Abstract
This research focuses on President Obama’s signature economic plan adopted in February 2009—the American Recovery and Reinvestment Act (ARRA). Using data available from Recovery.gov, the analysis refines prior efforts to test the thesis that partisanship has played a central role in the distribution of funds across congressional districts by distinguishing between total spending on infrastructure and non-infrastructure programs as of the end of the second quarter of 2010. Further, this research examines not only political and demographic factors relative to the locus of stimulus fund expenditures but also the expected and actual employment impact of ARRA by district. The analysis provides little evidence for the partisan theory of stimulus spending. Rather, the results accentuate the demographic characteristics of the districts that have thus far received stimulus money and putatively benefitted from the most jobs, in some ways counter to what the White House may have intended due to the complexities of fiscal federalism.
Highlights
This research focuses on President Obama’s signature economic plan adopted in February 2009—the American Recovery and Reinvestment Act (ARRA)
On 13 February 2009 the Democratic majority of the new 111th Congress passed the American Recovery and Reinvestment Act (ARRA)—the largest discretionary spending measure ever adopted in the history of the Republic
The Speaker asserted optimistically that the bill would create or “save” over 3 million jobs [1]. When he signed the bill on 17 February 2009 President Obama posited that his administration would “ensure that every dollar spent in this historic legislation is spent wisely and for its intended purpose.”
Summary
A significant amount of ARRA funds would be allocated to states for highway and bridge repairs and other construction projects. As with stimulus spending more generally, it is not shocking that economists disagree on the potential net effect of public capital for infrastructure projects as well. The foregoing discussion provides a critical backdrop to this research, which focuses sharply on the political and demographic characteristics of the congressional districts in which the stimulus money was spent, on which types of programs (infrastructure and “other” programs) funds were allocated, and on the expected and actual jobs reported to have been created or saved by ARRA as of the end of June 2010 when the stimulus package took full effect
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