Washington Prowler

Stimulating the Stimulus

Rahm Emanuel moves to unclog the spending spigot.

By 10.13.09

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White House chief of staff Rahm Emanuel hadn't been paying much attention to the ongoing effort by various Cabinet agencies, such as the Departments of Commerce, Energy, Health and Human Services, and Education, to disburse federal economic stimulus dollars, but he's paying attention now, according to White House sources.

Emanuel's sudden focus comes as reports continue to pour in that tens of billions of the federal dollars the Obama Administration claimed would "save jobs or create new jobs" have not been distributed to states or to entities, such as private businesses, to do what the administration expected.

"It may be that the global economy is stabilizing, and it may be that parts of the U.S. economy are stabilizing, but we're still looking at double-digit unemployment nationally, and a lack of confidence in the economic recovery," says a White House source. "The agencies have made it harder, not easier to get the stimulus dollars, and Rahm is trying to unplug the drain and get the money flowing. It's now a political issue and an economic issue."

It may not be that easy, in part, because the White House Office of Legislative Affairs and perhaps Emanuel himself left much of the stimulus bill to Democrats on Capitol Hill. Democrats in the House and Senate weighed down the stimulus bill with regulatory requirements for the hundreds of billions that were to be spent to stimulate state and local economies, some of the regulations so onerous that few qualified companies sought the federal money.

"First, you had the House and Senate's demands for regulations, then companies had to wait while the federal agencies created the regulations that Congress asked for," says a Senate Finance Committee staffer. "This was not free money; it was money with a lot of strings attached, and the White House just let it happen that way."

Those strings are now the red tape that has limited the stimulus plan's ability to do much of anything, and Emanuel wants to get the money moving out the door. White House sources say he is holding meetings with Cabinet department officials and demanding results soonest, and is asking the White House legislative affairs shop and the White House counsel's office to provide ways to sidestep federal regulatory policies to speed up the distribution of funds.

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