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US: Recovery and Reinvestment, p1 - 27

by Cat Tue Jan 27th, 2009 at 01:47:10 AM EST

The "American Recovery and Reinvestment Act of 2009" was published 23 Jan 2009. The bill is organized in two "divisions," each subdivided by "titles" which categorize related provisions by subject matter, "subtitles." The provisions within a subtitle are further classified by named and numbered "section."

  • DIVISION A -- APPROPRIATION PROVISIONS, of which 13 titles
  • DIVISION B -- OTHER PROVISIONS, of which 7 titles

The greatest challenge to reading a bill is locating citations of language introduced in sections elsewhere in the bill or to other public laws. Since I don't employ either an associate or legislative aide, I'll be judicious in my selections. If you choose to read either the pdf or online text, I recommend the law.cornell.edu and thomas.gov search engines for your companions.


The first point of order is that all appropriations named in this bill are "emergency designations" of the fiscal year (FY) 2009 budget, beginning 1 October 2008. That phrase (Con. Res. 21, 110th) is related in spirit to the serial "supplemental" appropriations to prosecute the War on Terror in Iraq, during FY 2003 to the present. That is "in addition to." What is distinctive about its purposes, moreover, is the appeal to "pay-as-you-go principles" of accounting which authorize monies to be withdrawn from "the Treasury not otherwise appropriated for the fiscal year ending September 30, 2009." What an appropriate allusion to the plight of couch-bound savers across the USA. All funds appropriated will remain available for award until September 30, 2010 (§ 1105).

Title 1, Subtitle A
§ 1102. Preference for Quick-Start Activities
"Quick-Start" qualification of investment projects has already been promoted by the press to "shovel-ready" contractors' proposals or discretionary programs presumed to have languished in federal agencies during Mr Bush's administration. Here the term means only speed of reporting expenditures: 50% within 120 days of award. Proof of concept is not a prerequisite for application.

§1103. Requirement of Timely Award of Grants
Monies awarded are grants not loans. Grants are not repaid, but qualifiying proposals must forecast "job creation and economic benefits." Classes of awards describe a schedule of grantmaking, presupposing some number of applicants renewing program funding FY 2008.
(a) Formula Grants -- funds available within 30 days of the bill's enactment.
(b) Competitive Grants -- funds available within 90 days of the bill's enactment.
(c) New Programs -- an extension of the application period by 30 days for unfunded FY 2008 grantees and new proposals.

§1104. Use It or Lose It Reqirements
A "Deadline for Binding Commitments" by grantees is reiterates "Quick-Start," further directing that remaining funds be obligated within 2 years of award. If grantee fails to certify such contracts assigned, balance of the grant will be recovered by the feds and allocated elsewhere. The requirements of this section apply only to grants awarded by the following agencies: EPA, State and Tribal Assistance; DoT and FAA, Aid for Airports; DoT and FRA, Capital Assistance for Intercity Passenger Rail Service; DoT and FTA, capital investment; DoT and FTA, fixed guideways [highway medians]; DoT and FTA, transit capital assistance; HUD, Public Housing Authoritis (PHA) and Indian housing capital fund, "Sec.8 Assisted Housing Energy Retrofit," housing block grants, "HOME Investment Partnerships Program," "Self-Help and Assisted Homeownership Opportunity Program." HOPE for Homeowners is missing-in-action. Again!

Prohibitions on Grant Uses
§1109 prohibits funding for "any casino, aquarium, zoo, golf course, or swimming pool." §1110 prohibits funding for construction, alteration, maintenance or repair of any public building or work with imported iron and steel: Is that "protectionism"? No, there are a few "exceptions" and "waivers" tossed in. And note, the definition of "public building" and "public work" is given in the "Buy American Act," a bill passed in 1933 still awaiting improvements (41 U.S.C. § 10). §1112 is a big finger to Mr. Blagojevich: Wow, this sections prohibits distribution of any Recovery funds to the State of Illinois as long as he "holds the office of Governor." That's a very classy stand on corporate responsibility by comparison to the uninterrupted, unaccounted flow of filthy lucre to CIA affiliate prison "governors" in foreign territories.

Mish's Boogie Man
Sadly, §1111 requires all contractors and subcontractors on projects funded in whole or in part by the federal government to be "paid wages at rates not less than those prevailing on projects of a character similar in the locality as determined by the Secretary of Labor." Gotta feed the banksters, dude, after an honest day's work. Accordingly, §1114 requires grantees' enroll in the E-verify employment system maintained jointly by DHS and the Social Security Administration (8 U.S.C. 132).

Persistent Poverty Counties
§1113 earmarks 10% of USDA "Rural Development Program" budget to dirt-poor townships. Believe it or not, USDA has had an unusual record in disbursing venture capital to private firms operating utilities, say telecom carriers, within metropolitan tracts --exurban developments. Congress here defines "persistent poverty" as "20 percent or more" of a population reporting poverty-level income "over the past 30 years." Mighty white.

