$70 Billion in Allocated Federal Funds Still Unspent
Monday, June 11, 2012
A report released by Senator Tom Coburn (R-Oklahoma) asserts that about $70 billion appropriated by Congress have gone unspent, becoming, as the report title states, “Money for Nothing.” Coburn’s office cites numerous examples of cases in which Congress has allocated funds for some purpose, often to a specific federal, state or local government agency or agencies, which then fails to put the money to use.
Examples include the Department of Housing and Urban Development, which still has not spent nearly one-quarter of the $19.7 billion allocated for Hurricane Katrina disaster recovery—five years after the storm, which destroyed more than 350,000 homes, and the Justice Department, which has not spent $100 million allocated for body armor for the agency’s law enforcement officers. More than one in four of the nation’s bridges are either structurally deficient or functionally obsolete, yet $13 billion in federal funds for highway projects idles unspent, and three states—Virginia, Maryland and Georgia—have failed to spend more than $1 billion in transportation funds.
The most dramatic examples of unspent funds—accounting for more than half of the total—deal with three foreclosure relief programs created during the George W. Bush administration and implemented by the Obama administration as part of the Troubled Assets Relief Program (TARP). According to the Coburn report “Of the $29.9 billion allocated to the Home Affordable Modification Program (HAMP), which pays mortgage servicers who modify mortgages to reduce the financial burden on homeowners, only $2.7 billion has been spent.” The largest banks and other mortgage lenders generally balked at participating. Intended to help more than 7 million at-risk homeowners, it has brought assistance to barely 450,000.
The Hardest Hit Fund, established by President Barack Obama in February 2010, has disbursed less than $1 billion of its allocation of $7.6 billion. And the Federal Housing Authority Short Refinance Program, which was intended to provide assistance to homeowners who owe more than their house is worth, has given out only about $60 million of $8.1 billion obligated, helping only 750 homeowners since it was activated in September 2010.
The reasons for the failure to spend are varied. Political ideology, for example, led Florida Republican Governor Rick Scott in February 2011 to refuse a $2 billion federal grant for a high-speed rail link between Tampa and Orlando, contending that Florida would get stuck with the bill, a claim judged “False” by the independent website Politifact. That money does not figure in Coburn’s report, however, because it was re-allocated to other states eager for the jobs the money represents. Nearly one-fourth of $35 billion in disaster grants is unspent at the Homeland Security Department, and FEMA has said the delays were caused by too many federal regulations.
-Matt Bewig, David Wallechinsky
To Learn More:
Agencies Sitting on $70B in Unspent Funds, Report Finds (by Jolie Lee, Federal News Radio)
Money for Nothing (Office of Senator Tom Coburn) (pdf)
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