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by Michael Grabell

This story was adapted from "Money Well Spent?: The Truth Behind the Trillion-Dollar Stimulus, the Biggest Economic Recovery Plan in History," which will be published Tuesday by PublicAffairs.

A common criticism of President Obama's $800 billion stimulus package has been that it failed to produce anything – that while the New Deal built bridges and dams, all the stimulus did was fill some potholes and create temporary jobs.

Don't tell that to Annette Herrera. She was 50 when the auto supplier she worked for in Westland, Mich., closed its factory and moved the work to Mexico. Then, after being unemployed for 2½ years, she got a job in October 2010 with A123 Systems, which had received $250 million in stimulus money to help open a new lithium-ion battery plant in nearby Romulus, Mich.

"The first thing I did was call my husband and tell him, 'You're never going to guess! I got a job!'" Herrera recalled. "And then it was like celebration time."

One success the Obama administration can duly claim is the rebirth of the electric-car industry in the United States. Automakers have unveiled a number of mass-market electric cars, which have seen small but rising sales. Battery and parts manufacturers are building 30 factories, creating thousands of new jobs. A123 has hired 700 workers at Herrera's plant and a second one in nearby Livonia, and plans to hire a couple thousand more people over the next few years.

If it wasn't for the stimulus, the companies say, they would have built these plants overseas.

It was all part of an effort to promote "green" manufacturing and put a million electric cars on the road by 2015.

The question is: Will it last?

Elkhart, Ind., once believed it would. It saw electric vehicles as its salvation after watching its unemployment rate hit 20 percent. Eager to seed a new industry, the county witnessed electric-vehicle ventures sprout out of nowhere as the stimulus took off in 2009.

But by late summer 2011, what had sprouted were weeds. The parking lot of the Think electric-car plant was full of them, some more than a foot high growing from the cracks. Out front were two pickups and a motorcycle.

Hundreds of laid-off factory workers were supposed to have found jobs churning out the Norwegian company's bug-like, plastic-bodied cars, which ran solely on electricity.

Today the Elkhart factory employs two. Its parent company filed for bankruptcy in June. Its largest shareholder and battery maker, Ener1, which received $118 million in stimulus money, did the same last week.

A second life

Electric cars began appearing on California roads in the mid-1990s after state regulators mandated that a certain percentage of automakers' fleets include zero-emissions vehicles.

But within a few years, they were deemed a failure by car companies, which stopped making them and took back those they had leased.

Much had changed in the eight years leading up the stimulus package. The lead-acid and nickel-metal hydride batteries that weighed as much as 1,200 pounds were replaced with lithium-ion batteries that weighed as little as 400 pounds.

In the early 2000s, gas hadn't even passed $2 a gallon. Less than a decade later, it was twice that. Toyota had proven the demand with its long waiting list for the Prius hybrid.

Government policy had changed, too, with a 2007 energy bill that increased fuel-efficiency standards and provided $25 billion in loans for automakers to upgrade their plants.

But until the economic stimulus package was passed in 2009, the manufacture of electric cars and their batteries in the United States was nearly nonexistent.

The United States had only two factories manufacturing less than 2 percent of the world's advanced batteries. Most were made in Korea and Japan. In America, only Tesla manufactured an electric car — which sold for a cool $100,000. Across the entire country, there were a mere 500 electric charging stations.

But as the stimulus kicked in, there was suddenly no better environment for the electric car to thrive.

With more than $2 billion in federal grants, matched by another $2 billion in private investment, the Obama administration was supporting electric cars from the mine to the garage.

Chemetall Foote Corp., which operates the only U.S. lithium mine, received $28 million to boost production at its plants in Nevada and North Carolina. Honeywell received $27 million to become the first domestic supplier of a conductive salt for lithium batteries. More than $1 billion was spent to open and expand battery factories, many of them in hard-luck towns across Michigan. Through a separate federal program, automakers received loans to retool their assembly lines.

Customers could receive a $7,500 tax credit for buying an electric car. The stimulus provided funding for 20,000 electric charging stations by 2013. In many cities, drivers could get a home charger for free.