"Accountability" Budget
All told fixed costs of Recovery and Reinvestment, the bill appropriates $233.5M, or 2.83E-4 percent of the total projected, for the agencies' program management. Variable costs are created in §1106 which sets aside and additional 0.5% of each award for expenses. That pool of funds is available for distributions until September 30, 2012. §1108 funds GAO salaries and expenses for "oversight" in the amount $25M. The Comptroller General is authorized to examine any grantor or grantee records bimonthly and report audits at Recovery.gov. §1107 funds the budget of the Inspector General to audit agency grantmaking as follows.

OIG budget by agency, USD millions
USDA22.5Commerce10
DoD15DoEd14
DoE15HHS19
DHS2HUD15
DoJ2DoL6
DoT20Interior15
VA1EPA20
GSA15NASA2
Science Foundation2SBA10
SSA2Corp. for National and Community Service1

Whoa. Hello. Corporation for National and Community Service?
It is a GSE that disburses federal funds into four program areas --service-learning programs for school-aged youth, higher-education service programs, youth corps, and national service demonstration models-- that George H.W. Bush established in the  National and Community Service Act of 1990 (42 U.S.C. 12511). Clinton created the GSE in 1993 to administer AmeriCorp and numerous quasi-public social services agencies dependent on the NCSA in the National and Community Service Trust Act . This integrated named appropriations with FY budgeting and the Charitable Choice amendment to the 1996 Welfare Reform Act entrenched favored earmarks. Unlike the paid employment created by Civilian Conservation Corp in 1933 (the first cohort being "bonus army" protesters), remuneration for social services provided by "volunteers" recruited by these NCSA grantees is ambiguously mandated by subsequent legislation. Nevertheless, federal administration of these expanded to five "focus areas," drawing down general and restricted monies from multiple executive agencies and culminating in the USA Freedom Corp authorized by an executive order (EO 12354) of George W. Bush. Public objection to federal funding of "faith-based" agencies incorporated by the USA Freedom Corp resulted in a Supreme Court ruling which held individual taxpayers had no standing to challenge Executive Branch disbursements, Hein v. Freedom From Religion Foundation (2007). Americans United, an issue-advocacy organization, commented.

The plurality reasoned that, because the source of taxpayers' standing arises from the limitations placed by the Establishment Clause on Congress's power to tax and spend, taxpayer plaintiffs can challenge federal governmental expenditures only when the expenditures have a sufficient link to congressional action.  The plurality determined that the plaintiffs in Hein had no right to sue because the expenditures they complained about were not authorized or directed by any statute or Congressional appropriation, but instead were paid out of general appropriations to the Executive Branch (which could be used for any purpose that the Executive Branch wanted). ...It is Americans United's view that the plurality opinion cannot be read on its own; rather, it must be read in conjunction with Kennedy's separate concurring opinion, which focuses on whether allowing a taxpayer lawsuit to proceed would lead to improper judicial intrusion on internal Executive Branch operations. ...the onus is on Congress to incorporate into appropriations and authorizing statutes specific instructions on the kinds of organizations and services to be funded

Title 1, Subtitle B
Accountability in Recovery Act Spending, Part I.

§1201 ("Transparency Requirements") and §126 establish Recovery.gov as the primary channel for all federal, state, and local government communication of grant notices, awards, and operating statements such as the number of jobs "sustained or created." §1201 describes minimum content requirements excluding proprietary data. §1226 states Recovery.gov "shall be a portal or gateway to key information." Matters Covered will explain "what this Act means for citizens. The materials shall be easy to understand and regularly updated." Furthermore, the "website shall provide a means for the public to give feedback on the performance of contracts awarded for purposes of this Act." I'm not sure I'd want to read the RFP for this gig.

According to §1221 - 1225, establishment of the Accountability and Transparency Board will "prevent waste, fraud, and abuse" of spending under the act. Ironically, this provision creates a NEW cabinet position, Chief Performance Officer. The other six members will be appointed by the President from inspectors and deputies of the DoEd, DoE, HHS, DoT and two other unspecified departments. Together they will ensure prompt, accurate reporting by grantees, verify compliance with competitive bid standards by grantors, summarize GAO and agency inspectors' reporting as well as investigate whatever the GAO and agency inspectors reviewed, evaluate personnel training, submit flash reports (NEW2!) to Congressional committees, and make periodic recommendations to federal grantors on how to prevent "waste, fraud, and abuse."

But that's not all: the Board will publish annual reports (excluding proprietary and classified data) for Recovery.gov publication. Consequently, Congress permits the Board hire an Executive Director (NEW2!) and to procure contractors "to discharge its duties under this Act" not otherwise assigned to staff detailed from other federal departments.

