Stimulus or Wish List?

Stimulus or Wish List?

The federal stimulus often neglected the areas hit hardest by the recession.

Read Time:
3m 2sec

During the bleakest days of the recession, in February 2009, President Barack Obama signed the $787 billion American Recovery and Reinvestment Act (ARRA) into law. Congress and the president promised relief for the unemployed and other down-on-their-luck Americans.

But according to political scientists James G. Gimpel and Frances E. Lee of the University of Maryland, College Park, and Rebecca U. Thorpe, of the University of Washington, the areas of the country hit hardest by the downturn actually got a smaller share of the discretionary portion of the federal goodies than more fortunate regions.

Most of the stimulus money wasn’t geographically targeted, going for food stamps, tax cuts, and other general purposes. The authors focused on the remaining $308 billion. That works out to $917 per capita for the average county. But some of the worst-hit regions fared poorly. In Florida, which was wracked by home foreclosures and unemployment, all but three counties received less than the average amount of stimulus money per capita. The Midwest, where industry struggled to stay afloat during the recession, also largely missed out.

What was at work? Despite Republican charges of pork barrel politics—conservative talk-show host Rush Limbaugh dubbed the bill a “porkulus” measure—the authors found little evidence to support this characterization. Democratic legislators on powerful committees didn’t succeed in bringing home undue quantities of the bacon, though overall there was “a distinct tilt toward counties that were stronger for the Democratic Party in 2008.” The bluest-hued counties received about $35 more per person in funding than counties that had gone heavily Republican.

The broader reason why spending went haywire, the authors believe, is because Democrats used it to fund their pet policy initiatives. Ordinarily, progress on fronts such as infrastructure repair and scientific and medical research is painfully slow. ARRA offered an all-too-tempting “policy window” to change that.

Democrats showered the National Institutes of Health with $10 billion of new funding and the National Science Foundation with $3 billion. They created more than 30 new federal programs, leapfrogging the normal congressional authorization process. President Obama homed in on highways. “Because of this investment, nearly 400,000 men and women will go to work rebuilding our crumbling roads and bridges, repairing our faulty dams and levees,” he declared when he signed the stimulus into law.

Not surprisingly, Gimpel, Lee, and Thorpe found that counties that already had lots of roads and other public installations profited handsomely, harvesting an average of $50 more per capita than less endowed counties. “Prioritizing infrastructure favored areas with access to interstate highways, bodies of water, and national parks, regardless of local economic circumstances.”

Counties with large numbers of people with PhDs raked in a $40 bonus per person. Hubs of clean energy development and medical research were also cash magnets. The irony, the authors point out, is that “science and technology sectors were more resilient to the economic downturn than was the rest of the private sector.”

Geographically, the infrastructure and research windfall fell most heavily in the Mountain West and the Plains states, often in areas largely spared by the recession.

There’s no doubt that ARRA stimulated the national economy. But all the talk about targeting the hardest-hit parts of the country was misleading. The stimulus, the authors conclude, “brightly illuminates the politics of taking advantage of crisis.”

THE SOURCE: “Geographic Distribution of the Federal Stimulus of 2009” by James G. Gimpel, Frances E. Lee, and Rebecca U. Thorpe, in Political Science Quarterly, Winter 2012–13.

Photo of ARRA-funded employee testing fuel efficiency sensors at Argonne National Laboratory in Illinois by Argonne National Labaratory via flickr

More From This Issue