Economic-Stimulus Cash Is Moving Slowly

Some government departments are facing a tougher time than others disbursing economic-stimulus money.

Vice President Joe Biden, in his first quarterly report on the status of the $787 billion program, said "significant progress has been made toward implementation." The administration said it is on target for 70% of the money in the plan to be used by the end of 2010.

A little more than $28 billion had been spent through April, according to federal department reports. An additional $60 billion has been sent out, but the recipients haven't spent it yet.
Stimulus Spending by State

How some major areas of the stimulus will be shared among the states.

With the exception of two agencies, none have reported more than 3% of the funds allocated to them as having been used by recipients. The slow speed reflects the often complex procedures set out by the program for both government agencies dispensing money and the governors, municipal authorities, nonprofits and private companies getting it.

The stimulus plan contains about $500 billion in spending and $287 billion in tax breaks. The Council of State Governments, a nonpartisan network, said that of the $500 billion, about $230 billion is going to the states; some $100 billion is being given out as grants for which nonprofits, universities and local and state governments can compete; and $170 billion is for federal departments to spend themselves.

Two federal departments—Health and Human Services, and Labor—have already made more than two-thirds of their funds available, mostly by making large payments to plug holes in Medicaid budgets and unemployment funds. More than half of the money they sent out has been spent.

The Transportation Department has also gotten out a lot of the money under its jurisdiction, mostly because states already had lists of projects they wanted to get done. The stimulus program's distribution process only required such projects to be approved by the department.

The department has approved 3,000 projects so far, including resurfacing a highway in Merrimack, N.H., and replacing a bridge over Big Sandy River in Carroll County, Tenn. It has made a total of $10 billion, about a quarter of its funds, available to the states, which reported that $34 million has been spent so far.

"All of our money's going to go out the door this year," Transportation Secretary Ray LaHood said in an interview.

Other agencies are facing a lengthier process in allocating money. The Energy Department is set to allocate $45 billion, almost as much as Transportation, but it has only disbursed about 8% of its money, mostly to increase the size of existing contracts for nuclear cleanup projects.

States seeking to get more funding for existing energy programs, such as home-weatherization projects, must submit new applications that address extra requirements of the economic-recovery act. Meanwhile, the Energy Department is moving to get new programs up and running, including some grants for renewable-energy research. And it has to finalize criteria for applicants of some $13 billion of research and development funds, which are expected to attract thousands of applications.

Matt Rogers, the agency's newly appointed senior adviser on implementing the stimulus plan, said the Energy Department has been hiring new staff and reassigning existing employees, as well as recruiting volunteers, to prepare for an expected flood of paperwork from both states and private grant applicants every week until Labor Day. "We now feel like we're in pretty good shape for it," he said.

The Energy Department has struggled in the past with running big programs, and some government agencies have taken up to a year to award money after a grant competition closes. "That's not happening on my watch," Mr. Rogers said. "There's more staff to handle it and frankly, it's really important."

Chris Whatley, the Washington director of the Council of State Governments, said many states are focusing on how to use the money they have received from federal agencies. But some private companies are becoming anxious over what they see as the government's slow pace in opening up grants for competitive bidding.

"Many of them are hoping the economy gets better so they can just go get venture capital and don't have to worry about any of this," said Isaac Seliger, owner of Seliger & Associates Grant Writing, a Seattle-based consulting firm that advises applicants for government grants, including in the energy sector.