But that's not all: §1229 establishes the Independent Advisory Panel (NEW2!) to advise the Accountability and Transparency Board. Its five members will be appointed by the President in consideration of their "expertise in economics, public finance, contracting, accounting, or other relevant fields." They will recommend to the Board appropriate recommendations to prevent waste, fraud and abuse in federal spending.

Taxpayers' rate for Accountability and Transparency for 12 months? $14M.

No wonder §1227-1228 reiterate the independence and jusisdiction of GAO and agency inspectors.

::

Alrighty, then. So concludes pp1 - 27. Six-hundred-nineteen more to read. I hope you've found this information helpful in preparing future reviews of Recovery.gov. And I hope you know what is exactly going on in your country's Recovery and Reinvestment planning.

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WOW, MT! In addition to your other contributions we are now privileged to have our own legislative analyst, or, perhaps, tour guide.  Thanks for this.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Jan 27th, 2009 at 02:08:36 AM EST
shhh, you're scaring the wabbits.

Say, what do you imagine are the Chief Performance Officer's job discription and expertise?

Bear in mind, the CIO and CTO and CHIT separate offices.

Diversity is the key to economic and political evolution.

by Cat on Tue Jan 27th, 2009 at 11:16:21 AM EST
[ Parent ]
§1103. Requirement of Timely Award of Grants: Monies awarded are grants not loans. Grants are not repaid, but qualifiying proposals must forecast "job creation and economic benefits."
One would hope that the CPO is concerned with evaluation  of those aspects relating to "job creation and economic benefits" that ensue from the awards.  Even if the money goes to hire staff for the grantee whose duties are primarily to provide, uhm, "personal services" for said grantee, it would probably provide more purely economic stimulus than an equivalent amount of tax credits to small businesses, most of whom will be lucky to break even this year.  The Congressional Republican leadership seems totally stuck on this one note.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Jan 27th, 2009 at 08:05:18 PM EST
The Republican leadership in both chambers is demented, pretty much. (somehow over the years though someone like Ensign -gah!- has occasionally surprised.)

Here's my trouble with job growth forecasts offered thus far, courtesy of MSM: the sources are a primarily (a) heavy construction (DoT, FTA, FAA, DoD) --substituting a small portion of residential construction to "save" further losses; and (b) ITC-IP concessions (USDA, HHS, DHS), consumer and B2B software sales plus value chain trade which may or may not be outsourced.

I suspect that as I get deeper into the bill, I'll discover the mechanisms to funnel money into (c) military recruitment; and (d) social services, expanding Corp. grantees' market power and, again, "saving" unionized state/municipal employees. (I can almost smell the "sacrifices" 100pp ahead ...)

Medicaid payments for contraception stripped from Recovery bill, defying Waxman.

What I'd be pleased to find are explicit requirements that technical training for renewable energy P&E manufacture, generation, maintenance, and sales. The irony all sectors is that hi-tech capital diminishes the value and volume of employing labor.

Diversity is the key to economic and political evolution.

by Cat on Tue Jan 27th, 2009 at 09:12:14 PM EST
[ Parent ]
'Shovel Ready' Economy | Ford | 28 Jan 2009

Thus, the $100 billion allocated for infrastructure in the House version of the economic stimulus measure will not fund any grand plan to remake America; rather, it will finance a hodgepodge of projects of varying merit that have been sanctioned by the dominant political factions in the 50 states. Mississippi will be enabled to do more of what Mississippi always does. The same thing with Ohio, Utah, and all the rest.

Shovel-ready means, $100 billion later, the social, economic and political relationships that existed before the stimulus will remain in place. The same favored contractors that have always hogged state construction dollars, will be treated to a feast. The same racial imbalances in employment and contracting that existed before the stimulus, will prevail afterwards.

The shovel-ready approach is necessary, we are told, because that's the only way to create lots of jobs in a hurry. That's not necessarily so. The truth is, the Obama administration has chosen the easiest route to spend lots of money quickly in ways that please the political actors that are in power at the local level.



Diversity is the key to economic and political evolution.
by Cat on Wed Jan 28th, 2009 at 11:32:26 AM EST
H.R.1 online, introduced by David Obey, 26  Jan 2009.

1/27/2009 Rules Committee Resolution H. Res. 92 Reported to House. Rule provides for consideration of H.R. 1 with 1 hour of general debate. Previous question shall be considered as ordered without intervening motions except motion to recommit with or without instructions. Measure will be considered read. Specified amendments are in order. Resolution provides for further consideration of H.R. 1. Further general debate shall continue for not to exceed one hour, equally divided and controlled and shall be limited to the bill and amendments made in order by this resolution. Upon the adoption of this resolution, the amendment printed in Part A of the report of the Committee on Rules accompanying this resolution shall be considered as adopted.

"This sucker's going down."

Diversity is the key to economic and political evolution.

by Cat on Wed Jan 28th, 2009 at 02:48:00 PM EST


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