Stimulus Plan Expands Government More Than It Stimulates

Bill funds 31 new programs or agencies at a cost of over $136 billion

President Barack Obama has long stated that a top priority for his administration would be fiscal responsibility and an end to government waste-but his support of the current stimulus plan suggests this might be just rhetoric.

The $819 billion ($1.1 trillion if you include the interest payments) American Recovery and Reinvestment Act (ARRA) not only proposes to spend massive amounts of taxpayer dollars, but also to grow the size of government to a large degree. The House stimulus bill includes funding for 31 new programs or agencies, costing over $136 billion over the next few years.

Ironically, the number one item on the president’s fiscal agenda, as presented on the White House website, is to restore fiscal disciple by “enforcing pay-as-you-go (PAYGO) budgeting rules which require new spending commitments or tax changes to be paid for by cuts to others or new revenue.” Yet, the current stimulus bill spends hundreds of billions and plans to pay it off with a loan that will accumulate $350 billion in interest charges.

As part of the president’s strategy to increase government efficiency, Mr. Obama has appointed Nancy Killefer as the nation’s first “chief performance officer,” charged with scouring the government to eliminate ineffective programs and enhance the ones that work. It’s a great idea. Yet, the current stimulus bill provides funding for many untested programs that could significantly add to government waste.

The president has oft repeated a promise that the stimulus will not contain lawmakers’ pet projects, earmarks, and entitlements, and the House plan even says so in the opening. But, the stimulus bill would fund a “comparative effectiveness research program” long desired by new Health and Human Services Secretary Tom Daschle and provide $45 million for ATV trail maintenance.

Here is a list of the stimulus bill’s newly proposed or previously unfunded programs and their cost:

New Program ($ Amount Funded by ARRA)

  • Grants to replace State reductions in school funding ($39 Billion)
  • Grants to replace State reductions in local government services ($25 Billion)
  • Bonus grants for local schools meeting specific education goals ($15 Billion)
  • School construction for K-12 institutions ($14 Billion)
  • Dept. of Energy innovative technology research program ($8 Billion)
  • School Construction for higher education institutions ($6 Billion)
  • Electricity delivery and energy reliability smart grid program ($4.5 Billion)
  • Energy efficiency and conservation block grants ($3.5 Billion)
  • Prevention and Wellness Fund ($3 Billion)
  • Wireless and broadband deployment ($2.825 Billion)
  • Energy retrofit grants for elderly, disability, and Sec. 8 housing ($2.5 Billion)
  • Health information technology ($2 Billion)
  • Youth summer jobs program ($1.2 Billion)
  • Dept. of HHS comparative effectiveness research ($1.1 Billion)
  • Grants to institutions for energy sustainability and efficiency ($1 Billion)
  • Advanced battery loan guarantee program ($1 Billion)
  • Advanced battery manufacturing ($1 Billion)
  • Green jobs and emerging industry training ($750 Million)
  • Neighborhood stabilization grants for non-profits ($750 Million)
  • After school feeding program ($726 Million)
  • Federal government vehicle fleet replacement ($600 Million)
  • Dept. of Energy institutional loan guarantee program ($500 Million)
  • Waste energy recovery incentive program ($500 Million)
  • Small Business Association direct and guaranteed loans ($426 Million)
  • Department of Energy Advanced Research Project Agency ($400 Million)
  • Alternative fueled vehicles pilot program ($400 Million)
  • Broadband data and deployment ($350 Million)
  • Transportation electrification recovery program ($200 Million)
  • National Science Foundation advanced research facilities modernization ($200 Million)
  • Impact Aid School construction ($100 Million)
  • Charter school construction ($25 Million)

Total Spending: $136,552,000,000

The proposed stimulus plan does not make government more efficient or fiscally responsible; it only adds to the bureaucracy. President Obama has said he wants to create three million jobs, but 600,000 of those would be new government employees, according to his January 3, 2009 weekly address. If the president wants to make government more efficient, the first step is not hiring over half a million new workers.

Instead of spending on these new projects, President Obama and Congress should be cutting taxes and looking for ways to utilize the private sector. Instead of spending $600 million to buy alternative energy vehicles for the federal government, the administration could use a managed competition process whereby private firms would bid to provide vehicle fleet services, potentially bringing down costs and increasing service quality.

The number of new programs and spending increasing the size of government goes against everything President Obama has committed to over the past two years in running for office. It ignores fiscal responsibility and discipline and counteracts any good the chief performance officer could do. The president should tell the Senate, as it picks up the debate, that he will not support the stimulus so long as it so drastically increases the size and role of government.

Anthony Randazzo is a policy analyst at Reason Foundation. An archive of his work is here. Reason Foundation’s government reform research and commentary is here.