Commentary: Celebrating One of the Recovery Act's Legacies: Transparency
Feb. 17 marked the one-year anniversary of the American Recovery and Reinvestment Act, commonly called the Recovery Act. Both political parties celebrated the occasion with partisan attacks. Democrats heralded the act as having saved the nation's economy, while Republicans savaged it for being an expensive government program with little to show by way of jobs. While the two parties can argue over how effective the act actually has been, both can agree on one thing: the lasting legacy of the Recovery Act’s transparency provisions.
While the act might have included too many tax cuts, too few tax cuts, or not enough infrastructure projects, or the Democrats might have undersold the stimulus, or oversold it, the one thing that cannot be denied is that the act has substantially advanced the cause of fiscal transparency. While the act is far from perfect, without it, advocates would have nothing to gripe about. The debate would be stuck on whether timely recipient reporting is a feasible goal or not.
In this sense, the Recovery Act provided a convenient pilot program for fiscal transparency. Now, one year later, the act has not only proved that broad-based recipient reporting is feasible, it has shown that the reporting is useful. By showing how multiple levels of recipients (although not all levels of sub-recipients) have used their federal funding, the Recovery Act has provided the government and its citizens an unprecedented ability to see where its money has gone.
There are also the Agency Reports, which provide weekly updates of spending levels for every Recovery Act program. These reports have received very little attention and are largely overshadowed by the recipient reports. But these agency reports, along with the agency and program plans, provide citizens with a timely snapshot of what the federal agencies are doing. These reports, if they were presented better and expanded to include all federal spending, could evolve to become powerful transparency tools by linking spending and performance measures.
This is not to say that the act is without flaws. As mentioned before, the reporting requirements only extend to second-tier recipients, not all recipients, limiting the reach of the act's transparency. Despite new guidance from the Office of Management and Budget (OMB), recipients are still left to decide what constitutes a "full-time equivalent" job, making it difficult to compare jobs across states and industries. Moreover, due to the way the data are collected, it is next to impossible to add reports from one quarter to another, making it extremely difficult to track cumulative spending or jobs. Add in that Recovery.gov does not effectively display the recipient reports, nor does it link the recipient data to other federal spending data sources such as USAspending.gov. Finally, beyond the information collected about jobs, there is little in the way of performance data or information about who benefited from the stimulus spending.
More importantly, the act is hobbled by bad data quality, a problem which plagues many government datasets. The first round of recipient reporting resulted in many news articles about bad data, from phantom congressional districts to recipients who did not understand how to count jobs created or saved under the act. But the problems with data quality go further than that and include issues such as incorrect addresses, bad unique company identifiers, erroneous dollar amounts, and other data entry issues. These data quality problems can serve to undermine support for the act itself and future federal spending if the public believes the government is being less than fully honest about how it spends taxpayer dollars.
Transparency under the Recovery Act is also hobbled by limited disclosure. Only about one-third of stimulus spending is disclosed. None of the details about the $288 billion in tax breaks or the $224 billion in entitlement spending will be disclosed through Recovery.gov. We will never know who benefited from the tax cuts, for example.
Despite these problems, the act has shown that there is a demand for spending transparency. At its height, Recovery.gov, the act's homepage, had millions of visitors a day and still receives significant levels of traffic. Journalists and analysts, in addition to average citizens, routinely use the site as a resource. The site could benefit from improvements, but it is a marked departure from the status quo and will serve as the starting point on the road to better fiscal accountability, following a pattern established by USAspending.gov.
The Federal Funding Accountability and Transparency Act of 2006, which created USAspending.gov, helped advance federal spending transparency. When FedSpending.org, OMB Watch's first attempt at a federal spending website and the basis for USAspending.gov, was first released, it relied solely on existing databases that were out of date; now, USAspending.gov has more timely spending data from many federal agencies and is an important part of federal fiscal transparency. Appropriately, the focus for USAspending.gov has shifted to improving data quality and complying with the law’s requirement to collect sub-recipient information. Indeed, only four years after its authorizing legislation, USAspending.gov will certainly be a vital part of any spending transparency reform that comes from President Obama's recent Open Government Directive.
As time passes, and the transparency community moves on from the Recovery Act to new challenges, open government advocates from both sides of the aisle will likely look back at the act as continuing USAspending.gov's transparency mission. The act is not perfect, and it may be a contentious political issue, but its effect on the drive for an open, accountable government is a real reason for celebrating its anniversary.