Spending Spree

19 March 2014

This month marks the fifth anniversary of the Recovery Act, the government’s attempt to create new jobs and spur economic growth at a time when the economy seemed very bleak. Congress and President Obama issued USD 787bn in tax cuts, funding for entitlement programs (such as unemployment benefits and funding for federal contracts), grants and loans, which was later upped to USD 840bn.

There was one more major goal as part of the Recovery Act, to "foster unprecedented levels of accountability and transparency in government spending." To achieve this goal, the Act requires recipients of Recovery funds to report every January, April, July and October on how they are using the money. All the data is posted on Recovery.gov so the public can track the Recovery funds.

While the tunnelling industry benefitted from the Recovery Act -- funds were directed to various projects, for example the Caldecott Tunnel's fourth bore in California, and development for the state's high speed rail program -- it remains to be seen exactly what benefits are gained not by the tunnelling industry, but the wider population as well, from the transparency efforts.

The very idea of federal spending, let alone the Recovery Act's behemoth sum, horrified many who already see the government as bloated and overreaching. It's fair to say there exist people in the tunnelling industry that share this opinion.

However, government spending is good for the industry (and even the country as a whole). It's absolutely necessary for all involved in underground construction to thrive. The government, whether at the federal, state or municipal level, must be more efficient, but that does not mean the government needs to be smaller. And that's not to say the government needs to be bigger, either. There is no one-size- fits-all solution.

Many areas of government need expansion, budgets doubled or tripled, while others do need to be downsized or eliminated. How does a government become efficient, effective and appropriate in size and reach? While transparency is important, it's how the information is used that makes a difference. Recovery.com nicknamed its list of recipients who fail to submit required quarterly spending reports the "Wall of Shame." Each quarter, after the reports are filed, the Office of Management and Budget provides the Recovery Board with the names of recipients who failed to comply with portion of the Recovery Act and it is published. So what?

More than a year into the program, in April 2010 the President issued a directive to agencies that distribute Recovery funds, to "wherever authorised and appropriate'' terminate awards, reclaim funds and initiate suspension and debarment proceedings against violators.

That worked much better. In the quarter ending December 31, 2010 only 418 reports were not submitted, down from 4,359 in September 2009.

Transparency is needed, but it's only one of a vast array of solutions that must come together. Among them, the US citizenry must ensure their government isn't beholden to corporate interests, Wall Street and a corrupt congress. For government spending to be responsible, it will cost money.