GOP Report Points to Stimulus Money Gone Awry

Two Republican senators have conducted an exhaustive survey of the Obama administration’s $787 billion economic stimulus spending and found that some of the spending didn’t create jobs — it actually led to job losses.

Call it the federal law of unintended consequences.

All in all, Senators Tom Coburn (R-Okla.) and John McCain (R-Ariz.) scrutinized 100 projects, finding that some eliminated jobs, and others were simply questionable expenditures of money.

The report, obtained in advance by CNBC, spotlights everything from federal stimulus money that went to study the effects of cocaine on monkeys to dollars that went to construction projects that blocked access to local businesses — which laid off employees as a result.

The findings come despite a hearty endorsement of the federal stimulus just a few days ago in another report, this one by the economists Alan Blinder and Mark Zandi. The duo found that the effects of the federal stimulus were “very substantial,” raising 2010 real GDP by about 3.4 percent, holding unemployment about 1.5 percentage points lower and boosting US payrolls by almost 2.7 million jobs.

• Read the Full Report Here (Pt. 1)
• Read the Full Report Here (Pt. 2)

Not surprisingly, the Obama administration prefers Blinder and Zandi’s take to that of Coburn and McCain.

“We made clear from the start that we would subject every dollar of Recovery Act spending to the highest standards, and we’ve already proactively spotted and killed hundreds of dubious Recovery Act projects,” said Liz Oxhorn, a White House spokeswoman for the federal stimulus effort. “We'll look into each of their claims and take action if any have merit, but with more than 70,000 Recovery Act projects underway, any misguided project is just a small fraction of tens of thousands coast to coast that are rebuilding America and putting people to work.”

Three small business owners across the country tell the tale of how stimulus spending has upset their livelihoods.

Todd McKittrick, owner of Archery Bistro in Washington State’s Normandy Park, said he’s down to about half the staff he began with as the result of a stimulus funded road construction project he said is blocking access to his property.

“We used to have a good lunch business, but with the construction going on during the day, it actually killed our lunch business,” McKittrick told CNBC. “We’ve also shut down two more days to help stop the bleeding of the cost of the construction.”

According to the Coburn-McCain report, the project that’s causing problems for Archery Bistro came after the U.S. Department of Transportation provided the city of Normandy Park, Washington, with $3.8 million to spruce up eight blocks of the town’s 1st Avenue with the addition of “bike lanes, street lights, landscaping and a sidewalk.”

The construction, which began in the summer of 2009, is expected to be complete by late August.