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Deron Lovaas’s Blog

Learning from the Recovery Act: A Model of Government Accountability and Transparency

Deron Lovaas

Posted October 25, 2012 in Moving Beyond Oil, U.S. Law and Policy

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Yesterday I flipped through the Philadelphia Inquirer to see what's happening in the city of brotherly love, and lo and behold there's a piece about a new bike trail next to the Schuykill River. The project was entirely paid for by federal dollars, specifically by the Transportation Investments Generating Economic Recovery (TIGER) program, and more specifically in the first round of grants from that program.

In fact, I can page through pdfs of the various investments for the past four fiscal years featuring fact sheets about each project complete with the price tag, the sponsor, the purpose and other vital information. And then if we pull the lens back and look at the one-stop-shopping-for-information landing page for all the investments included in the American Recovery and Reinvestment Act of 2009 (ARRA, better known as the Recovery Act), it's clear that this kind of information is available for all kinds of projects funded by this landmark piece of legislation.

The front page of the site is unusual for government. It has an interactive map showing where investments have been made on a map, what categories (tax relief, grants/contracts/loans or entitlements) in bar graph with more detail available represented in user-friendly graphic form, and searchable databases based on recipients, zip codes or other parameters. It has success stories, and jobs created due to the law, and it even has a twitter feed. This site easily trumps the opacity of most other government sites, delivering taxpayers like you and me with the opportunity to see the big picture and to zero in on work in your neck of the woods.

This law may be known to you by another name: The much-maligned stimulus act, a bill that has been lambasted for years as a vehicle for cronyism and back room dealing. But this looks more open-to-scrutiny than the vast majority of government (and even corporate) web sites out there. What gives?

Turns out the Recovery Act deserves a better reputation. To find out more, I highly recommend Mike Grunwald's book The New New Deal, a painstakingly researched book about the passage and implementation of this law. The first thing to remember is that it is a BIG law -- according to Grunwald it's 50 percent bigger than the New Deal in constant dollars at about $787 billion. It injected much-needed capital into an economy that was in the midst of imploding as trillions of dollars worth of our wealth evaporated (I know my home value took a huge hit). Grunwald points out that the Congressional Budget Office (CBO) and private forecasters estimated the law added more than two percent to GDP (pdf of CBO report is here).

Much of the law relieved burdens for middle- and low-income people via tax benefits and help with Medicaid, and helped states to make ends meet as they faced steeply declining tax revenues. And the law also contained a lot of investment in energy and transportation infrastructure. It helped to boost renewable energy and address the deferred repair glut in our transportation system. Projects were built across the country, providing much-needed economic activity as well as a foundation for future growth.

The most remarkable thing about this law, though, is just how openly it's been implemented as evidenced by the recovery.gov site as well as analysis of spending. Earl Devaney, a former Secret Service officer who exploded the Jack Abramoff lobbying scandal, was hired as a watchdog for the law. Grunwald quotes his final assessment:

According to Devaney and other watchdogs, Recovery Act fraud has been virtually nonexistent; Devaney thinks there were just too many eyeballs on the stimulus money; any minimally intelligent criminal would go after different money. Outside experts had warned that 5 percent of the stimulus could be stolen, but by the time Devaney finally got to retire at the end of 2011, the RAT [Recovery Accountability and Transparency] board had documented only $7.2 million in losses, about 0.001 percent.

"It's been a great surprise," Devaney says. "We don't get involved in politics, but whether you're a Democrat, Republican, communist, whatever, you've got to appreciate that the serious fraud just hasn't happened."

People don't appreciate that, because fraud that doesn't happen gets about as much media attention coverage as planes that land safely.

 

He also quotes Danny Werfel of the Office of Management and Budget (OMB) who "was baffled at by the Recovery Act's low incidence of fraud" and wondered aloud about how to "bottle" what was done so it can be used with other government programs. Not only was fraud virtually nonexistent, as Grunwald says the law met the ambitious deadlines set for it and saved enough money during implementation that it helped fund construction of three thousand additional projects! On-time, under-budget, transparent. How about applying that standard to all government spending, as Werfel proposes?

It's not blemish-free, of course. Warts include Grunwald's account of a "turkey farm" at the Department of Energy, a cadre of career bureaucrats who resisted aggressive implementation of the law because it ruffled their lazy government routines. I worked in government for a brief time in the 1990s, and that's what I found most frustrating about the experience: There's an annoying, if small percentage, of people who land those jobs because they are relatively cushy and secure. So they don't exactly work very hard. Grunwald calls them turkeys, we called them deadwood. 

But these bureaucratic hurdles didn't prevent the overall outcome, namely implementation that is a model of effectiveness and efficiency.

And now we need to ramp up the pressure on all government programs be similarly open to public scrutiny. We need to demand that they be managed based on performance and results. Thankfully there are organizations like U.S. PIRG out there that are framing this as a race, especially for state governments like Maryland's, where I used to work: Who can be more accountable? You can see how your state ranks in their latest score card here. As information and communications technology improves, there's no excuse for all levels of government -- federal, state and local -- to remain opaque to those of us who entrust them with our hard-earned dollars.

Accountability and transparency, using ever-improving technological tools, must become the new norm for government, including the massive transportation program. Taxpayers deserve no less, and it's time for public officials who work for us to deliver.

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Switchboard is the staff blog of the Natural Resources Defense Council, the nation’s most effective environmental group. For more about our work, including in-depth policy documents, action alerts and ways you can contribute, visit NRDC.org.

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