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Obama to Watch Cities' Stimulus Spending
President Tells a Gathering of Mayors That He Will Hold Them Accountable for Money Being Wasted

By Michael D. Shear
Washington Post Staff Writer
Saturday, February 21, 2009

President Obama warned the nation's mayors yesterday that he will hold officials at all levels of government accountable for how they spend federal stimulus money, pledging to "call them out" if the funding is wasted on projects that do not generate jobs for the struggling economy.

"If a federal agency proposes a project that will waste that money, I will not hesitate to call them out on it and put a stop to it," Obama told a gathering of 80 mayors at the White House.

The sharp language was a first salvo aimed at reassuring the public that the historic $787 billion devoted to the spending and tax cut plan will not be squandered. Aides said the president intends to send the same message to governors when they gather for a White House dinner this weekend.

It is also an effort to respond to Republican critics who contend that there are too few controls -- and too many opportunities for fraud and abuse -- associated with the biggest single outlay of federal money in government history.

"If you're seeking to simply fund a personal agenda at the expense of creating jobs and using taxpayer money to do it, the president will call that out and stop it," press secretary Robert Gibbs said yesterday. "That's true for agencies and members of this administration. That's true for governors. That's true for mayors. That's true for anybody that might take part in any amount of this funding."

After a closed-door meeting with Obama and several of his Cabinet officials in the East Wing of the White House, several of the mayors said they welcomed the scrutiny.

"We get called out every day at the local level," said Miami Mayor Manuel A. Diaz, president of the U.S. Conference of Mayors. "We have plenty of constituents that will be doing that before the president does."

Obama's signing of the stimulus plan on Tuesday means that money will soon begin flowing, setting off political scrambles in states and cities over who controls how that funding will be spent.

Several mayors said they urged Obama and his team to make sure that the money does not become bottlenecked at the state level, where some Republican governors have waffled about whether they want the funding.

South Carolina Gov. Mark Sanford called the stimulus plan a "fundamentally stupid idea that would ultimately damage the economy, damage the capitalistic system that has been the envy of the world." He has since said on CBS that "being against the plan doesn't preclude taking the money."

Republican mayors, who saw their party leaders in Washington fiercely oppose the stimulus package, nonetheless said after the meeting with Obama that they planned to be just as aggressive in seeking -- and spending -- the money the legislation provides.

Charlotte Mayor Pat McCrory said he worries that too much money will be spent recklessly on projects that have no long-term benefits. But he said he will not turn it down.

"I have no choice but to make it work, because I have constituents who are paying for it with their tax money," McCrory said. "I'm going to do everything I can to make sure my city gets its fair share."

New Orleans Mayor C. Ray Nagin (D) said he is optimistic that Louisiana's governor, Bobby Jindal, will not block his city's access to the money. Jindal, a rising GOP star, has been tapped to give the Republican response to Obama's speech to Congress next Tuesday.

"Most of the money is going through the states. The governor of the state of Louisiana is a Republican," Nagin said. "He has a certain vernacular and a certain way he needs to talk right now. But I don't think it's going to impede us."

Nagin noted that the stimulus legislation includes language that allows lawmakers to request any money that a governor does not want.

"I told the governor personally: Any dollars he does not want, we will take them gladly," Nagin said.

Obama addressed Nagin's city directly yesterday, officially extending through September the term of an administration aide overseeing the rebuilding of the Gulf Coast after Hurricane Katrina.

The Department of Housing and Urban Development also announced that it will continue providing temporary housing assistance to victims of hurricanes Katrina and Rita through August and will allow more families to qualify for aid. That program was set to expire on Feb. 28.

The president called the group of urban chief executives to the White House for a pep talk aimed at highlighting the need to get the stimulus money moving quickly into "shovel-ready" projects.

He said a White House team will track how the funding is spent. A report by his budget director laid out specific guidelines that states and cities must adopt for reporting activities financed with the money.

"What I will need from all of you is unprecedented responsibility and accountability on all of our parts," Obama said. "The American people are watching."

But it also served as a forum for criticism of former president George W. Bush's urban agenda. Obama took his predecessor's administration to task, saying it paid too little attention to cities, and several mayors said they welcome a new approach.

"There was just no ongoing relationship with the previous president," said Seattle Mayor Greg Nickels (D), who will take over leadership of the U.S. Conference of Mayors this year.

Nickels recalled attending one previous White House meeting during his seven years as mayor. "The fact that they are listening and willing to hear our concerns is a welcome change," he said.

Nickels said Seattle, which has been hit hard by the economic downturn and housing crisis, hopes to use its stimulus money to speed up a long-planned rebuilding project for a waterfront aqueduct highway and two other major road projects that would otherwise be stalled because of budget shortfalls.

In Columbus, Ohio, Mayor Michael B. Coleman (D) said his city has had to resort to permanent and temporary layoffs and using emergency funds to make up a nearly $100 million deficit this year. He said the city wants to use stimulus money to, among other things, pay for police officers and follow through on several infrastructure projects.

As one example, Coleman pointed to an economic development project that would allow a hospital to expand, adding "a couple thousand jobs" to the local economy.

"This stimulus package will stop the freefall, and it will lead to growth in the future," he said.

As they gathered at the microphones after the meeting, the mayors said they are committed to avoiding the kind of waste that Obama talked about.

But they said they also urged the president to make sure the money does not get caught up in the kind of bureaucratic delays that often slow the flow of funding from the federal government to cities.

"It took 2 1/2 years before any money really hit the city of New Orleans after Katrina," Nagin said. "And I made the point that if this stimulus money travels on the same track, then there will be lots of unspent dollars at the end of this initiative."

Staff writers Dan Eggen and Spencer S. Hsu contributed to this report.

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