Although electric cars would not make up for the generation-long loss of manufacturing jobs, at least not yet, it was novel to see companies creating jobs in the Rust Belt instead of outsourcing them.

In July, Johnson Controls opened the first U.S. factory to produce complete lithium-ion battery cells for electric vehicles. Compact Power is building a $300 million factory in Holland, Mich., to produce batteries for the Chevy Volt and the electric Ford Focus. A123 now supplies the luxury electric carmaker Fisker Automotive and the manufacturers of electric delivery trucks used by FedEx and Frito-Lay.
"Quite simply, if we didn't get that grant, we wouldn't have built [the factory] in the U.S.," A123 spokesman Dan Borgasano said.

The battery grants have created and saved more than 1,800 jobs for assembly workers, toolmakers and engineers, according to a ProPublica analysis of stimulus project reports filed by the companies. That number doesn't include the workers who constructed the plants or those hired by the matching private investment the companies had to make to get the grants.

Killed again?

The problem: Consumers have been slow to embrace the electric car.

The price of the battery is still too high, and the price of gas is still too low, the Government Accountability Office warned in June 2009 before the grants were awarded. The starting price for the all-electric Nissan Leaf is $33,000, while the hybrid Volt sells for about $40,000 before tax credits — far more than many middle-class families can afford.

About 40 percent of drivers didn't have access to an outlet where they park their vehicles, the GAO noted.

"Although a mile driven on electricity is cheaper than one driven on gasoline," the National Research Council reported, "it will likely take several decades before the upfront costs decline enough to be offset by lifetime fuel savings."

Perhaps the biggest obstacle, though, was what the automobile represents in the American psyche: the freedom of the open road. While most people drive less than 40 miles per day, consumers want cars that they can also take on summer vacations — and they don't want to have to constantly worry about looking for a charging station.

The Leaf's range is just 73 miles, according to the official government rating, well below the much-advertised 100 miles.

By the end of 2011, fewer than 18,000 Leafs and Volts had been sold in the United States.

A report by congressional researchers last year concluded that the cost of batteries, anxiety over mileage range and more efficient internal combustion engines could make it difficult to achieve Obama's goal of a million electric vehicles by 2015. Even many in the industry say the target is unreachable.

While the $2.4 billion in stimulus money has increased battery manufacturing, the congressional report noted that United States might not be able to keep up in the long run. South Korea and China have announced plans to invest more than five times that amount over the next decade. Even A123 had to lay off 125 workers in November — though Borgasano says the company plans to rehire them all by June — because Fisker reduced orders.

Dick Moore, the mayor of Elkhart, had hoped the area known for its recreational-vehicle factories would one day be not just the "RV Capital of the World" but the "EV Capital of the World" as well.

Navistar International had received $39 million in stimulus money to build 400 electric delivery trucks in the first year. But by early 2011, it had hired about 40 employees and assembled only 78 vehicles.

Think had rallied into 2011 with plans to start production in Elkhart earlier than expected. But in April, assembly work suddenly stopped as the plant awaited parts from Europe.

In June, Think's parent company filed for bankruptcy. The decision left the Elkhart plant slouching toward extinction until the American subsidiary was purchased by a Russian entrepreneur who promised to restart production in early 2012.

But on Thursday, its battery maker, Ener1, also filed for Chapter 11 bankruptcy, reporting that the demand for electric vehicles "did not develop as quickly as anticipated."

Elkhart's dream of becoming the EV capital?

Moore put it this way: "The fact that this hasn't moved very quickly, that doesn't bode well for that idea."

The future

The fate of the electric car depends greatly on whether sales take off soon.

There are other factors, such as the price of gas and whether Congress approves proposed standards requiring automakers to raise the average fuel economy of their vehicles to 55 miles per gallon by 2025.

The electric car has always struggled with a chicken-and-egg dilemma: Automakers have been reluctant to build electric cars without consumer demand. But consumers won't buy them until automakers develop cheaper, longer-range batteries.

One of the goals of the ongoing stimulus spending is to solve this problem. By 2015, the 30 battery and component factories will be able to produce 40 percent of the world's batteries, according to the administration.

