Five years after it took effect, the American Recovery and Reinvestment Act – better known as the federal stimulus – remains up for debate.
The Democratic White House marked the fifth anniversary of the law on Feb. 17, contending the influx of $816 billion into the U.S. economy kept a bad recession from growing worse.
Republican officials argued that continued high unemployment and sluggish economic growth are proof that the stimulus failed.
IPFW economist John Kessler called the stimulus a mixed bag that provides ammunition to both sides of the debate. Yes, he said, the national jobless rate has fallen from 10 percent in late 2009 to 6.6 percent in January, but why did it take so long? And did the economy begin recovering because of the stimulus or because of the natural course of the economy? Kessler wondered.
From the economist point of view, the question is did they spend money that wouldn’t have been spent anyway and did they spend it on projects that will actually have effect on long-term economic growth and not just make job’ type projects? Kessler said in an email.
What is not in dispute is that the feds handed out money, and state and local governments, schools, companies and nonprofits took it. Nearly 4,900 organizations in Indiana split $4.5 billion, according to the Recovery Act website at www.recovery.gov.
The single largest recipient in northeast Indiana was Fort Wayne Community Schools, which was awarded $41.4 million. It was among 22 school districts from across the nation that were profiled in a 2012 audit report on stimulus spending by the inspector general for the U.S. Department of Education.
The report said the district spent the bulk of its money to maintain or expand existing services and activities, with the rest going for new services. Specific uses included saving 62 full-time jobs from state funding cuts, hiring dozens of instructional coaches and interventionists, providing summer-school books to students with disabilities and buying computers, software and interactive whiteboards.
The Recovery Act gave us an opportunity to put instructional coaches and student interventionists in every building, something that we wouldn’t have been able to do otherwise, said Krista Stockman, public information officer for the school district.
We found when the stimulus money ran out that these were positions we wanted to keep as we believe they have played an integral role in the academic success we are seeing, Stockman said in an email. The stimulus money gave us the opportunity to test it out before fully committing to it. Once we were comfortable that this was a solid investment, we worked it into our budget.
Other large awards in Allen County went to East Allen County Schools, $11.24 million; Southwest Allen County Schools, $7.51 million; Northeast Indiana Workforce Investment, $6.7 million; Community Action of Northeast Indiana; $5.2 million; and Northwest Allen County Schools, $4.3 million.
The DeKalb County town of St. Joe received about $71,000 for sidewalks and a pedestrian and bicycle trail; Fort Wayne Ballet received $21,000 to support jobs threatened by declines in philanthropic support; and the Noble County town of Rome City got $16,000 for energy efficiency work at its town hall.
At least 11 for-profit companies in Allen County received stimulus funds. By far the biggest award was $5 million to ITT Space Systems in 2009. That money was part of a nearly $26 million federal grant to Northrop Grumman Space & Mission Systems Corp. of California for guided missile and space vehicle manufacturing.