Focus on Implementation Lacking in Hearing on Recovery Act

On July 8, the House Committee on Oversight and Government Reform held a hearing on the implementation of the Recovery Act to date. The hearing included testimony from a number of government officials and raised concerns that some members of Congress may lack a clear understanding of the challenges of implementing and tracking a large-scale economic recovery effort. As implementation progresses and new decisions are made, better oversight of these developments will become even more important.

The hearing, "Tracking the Money: Preventing Waste, Fraud and Abuse of Recovery Act Funding," featured testimony from Office of Management and Budget (OMB) Deputy Director Rob Nabors and Acting Comptroller General Gene Dodaro, as well as three governors – Martin O'Malley (D) of Maryland, Ed Rendell (D) of Pennsylvania, and Deval Patrick (D) of Massachusetts.

Despite the opportunity to probe the panelists on many questions that remain about Recovery Act implementation and some of the finer details of the reporting system outlined in recent OMB guidance, members of the committee generally focused their attention elsewhere.

With the possibility of a second stimulus package framing the hearing, many representatives focused their questions on the merits of the Recovery Act itself, rather than its implementation. Several of the Republican committee members, for instance, pounced on the job creation numbers announced at the hearing. Nabors, at different points in the hearing, mentioned that the recovery effort has created or saved 150,000 jobs (according to the most recent Council of Economic Advisors estimate), and that, according to OMB, federal agencies have spent $57 billion of the Recovery Act funding thus far. Using these numbers, several members of the committee asked Nabors why each job created or saved cost the government roughly $400,000. Nabors attempted to rebut this argument by pointing out that those figures were measured at different times and that the act is having more of an effect on the economy than simply creating jobs. Nabors also noted that simply dividing the total disbursements by the number of jobs created is far too rudimentary a calculation to judge the full impact of the Recovery Act.

Many of the Democrats' questions revolved around defending the content of the Recovery Act, culminating in an exchange between Rep. Gerry Connolly (D-VA) and Rendell, in which Connolly asked a rapid string of seemingly leading questions designed to get the governor to say how great the Recovery Act has been for Pennsylvania. Rendell spent most of his testimony on that very subject, as well as on the perceived need for a second stimulus bill focused on infrastructure projects. The experiences Rendell has amassed as a governor charged with allocating and tracking Recovery Act spending went largely unaddressed.

Despite the focus on the Recovery Act itself, some committee members did ask questions related to implementation. In particular, Rep. Edolphus Towns (D-NY), the chair of the committee, highlighted the lack of a definition for a full-time equivalent (FTE – the number of hours that constitute a full-time job) when tracking Recovery Act job creation. This is an issue the Coalition for an Accountable Recovery (CAR) has raised before. Currently, OMB leaves this definition up to the recipients receiving Recovery Act funds, which means each state or other recipient could potentially have a different measurement for full-time jobs. Unfortunately, Nabors essentially said that OMB would not be creating any standards to define an FTE.

O'Malley also touched on issues of implementation. He showcased his state's recovery website, which is one of the most advanced state Recovery Act sites. O'Malley, building off of his experiences with CitiStat in Baltimore and StateStat in Maryland, created a website where citizens can view information on the state's stimulus activities mapped out and searchable by location.

The day after the hearing (July 9), the Recovery Accountability and Transparency Board (Recovery Board) announced it had awarded a $9.5 million contract to redesign the federal website www.recovery.gov to Smartronix, a Maryland-based information technology company. The $9.5 million covers work between now and January 2010, but the contract could be worth up to $18 million over the next five years if all options are exercised. Details of this contract award, including a copy of the contract, have yet to be disclosed, leading many advocates to question the large cost of the contract and what value the government will receive. In response to a CAR request to the government to post the contract online, the Recovery Board noted that the General Services Administration prohibits such disclosure until after the expiration of a bid protest period. Apparently, the Recovery Board will make the contract available after that period.

On July 13, more details about Recovery.gov were released when Earl Devaney, chairman of the Recovery Board, stated that the public will have access to recipient reporting data in its raw form on Oct. 11, one day after the first recipient reports are due. This access is a positive development, as many advocates worried the Recovery Board would prohibit releasing data to the public until after the 20-day correction and revision window had closed. Although this development will ensure public access to the raw data reported by Recovery Act recipients, it may also lead to confusion in the media and the public during the correction period as Recovery Act information is changed. Methods for handling error correction updates have yet to be worked out.

These recent developments, including the lack of information on the Smartronix contract award, make future hearings on the implementation of the Recovery Act even more important. Advocates and observers, including CAR, expressed hope that future Recovery Act oversight hearings will focus on delineating the systems and requirements for reporting information about the Recovery Act and where those systems and requirements are falling short of expectations about the transparency of Recovery Act spending.

back to Blog