Stimulus aid favors social programs
SACRAMENTO (AP) – Remember the “shovel-ready” projects lined up for all that stimulus money? It turns out social spending, more than construction, is hitting pay dirt in the huge federal effort to turn the economy around.
The public face of the stimulus package has been the worker in a hard hat, getting back on the job to rebuild the nation’s infrastructure.
Earlier this spring, for example, California Gov. Arnold Schwarzenegger appeared before the cameras at a job site along a freeway east of San Francisco. He declared that the stimulus-financed project would provide paychecks for 235 construction workers who otherwise would have to “stand in the unemployment line.”
The reality of how the vast majority of the stimulus money will be spent is quite different, and that raises questions about how much help the Recovery Act achieved by President Barack Obama will be to the economy in the long run.
Most of the roughly $300 billion coming directly to the states is being funneled through existing government programs for health care, education, unemployment benefits, food stamps and other social services.
“We all talked about ‘shovel-ready’ since September and assumed it was a whole lot of paving and building when, in fact, that’s not the case,” said Chris Whatley, the Washington director of the Council of State Governments, a trade group for state governments. He estimates states will get three times more money for education than for transportation.
Two-thirds of recovery money that flows directly to states will go toward health care.
By comparison, about 15 percent of the money is for transportation, including airports, highways and rail projects, according to Federal Funds Information for States, a service of the National Governors Association and the National Conference of State Legislatures.
Overall, two-thirds of the stimulus program will go toward tax cuts, relief for state budgets and direct payments to the unemployed and others hurt by the recession, part of the administration’s desire to provide immediate fiscal relief.