks to the Obama Administration's dedication to funding "shovel-ready" projects. But spending money quickly without creating absurd amounts of waste, fraud, and abuse requires large staffs. And thanks to the all the attention that these programs are getting, both from Congress and from the public, agency heads are far more likely to pour resources into Recovery Act projects than other programs, regardless of whether such allocations make sense policy-wise. As the report notes, "to ensure timely completion of Recovery Act work, agencies are prioritizing their Recovery Act workload, hiring additional personnel, and shifting and/or reassigning staff."

That said, I'm sure the transparency requirements of the Act are at least contributing to the strain on the agencies. For instance, agencies are tasked with helping their grant, loan, and contract recipients understand how to report back on the use of their funds, a somewhat confusing process for those who have never reported before. Responsibilities such as these, while they are incredibly important from a transparency perspective, do take up staff time, since they involve communicating with thousands of recipients scattered across all fifty states. I'm disappointed the Recovery Board's report does not specifically address this issue.

Unfortunately, at the end of an otherwise great report, the Board whiffs on providing solid recommendations for how to fix the staffing problem. The report simply finishes by saying "we recommend that agencies continue to closely monitor their staffing of both Recovery Act and non?[Recovery Act] work, and make adjustments as necessary to ensure that all contracts and grants are properly awarded and monitored." Well, if they won't say it, I will: the agencies need to begin channeling more resources to hire and train contract officers, and Congress needs to increase agency funding by the requisite amount so that the program funding levels are not adversely affected. End of story. You cannot simply dump billions of dollars on already-stretched agencies and expect them to deal with the new funding quickly and easily.

It's reports like this that make discretionary caps such as the ones proposed in President Obama's budget patently absurd, since they severely limit the government's ability to react to new situations.

Image by Flickr user Stewf used under a Creative Commons license.

(Sam Rosen-Amy 03/15/10; 0 comments)

Earmarks: Inherently Bad or Just Broken?

 

You can always tell when the appropriations season is approaching because, somehow, earmarks, the shadowiest part of the appropriations process, always find a way of sneaking back into the political discourse. True to form, as we wait for Congress' budget resolution, today saw both the Democrats and Republicans announcing their own earmark reform plans. The House Democrats, through Congressman David Obey, chairman of the Appropriations Committee, announced that they would be forbidding earmarks to for-profit organizations. At the same time, House Republican Leader John Boehner announced that his caucus was considering an outright ban on earmarks from House Republicans.

Both actions seem like an overreaction. While there was indeed earmark abuse, all for-profit entities were not abusing them, and the House Democrats' actions seem to be punishing those who were following the rules. Also, as a recent New York Times article on the Congressional Black Caucus Foundations suggested, not all non-profits are perfect angels. And banning all earmarks completely won't get rid of corruption or influence-peddling; the most famous recent such scandal, involving Jack Abramoff, wasn't about earmarks.

We at OMB Watch don't take a strong stance either way on earmarks, so we're not going to endorse either party's proposal. What we care about is transparency. As long as everything is transparent and above-board, we're okay with it. But right now, the earmark process could be a lot more transparent.

The problem is that it can be difficult to tell who requests which earmark. In 2009, Congress mandated that Members disclose their earmark requests online. This should have solved the transparency problem, but instead of providing the data in one place, the new rule left it up to each Member to post their earmarks on their individual websites. This meant that there were now 535 different websites listing earmark requests.

To help fix this new problem, Obey's announcement banning earmarks for for-profits also included a promise to provide a "one-stop" link to all Members' earmark requests. While it's not clear what how this promise will be executed (one page with every Member's earmark requests, or one page with links to each Member's website which lists their requests?), we're hopeful it's similar to the principal behind a petition OMB Watch just signed onto. The petition calls on Congress and the Obama administration to make public all earmark information, in one place, in a data-readable format. This information, the "who, what, when, where" of every earmark, could be used by everyone from journalists to advocates to ordinary citizens to actually make the earmark process transparent. It's a great idea, and getting support for the petition is important. Even if Obey releases all earmark information in one place, we still need the Senate data, since Obay's power is only over the House appropriations bills. So go sign the petition, and help bring transparency to the earmark process.

Image by Flickr user johnmuk used under a Creative Commons license.

(Sam Rosen-Amy 03/10/10; 0 comments)

Fun with Recovery Act Tax Expenditure Graphs!

 

The Recovery Board, via the Office of Tax Analysis, has a new set of snazzy charts and graphs breaking down Recovery Act tax obligations, from March to December 2009. There isn't anything particularly newsworthy in these charts, since we've known the relative sizes of the expenditures for a while now, but they are very useful in seeing the expenditures over time, which is a new trick. I added part of one of the more interesting charts below; just be aware that more current estimates place the tax expenditure amount obligated closer to $120 billion.

The main take-away from the chart is that thus far, the Making Work Pay credit is far larger than any other single credit, with only all business tax credits combined coming close to it. This should continue for the rest of the Act's life.

Speaking of charts, I have to admit that the Board has been pretty good about putting up visual guides to the Recovery Act. Each new release of recipient data is accompanied by a set of charts showing the composition of the current release, and comparing it to earlier quarters. But the Board has an almost bewildering amount of data at its disposal, and I'd love to see them do more with it. For instance, it would be great to see a set comparing the federal agencies by project status. The site has an excellent set of charts on the late reporters, showing them by funding type (grant, loan, or contract) and by recipient type (prime or sub), but what if they expanded it out to include by agency or by state? I know ideas like these are why the Board made the recipient reports available for public download, so that groups like OMB Watch can take the data and do interesting things with it, but while we're working, why can't the Board take a crack at it itself?

