Recovery Act coordinator sees signs of progress

Three months after the most ambitious economic stimulus package in American history was signed into law, signs of progress are slowly beginning to emerge, according to G. Edward DeSeve, the government's lead implementation official for the $787 billion American Recovery and Reinvestment Act.

In his first extensive interview since returning to government in March to serve as the Obama administration's lead official on stimulus implementation, DeSeve told Government Executive Wednesday that the rate and efficiency of federal and state spending is exceeding expectations.

"As we look across the spectrum, we are comfortable that obligations and outlays are moving forward nicely," DeSeve said in his sparsely decorated office on the second floor of the Old Executive Office Building in Washington. "So we are pleased at the pace of spending."

Thus far, federal agencies have obligated $110 billion in recovery funds -- more than a $1 billion a day -- and actually paid out $36 billion.

While critics have suggested the discrepancy in those figures shows that funds are not moving out the door quickly enough, DeSeve argued that the obligated funds are gradually working their way through the economy, even in cases when the federal government has yet to cut an actual check.

A significant portion of the early allocations, he said, have gone for local transportation projects, in which states obligate funds for contracts and, after a certain percentage of the work is completed, seek reimbursement from the federal government.

DeSeve said implementing the Recovery Act involves balancing the desire for speed and the need to ensure funds are spent wisely and efficiently.

"It's almost like a brake and an accelerator. You need both to be a good driver," he said. "We try to judiciously apply the accelerator, but we know the brake is there when we need it."

The former deputy director for management in the Office of Management and Budget during the Clinton administration, DeSeve is arguably the linchpin in making sure that the stimulus has its desired effect.

His portfolio of responsibilities includes overseeing agency spending, providing recipients with appropriate guidance, helping create a reporting structure for state and local governments, and maintaining support for the effort from Congress and the American people. DeSeve works directly for Vice President Joe Biden -- who personally selected him for the position.

But if the veteran federal manager seemingly has the weight of the world on his shoulders, you wouldn't know it by looking at him.

"I honestly sleep well at night, and I don't mean to be cavalier about that," DeSeve explains. "The challenge to all of us is to make sure that the Recovery Act has its intended impact, which is to create jobs, wisely spend federal money and to help people that are most vulnerable in this economic recession. And every day I come to work and think about those things."

With 40 years of experience in federal and state government, DeSeve is no stranger to momentous challenges. In the late 1990s, he was on the team of people who crafted the government's response to the Y2K computer bug. During the 1980s he helped Philadelphia avoid filing for bankruptcy.

But the Recovery Act is unique, both in implementation and significance. President Obama has staked his reputation, and a hefty amount of political capital, on the prospect that the Recovery Act will be a key cog in turning around the economy. Early signs, DeSeve says, are positive.

According to a formula the White House Council of Economic Advisers established, the act has thus far created or saved 150,000 jobs. That figure is expected to quadruple next quarter. Actual data from funding recipients is due in October.

During the next 30 days, OMB is expected to issue official guidance providing states with a formula to determine how to measure and report jobs saved or created. The agency also will issue guidance regarding data reporting within the next month, DeSeve said.

The issue of how much information will be collected -- and from whom -- has been among the few lingering questions related to the Recovery Act.

Only direct recipients of federal funding are currently required to report back to OMB on how they are spending Recovery Act funds. OMB guidance, to the dismay of some lawmakers and government watchdogs, does not yet require the reporting of all funds distributed at the local level or below.

DeSeve cautiously demurred when asked if the new guidance would require such indirect reporting, stating only that his office was "checking all of the boxes in the statute and making sure all of that data gets to the right place."

But he appeared to leave the window open for such process in the not-so-distant future.

"Using the Recovery Act as a platform, we can move in the direction of integrating the reporting from state and local entities about federal programs into a centralized database," DeSeve said. That, he said is "certainly anticipated" by both the Recovery Act and previous legislation Obama co-sponsored with Sen. Tom Coburn, R-Okla. "What we want to do is continuously improve our ability to work with our recipient partners to get data that the American people care about in a way that is transparent and easy to access."

As for his own future, DeSeve, whose position exists only as long as there is a stimulus to implement, also is noncommittal.

"I did not put an end date in my own mind," DeSeve said. "I want to get this done, and I want to get it done right. I am not thinking about what happens next. I am thinking about what happens next week and what happens next month and what happens in six months."

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