Topic 2: Implementing the Recovery Act

Congress passed the $787 billion Recovery Act in early 2009. The Act – sometimes referred to as the stimulus bill – focused on job creation, but it does so through hundreds of existing and new federal programs. Implementing these programs falls on the shoulders of thousands of state, local, non-profit, and private organizations. The Act also spawned new governance models. What are the implications of these models for national policy leadership, accountability, and our federal system?

Progress to Date. The Act has helped fill about one-third of projected state budget shortfalls. But it also created a series of daunting management challenges, thanks to a highly specific, and sometimes conflicting, set of federal goals and objectives. For the most part, the Act relies on a wide range of third parties – over 130,000 entities reported on their spending in October 2009 in the first-ever required progress reports stipulated by the Act.

Key Challenges in Implementation. Implementing the Recovery Act has sparked a series of management challenges:

• Complex federal program structures and reporting requirements for over 300 new and existing programs.
• Conflicting purposes in the Act, such as starting projects immediately, but also developing long-term, thoughtful implementation designs.
• A heavy reliance on third-parties to implement programs, where the third parties have different priorities.
• High political stakes at all levels of government in sharing responsibility for failures or shortfalls.
• Increasing centralization of authority over program implementation in the White House and by governors
• An accountability “stress test” created by the Act in terms of accountability, transparency, and oversight requirements

Research Questions Based on Forum Discussions. Following are highlights of some of the research questions developed:

• Which program design features (such as maintenance of effort and segregation of Recovery Act funds from other funds) have worked?
• How has the Recovery Act strengthened the role that states and governors play in the intergovernmental process?
• How has the Recovery Act changed the audit function in government?
• What elements of the Recovery Act might be appropriate to extend to all intergovernmental programs in the future (e.g., increased public transparency)?

(Note: the background discussion paper for this topic was prepared by Paul Posner, George Mason University)