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For Stimulus Package, Bureaucracy Is Taking Time and Money

Vice President Biden and Health and Human Services Secretary Kathleen Sebelius highlight stimulus spending at a project in Overland Park, Kan.
Vice President Biden and Health and Human Services Secretary Kathleen Sebelius highlight stimulus spending at a project in Overland Park, Kan. (By Charlie Riedel -- Associated Press)

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By Alec MacGillis
Washington Post Staff Writer
Friday, June 12, 2009

Spending $787 billion not only takes time, it turns out, it also costs money -- and that's good news for Washington.

To send out $14 billion in supplemental checks to most Social Security recipients, the federal economic stimulus package passed in February included $70 million to cover administrative costs -- much of it overtime for workers handling the checks and queries over the phone.

The Health Resources and Services Administration has hired 134 people to oversee $2.5 billion in spending and has spent $326,000 on new workstations at its Rockville offices.

The 50-person agency -- with a budget of $84 million -- created to audit the spending just spent $204,000 to outfit its offices in downtown Washington.

And the Transportation Department plans to hire two people at its headquarters to help estimate the number of jobs being created by transportation infrastructure spending. This is despite job estimates that will be provided by the states.

With the national unemployment rate rising last month to 9.4 percent, a growing criticism is that the stimulus package is not having the desired effect of creating jobs, a perception President Obama and Vice President Biden addressed this week with a vow to accelerate the spending. One reason the full weight of the money has not been felt faster across the country, though, may be that a bureaucracy takes time -- and money -- to gear up in the capital.

At one level, even spending on administrative overhead meets the most basic purpose of the package: to get money into the economy. But of the areas that most need a boost, greater Washington is pretty much at the bottom of the list. While unemployment rises elsewhere, it has declined in the region for the past two months, to 5.6 percent, the lowest of any major metro area.

Washington is getting a big benefit as it is -- the stimulus package includes billions to erect and refurbish federal buildings, most notably $448 million for a new complex for the Homeland Security Department. But the legislation's effect on the bureaucracy probably will be the biggest boon. The region has already added 9,000 government jobs compared with a year ago.

"We are better off than almost anywhere else," said John McClain, an economist at George Mason University. "And in federal employee jobs, we have a growth that we haven't seen in a while."

Rep. Eric Cantor (Va.), the second-ranking House Republican, said the money trapped in the bureaucracy is another sign of how ill-conceived the package was: "Anytime you go use the government as the funnel through which spending goes, you're going to have waste."

Sen. Tom Coburn (R-Okla.) struck a similar note. "Growing the government won't put people back to work," he said. "Federal agencies should be spending less time shopping for furniture and more time thinking about how to create the right environment for economic growth."

But Obama administration officials say the money is being spent precisely to prevent the kind of waste and abuse that critics say is inevitable. They note that it was Congress that set aside $350 million for oversight, money that is now being spent by the new Recovery Accountability and Transparency Board and by the Government Accountability Office, which has dozens of newly hired auditors who are fanning out nationwide to scrutinize spending that is barely underway.

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