In a new article in the Wall Street Journal, Louise Radnofsky traces the bureaucratic stranglehold of federal, state and local governments that has directly hindered the spending of the Obama administration’s “stimulus” funding from the federal government. Specifically, she examines the malaise resulting from the roadblocks to insulate homes in Detroit because of restrictions from the U.S. Department of Energy, U.S. Department of Labor, White House Office of Management and Budget, Michigan Department of Human Services, etc.
“The Motor City has lots of drafty houses and tens of thousands of unemployed people. So when Congress proposed spending $5 billion to insulate homes as part of the stimulus bill, Detroit got excited. The director of the city agency managing the program advertised for construction companies before the legislation even passed.
“But on the same day in March 2009 that Shenetta Coleman picked up applications from 46 companies, she received an email from the Michigan Department of Human Services telling her she couldn’t award work to anyone.
“The problem: Ms. Coleman hadn’t met requirements for her advertisement. Those included specifying the precise wages that contractors would have to pay, and posting the advertisement on a specific website. There were other rules—federal, state and local—for grant and contract-award processes, historic preservation and labor standards.
“The bureaucratic obstacles Ms. Coleman hit took more than a year to clear. Some were mandated by the stimulus bill, the same legislation that was supposed to rapidly create jobs. For example, there is a union-backed provision that requires that weatherization workers receive the prevailing wages in the area.
“Eighteen months after the bill was signed into law, Michigan has weatherized 10,194 homes with stimulus dollars. It has 23,216 more to go before it meets its target.
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“The nonpartisan Congressional Budget Office estimates that the stimulus lowered the jobless rate by between 0.7 percentage point and 1.8 percentage points during the second quarter of 2010, compared with what the rate otherwise would have been. But for voters, those figures are being dwarfed by the actual jobless rate of 9.6% in August.
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