The investments would help manufacturers increase the batteries' life from four years to 14 and cut their cost from $33,000 to $10,000, the administration said in a report on innovation. That would make the electric car more competitive.

Herrera noted that many people at the A123 factory believe they will never be able to afford the cars powered by the batteries they make. But, she says, "you never know."

"When the flat-screen TVs first came out, they were way expensive, and now they're reasonably priced," she said. "I think that's going to be the same thing with electric automobiles. This is a new product. It's going to take time."

On Dec. 31, 2011, Recovery Accountability and Transparency Board Chairman Earl Devaney stepped down after leading the Board for almost three years. Devaney did more than anyone else to ensure Recovery Act spending was as transparent as it was, and his presence will be sorely missed.
While he didn't create the transparency provisions in the Recovery Act (those were written into the law or created by the Office of Management and Budget (OMB)), Devaney implemented the law's requirements. He and his team created the Recovery.gov website from scratch in remarkably little time and did a great deal to ensure that recipients understood their reporting responsibilities under the law. As a former inspector general (for the Department of the Interior), Devaney placed a strong emphasis on finding and preventing fraudulent contracting and wasteful spending, creating the Recovery Operations Center. He also insisted on making maps of Recovery Act spending the focal point of Recovery.gov, arguing that the government needed to do more to display information in useful ways.
Devaney understood the importance of providing information to the public and talked of empowering an army of citizen inspectors general. We appreciated the fact that he frequently reached out to the transparency community to get feedback and guidance. When we raised concerns about the quality of the data from the first rounds of recipient reporting, the Board moved quickly to fix the problems it could, such as automatically filling in some data fields for recipients (for example, pulling in company information from existing contracting databases) and creating algorithms to spot potential red flags (such as recipients reporting that they had spent more money than they had received).
Devaney also championed transparency beyond the Recovery Act. He has been a vocal supporter of unique identifiers for recipients of federal funds, a thorny problem that has long plagued federal spending transparency. For the past six months or so, he has also been the head of the Government Accountability and Transparency (GAT) Board, created by President Obama last year to "provide strategic direction for enhancing the transparency of Federal spending and advance efforts to detect and remediate fraud, waste, and abuse." The GAT Board's recent report advocated for many reforms, most importantly centralizing spending databases and streamlining reporting obligations, in addition to calling for a universal system of unique identifiers for contracts and grants throughout the federal government.
Devaney will be replaced by current Education Department Inspector General Kathleen Tighe. Tighe has been on the Recovery Board since March 2010, serving as the chair of the Board's Accountability Committee since March 2011. Interestingly, Tighe will not be stepping down from her inspector general role, which possibly indicates a diminution of the position of Recovery Board chair. The chair was a full-time job for Devaney, who stepped away from his Department of the Interior position to lead the Board, and Devaney clearly had Vice President Biden's ear, meeting frequently with him to discuss various issues related to the Board's work.
The chair's reduced prominence is likely a reflection of the administration's desire to move on from the Recovery Act. With most of the Recovery Act money already spent, Tighe's job will largely be overseeing the dissolution of the Board and the application of lessons learned from the Recovery Act to the entire federal government, a process Devaney has already started with the GAT Board. There's still much to be done to improve federal spending transparency, but hopefully, even in a part-time role, Tighe will bring to her new position just as much passion and success as Devaney.
Image by Flickr user OversightandReform.