(Sam Rosen-Amy 03/09/10; 0 comments)

How Not to Make an Example

 

I wanted to highlight one other thing from ProPublica's article on the "two-time loser" list, a nugget which I think was buried in the article. According to earlier OMB guidance, the main recourse agency officials have to punish repeat offenders is the revocation of federal funding, and we haven't heard whether agencies have used this stick yet. But ProPublica quotes OMB spokesman Tom Gavin as saying that, thus far, one, and only one, organization has suffered this fate. Want to guess which greedy, no-good corporation is flaunting the will of Congress, and which is being singled out as a rule-breaker? Maybe Xe? Wal-Mart? ENRON!?!

Nope, it's those money-grubbing child hunger advocates, Share Our Strength. While I applaud the federal government for cold-heartedly applying regulations, I'm not sure if a non-profit aimed at helping those who literally can't help themselves is really the best group to make an example of. Especially when it sounds like they're just as confused about how to report as thousands of other recipients. Regardless, Share Our Strength now has about $90,000 fewer dollars to help poor kids eat nutritional meals.

(Sam Rosen-Amy 03/08/10; 0 comments)

ProPublica Fact-Checks Recovery Board's Two-Time Loser List

 

ProPublica has a great story up today, examining the list of "two-time losers" the Recovery Board posted on their website. The Board chairman, Earl Devaney, said he posted this list of recipients who failed to report, as they are legally required to do, in both reporting periods, in an effort to shame the recipients into reporting. Since agencies have very few sticks to get recipients to report, the list sounded like a great idea. One problem: ProPublica found that at least 60 of the 360 recipients listed did actually report on time.

Hopefully the Board is working on straightening this out, and figuring out where things went off the tracks. That said, it sounds like Devaney's stunt did accomplish its goal. ProPublica quotes one non-reporter as saying that Devaney's list, and accompanying comments, were "uncalled for and not reflective of the intent of those accused." Guess who's probably reporting next cycle!

(Sam Rosen-Amy 03/08/10; 0 comments)

CBO Scores Obama's Budget

 

I know everyone's been distracted lately with health care, the Olympics, and the last season of Lost, but the budget process has been churning away silently these past few months. While we await Congress' budget resolution on April 15, the Congressional Budget Office decided to remind us all that the process is still moving ahead by releasing an analysis of the President's budget, one which is significantly less rosy than the President's estimate.

Granted, this is a somewhat ridiculous exercise, since Congress will likely ignore the President's budget, but it at least gives us a starting place. In any case, according to the CBO, Obama's budget proposal will add approximately $9.8 trillion to the nation's debt over the next ten years, $1.2 trillion more than the administration's own estimates. Almost all of this 14 percent difference comes in the out years, 2016-2020; in fact, the CBO's analysis is pretty close to the administration's over the next several years. For FY 2011, the upcoming budget year, the CBO estimates Obama's proposals would create a $1.341 trillion deficit, which is only a few percentage points higher than Obama's estimates.

Hit up the CBO report for all the fun, and, to save you the Googling, here's the President's budget from last month.

(Sam Rosen-Amy 03/05/10; 0 comments)

Recovery Act Data Shows Recipients Are Learning

 

Earlier today, the Recovery Board released the list of Recovery Act recipients who did not file during the second reporting period. According to the Board, recipients of 1,036 awards failed to file during this quarter, which was from Oct. 1 through Dec. 31. That number represents a whopping 76 percent decline from the first reporting cycle, which saw 4,359 missing award reports, and is less than one percent of all the award reports. Equally good news is that of the 1,036 missing reports, only 389 were from "repeat offenders," or recipients who failed to file in both quarters.

The trend from the non-filer list echoes other data the Recovery Board also posts, such as the late filers and report corrections. According to the Board, the second reporting cycle saw half as many late reports, which are award reports filed after the filing deadline. This past cycle, 7.3 percent of recipients filed late, down from 14.9 percent of reporters in the first round of reporting, and of these late reports, a vast majority of them were not repeat offenders. Similarly, only 12.75 percent of award reports were changed after the fact (recipients can change their reports for several months after the filing deadline), as opposed to over 21 percent in the first round.

These data sets show what we've been assuming would happen: Recovery Act recipients are learning. As time passes, and recipients learn how the reporting system works and how they're supposed to file, the number of reporting errors are slowly decreasing. More recipients are reporting on time, fewer are forgetting to report (or are understanding that they have to report), and there are fewer mistakes to correct after the fact. And this progress is despite the fact that there are more award reports in the second round than the first.

This trend will probably continue over the coming cycles, although it will be interesting to see if it hits a floor at some point, i.e. if there is some baseline level of user error we just can't escape.

The next important statistic to look at will be the change in data quality between quarters. While we know recipients are learning how to file, what we don't know is if they are entering better quality information this time around. Are there fewer award amount errors? Fewer job counting errors? Late reports are bad, but flawed data is even worse.

Image by Flickr user ekilby used under a Creative Commons license.

(Sam Rosen-Amy 02/25/10; 0 comments)