Rendell faces questions on stimulus funds

WASHINGTON - U.S. Rep. Jason Chaffetz, a Republican from Utah, is no fan of the federal stimulus package. He thought it was a waste when it was passed in February. And he thinks now that it has produced too few jobs - 150,000, by the latest White House estimate - for the $57 billion that has been spent nationally so far.

When Gov. Rendell appeared before him yesterday at a hearing on Capitol Hill, Chaffetz asked, "How many jobs have been created in Pennsylvania by the stimulus?"

Rendell's answer - and Chaffetz's further questioning - neatly distilled a debate that had been going on for two hours in the House Oversight and Government Reform Committee over the effectiveness of the $787 billion stimulus program.

Though he had no precise jobs figure to offer, Rendell guessed that "a couple of thousand" jobs had been created by the $1 billion spent to date in Pennsylvania, and that 5,000 to 10,000 jobs had been saved.

That didn't seem like much bang for the buck, Chaffetz said.

Maybe not, Rendell said. But he urged Chaffetz to consider that 3.7 million Pennsylvania residents were getting a tax cut from a slightly lower withholding rate in their paychecks. Hundreds of thousands are getting more in food stamps. And others are getting more in unemployment benefits.

Rendell then challenged Chaffetz, "Do you think that was an appropriate thing?"

Chaffetz did not respond directly. The first-term congressman, who sleeps on a cot in his office to save taxpayers the cost of a Washington residence, was focused on one issue only: "Jobs, jobs, jobs."

He said that that was how the Obama administration had sold the stimulus to the American public and that was what people expected.

Rendell said jobs would increase as the stimulus program built. President Obama has estimated the eventual number at 3.4 million.

"I urge everyone to be patient," Rendell said.

The Pennsylvania Department of Transportation, he said, has issued contracts for 162 highway and bridge projects worth $369 billion. But most of that work is just getting started.

He said he agreed with stimulus critics on one thing - there should be more money for infrastructure work. Construction directly creates jobs, he said.

The government oversight committee, which is charged with keeping watch over the stimulus, was holding only its third hearing on the issue.

Also yesterday, the Government Accountability Office issued its second bimonthly stimulus report, saying 63 percent of all money at the state level had gone to help states meet the rising cost of Medicaid insurance for the poor.

Robert L. Nabors 2d, deputy director of the White House Office of Management and Budget, testified that the administration retained faith that the stimulus was working to slow the decline of the economy - though the unemployment rate might continue to rise for a time.

"Is our work complete?" he said. "Not even close. But are we on the right path? Yes, without question."

Some Democrats in Congress have said another stimulus package might be necessary to reenergize the economy.

But Nabors said, "No one in the administration is talking about a second stimulus at this time."

Republicans on the oversight committee made it very clear yesterday that they doubted the stimulus had had much impact.

Even some Democrats who had pushed for the measure seemed a bit let down, including Rep. Edolphus Towns (D., N.Y.), the committee chairman.

"I am encouraged that, since the enactment of the recovery act, we have made some strides toward putting our economy back on track," he said. "But I am disappointed in the overall results so far. Unemployment is at a high, and the full force of stimulus spending has yet to be felt."

Echoing other urban Democrats, Towns said he was particularly disappointed that money for highway and bridge construction did not seem to be reaching economically distressed communities at the rate prescribed.

"There is a substantial variation among states as to what constitutes an economically distressed area," Towns said. "For this reason, it is unclear whether recovery act funds are going where they are needed most."

The GAO also raised this concern.

In its report to Congress, the GAO also said that states must do a faster job of auditing their use of federal funds than they regularly do now. Otherwise, it said, there could be delays of six to nine months before the public learns of missteps.