On Dec. 31, 2011, Recovery Accountability and Transparency Board Chairman Earl Devaney stepped down after leading the Board for almost three years. Devaney did more than anyone else to ensure Recovery Act spending was as transparent as it was, and his presence will be sorely missed.
While he didn't create the transparency provisions in the Recovery Act (those were written into the law or created by the Office of Management and Budget (OMB)), Devaney implemented the law's requirements. He and his team created the Recovery.gov website from scratch in remarkably little time and did a great deal to ensure that recipients understood their reporting responsibilities under the law. As a former inspector general (for the Department of the Interior), Devaney placed a strong emphasis on finding and preventing fraudulent contracting and wasteful spending, creating the Recovery Operations Center. He also insisted on making maps of Recovery Act spending the focal point of Recovery.gov, arguing that the government needed to do more to display information in useful ways.
Devaney understood the importance of providing information to the public and talked of empowering an army of citizen inspectors general. We appreciated the fact that he frequently reached out to the transparency community to get feedback and guidance. When we raised concerns about the quality of the data from the first rounds of recipient reporting, the Board moved quickly to fix the problems it could, such as automatically filling in some data fields for recipients (for example, pulling in company information from existing contracting databases) and creating algorithms to spot potential red flags (such as recipients reporting that they had spent more money than they had received).
Devaney also championed transparency beyond the Recovery Act. He has been a vocal supporter of unique identifiers for recipients of federal funds, a thorny problem that has long plagued federal spending transparency. For the past six months or so, he has also been the head of the Government Accountability and Transparency (GAT) Board, created by President Obama last year to "provide strategic direction for enhancing the transparency of Federal spending and advance efforts to detect and remediate fraud, waste, and abuse." The GAT Board's recent report advocated for many reforms, most importantly centralizing spending databases and streamlining reporting obligations, in addition to calling for a universal system of unique identifiers for contracts and grants throughout the federal government.
Devaney will be replaced by current Education Department Inspector General Kathleen Tighe. Tighe has been on the Recovery Board since March 2010, serving as the chair of the Board's Accountability Committee since March 2011. Interestingly, Tighe will not be stepping down from her inspector general role, which possibly indicates a diminution of the position of Recovery Board chair. The chair was a full-time job for Devaney, who stepped away from his Department of the Interior position to lead the Board, and Devaney clearly had Vice President Biden's ear, meeting frequently with him to discuss various issues related to the Board's work.
The chair's reduced prominence is likely a reflection of the administration's desire to move on from the Recovery Act. With most of the Recovery Act money already spent, Tighe's job will largely be overseeing the dissolution of the Board and the application of lessons learned from the Recovery Act to the entire federal government, a process Devaney has already started with the GAT Board. There's still much to be done to improve federal spending transparency, but hopefully, even in a part-time role, Tighe will bring to her new position just as much passion and success as Devaney.
Image by Flickr user OversightandReform.

By Andrew Seifter, Good Jobs FirstMore...

By Andrew Seifter, Good Jobs First

Earl Devaney, who as Chairman of the Recovery Accountability and Transparency Board oversaw implementation of the Recovery Act's revolutionary accountability measures, is retiring.

A longtime civil servant with a breadth of experience in law enforcement, Devaney proved during his tenure on the Recovery Board that enhanced transparency not only keeps the public informed of the costs and benefits of government spending projects; it also prevents waste and fraud.More...

