Big chunk of economic stimulus yet to be spent by state, local governments

By Alec MacGillis
Washington Post Staff Writer
Saturday, August 14, 2010

As Americans puzzle over why the economic stimulus package enacted more than a year ago has failed to restore vigorous job growth, one explanation has emerged from new reports: A lot of the money is not yet out the door.

Detroit is struggling with 14 percent unemployment, but as of June 30 the city had spent less than 1 percent of the $8.8 million in stimulus funds it received for energy-efficiency initiatives. In budget-strapped Arizona, Phoenix has spent even less of its $15.2 million, and in hard-hit South Florida, Fort Lauderdale has spent $66,000 of its $2 million.

The $862 billion package was divided roughly in thirds among tax cuts, aid to states and the unemployed, and investments in infrastructure, health care and other areas. The first two have delivered most of their boost, but much of the investment spending is moving far more slowly. At the end of July, nearly 18 months after the stimulus passed, more than half of the $275 billion in investments had yet to be spent.

Underlying the slow pace is a defining tension: Officials want to get money out the door to jolt the economy but want to spend it carefully enough to meet long-term policy aims -- and avoid headlines about waste or fraud.

(More here.)

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