The American Recovery and Reinvestment Act of 2009 (Recovery Act) included $8.2 billion in funding for the National Institutes of Health (NIH) to be used to support additional scientific research-including extramural grants at universities and other research institutions. In 2009, the Acting Director of NIH testified that each extramural grant awarded with Recovery Act funding had the potential of supporting employment--full- or part-time scientific jobs--in addition to other impacts, such as contributing to advances in improving public health. GAO was asked to examine the use of Recovery Act funds by NIH grantees. Specifically, GAO addresses the information available from NIH and its grantees about the extent to which NIH Recovery Act funding (1) supported jobs, and (2) had other impacts. To obtain information on job impacts, GAO reviewed a database containing information NIH Recovery Act grantees reported to the national data collection system and interviewed NIH officials. To obtain more specific jobs information about individual grants, GAO administered a Web-based data collection instrument to 50 selected principal investigators who direct research at grantee institutions--10 principal investigators at each of five selected grantee institutions. The selected principal investigators had generally received awards of $500,000 or more. To obtain information on other Recovery Act impacts, GAO used information from the data collection instrument and interviewed NIH officials. Data reported by all of NIH's Recovery Act grantee institutions to the national data collection system at www.federalreporting.gov and available to NIH indicate that the number of full-time equivalent (FTEs) jobs supported by NIH Recovery Act funds increased from December 2009 through September 2010, and then remained steady from December 2010 through June 2011--the most recent quarter for which data are available. The number of FTEs supported by NIH Recovery Act funds increased from about 12,000 in the reporting quarter ending December 2009 to about 21,000 in the quarter ending in June 2011. The 50 selected principal investigators who direct research at the grantee institutions in GAO's review provided additional information explaining how the Recovery Act funding supported FTEs. Nearly one-third of the selected principal investigators reported that the NIH Recovery Act funding they received supported new positions, and about half of the principal investigators reported that the funding they received allowed them to avoid reductions in jobs or avoid a reduction in the number of hours worked by current employees. The selected principal investigators also reported that the Recovery Act funding they received primarily supported scientists and other faculty. NIH officials we interviewed reported that they receive some information from principal investigators about the other impacts of NIH-funded research, such as preliminary research results included in annual progress reports. NIH is also participating in the Star Metrics program--a multiagency venture to monitor the scientific, social, and economic impacts of federally funded science--which NIH officials expect could provide more information about these impacts. While Star Metrics is currently developing an approach to capture information about the other impacts of NIH grant funding, there is no expected completion date for reporting this information. In response to GAO's data collection instrument, selected principal investigators who direct research at the grantee institutions in GAO's review reported that the use of Recovery Act funds resulted in purchases of research supplies, equipment, laboratory testing services, and scientific training of health care professionals. The majority of the 50 selected principal investigators in GAO's review also reported preliminary results from their Recovery Act-funded research that could contribute to future scientific developments in prevention and early detection of disease, improvements in medical therapies, and improved research capabilities. The principal investigators in GAO's review and NIH officials GAO interviewed reported that they track the scientific impact of NIH research--including the impact of research funded through the Recovery Act--primarily through peer-reviewed publications, but also through other metrics such as the filing and approval of patent applications. According to NIH officials, when a sufficiently large body of research results has accumulated, NIH plans to prepare reports--similar to its existing publicly available Investment Reports--that will highlight the impact of its Recovery Act-funded research. The Department of Health and Human Services provided technical comments on a draft of this report, which GAO incorporated as appropriate.

The American Recovery and Reinvestment Act of 2009 (Recovery Act) included $8.2 billion in funding for the National Institutes of Health (NIH) to be used to support additional scientific research-including extramural grants at universities and other research institutions. In 2009, the Acting Director of NIH testified that each extramural grant awarded with Recovery Act funding had the potential of supporting employment--full- or part-time scientific jobs--in addition to other impacts, such as contributing to advances in improving public health. GAO was asked to examine the use of Recovery Act funds by NIH grantees. Specifically, GAO addresses the information available from NIH and its grantees about the extent to which NIH Recovery Act funding (1) supported jobs, and (2) had other impacts. To obtain information on job impacts, GAO reviewed a database containing information NIH Recovery Act grantees reported to the national data collection system and interviewed NIH officials. To obtain more specific jobs information about individual grants, GAO administered a Web-based data collection instrument to 50 selected principal investigators who direct research at grantee institutions--10 principal investigators at each of five selected grantee institutions. The selected principal investigators had generally received awards of $500,000 or more. To obtain information on other Recovery Act impacts, GAO used information from the data collection instrument and interviewed NIH officials. Data reported by all of NIH's Recovery Act grantee institutions to the national data collection system at www.federalreporting.gov and available to NIH indicate that the number of full-time equivalent (FTEs) jobs supported by NIH Recovery Act funds increased from December 2009 through September 2010, and then remained steady from December 2010 through June 2011--the most recent quarter for which data are available. The number of FTEs supported by NIH Recovery Act funds increased from about 12,000 in the reporting quarter ending December 2009 to about 21,000 in the quarter ending in June 2011. The 50 selected principal investigators who direct research at the grantee institutions in GAO's review provided additional information explaining how the Recovery Act funding supported FTEs. Nearly one-third of the selected principal investigators reported that the NIH Recovery Act funding they received supported new positions, and about half of the principal investigators reported that the funding they received allowed them to avoid reductions in jobs or avoid a reduction in the number of hours worked by current employees. The selected principal investigators also reported that the Recovery Act funding they received primarily supported scientists and other faculty. NIH officials we interviewed reported that they receive some information from principal investigators about the other impacts of NIH-funded research, such as preliminary research results included in annual progress reports. NIH is also participating in the Star Metrics program--a multiagency venture to monitor the scientific, social, and economic impacts of federally funded science--which NIH officials expect could provide more information about these impacts. While Star Metrics is currently developing an approach to capture information about the other impacts of NIH grant funding, there is no expected completion date for reporting this information. In response to GAO's data collection instrument, selected principal investigators who direct research at the grantee institutions in GAO's review reported that the use of Recovery Act funds resulted in purchases of research supplies, equipment, laboratory testing services, and scientific training of health care professionals. The majority of the 50 selected principal investigators in GAO's review also reported preliminary results from their Recovery Act-funded research that could contribute to future scientific developments in prevention and early detection of disease, improvements in medical therapies, and improved research capabilities. The principal investigators in GAO's review and NIH officials GAO interviewed reported that they track the scientific impact of NIH research--including the impact of research funded through the Recovery Act--primarily through peer-reviewed publications, but also through other metrics such as the filing and approval of patent applications. According to NIH officials, when a sufficiently large body of research results has accumulated, NIH plans to prepare reports--similar to its existing publicly available Investment Reports--that will highlight the impact of its Recovery Act-funded research. The Department of Health and Human Services provided technical comments on a draft of this report, which GAO incorporated as appropriate.

WASHINGTON – Assistant Secretary for Communications and Information and NTIA Administrator Lawrence E. Strickling today announced two American Recovery and Reinvestment Act investments to help bridge the technological divide, boost economic growth, create jobs, and improve education in Hawaii.

WASHINGTON – The Commerce Department’s National Telecommunications and Information Administration (NTIA) today announced a $10.6 million American Recovery and Reinvestment Act investment to help bridge the technological divide, boost economic growth, create jobs, and improve education and healthcare in New Mexico.

HHS Secretary Kathleen Sebelius today announced three sets of grants and cooperative agreements totaling nearly $17 million for patient-centered outcomes research (PCOR), or research that compares treatments and strategies to improve health outcomes for patients.

U.S. Commerce Secretary Gary Locke today announced 35 American Recovery and Reinvestment Act investments to help bridge the technological divide, boost economic growth, create jobs, and improve education and healthcare across the country. The investments, totaling $482.4 million in grants, will fund projects that pave the way to bring enhanced high-speed Internet access to millions of households and businesses and link thousands of schools, hospitals, libraries, and public safety offices to the information superhighway.

HHS Secretary Kathleen Sebelius today announced that Cincinnati and Detroit are the two final pilot communities selected under the new Beacon Community Program that is using health information technology to help tackle leading health problems in communities across the country.  At the same time, the program will also allow HHS to look for new ways to share the lessons learned by funded communities and, working with local and national health care foundations, develop support networks for other communities that want to employ similar innovative approaches.

The construction of the main facility is the final phase of NOAA’s Pacific Regional Center project. NOAA is partnering with the U.S. Navy to redevelop existing federal facilities on Ford Island to modernize and consolidate NOAA’s programs supporting management of coastal and marine resources and weather, tsunami, and climate prediction in the Pacific.

WASHINGTON, D.C.—The National Institute of Standards and Technology (NIST) issued today its first Guidelines for Smart Grid Cyber Security, which includes high-level security requirements, a framework for assessing risks, an evaluation of privacy issues at personal residences, and additional information for businesses and organizations to use as they craft strategies to protect the modernizing power grid from attacks, malicious code, cascading errors, and other threats.

WASHINGTON — Secretary of Labor Hilda L. Solis issued the following statement on the August 2010 Employment Situation report released today:

"This past August, the economy gained 67,000 jobs in the private sector, and the unemployment rate increased to 9.6 percent. Total nonfarm employment declined by 54,000 over the month, as 114,000 temporary census jobs wrapped up between July and August and more than offset the private sector job gains.

Washington, D.C. - Department of Homeland Security (DHS) Secretary Janet Napolitano today announced the deployment of American Recovery and Reinvestment Act (ARRA)-funded advanced imaging technology (AIT) to 28 additional airports nationwide - strengthening security at airports throughout the nation while creating local jobs.