How the Stimulus Bill Increased Transparency

How the Stimulus Bill Increased Transparency February 10, 2012

When President Obama took office, he immediately promised to have the most transparent administration in history. In many important ways, he has betrayed that promise. But in one area — spending — the stimulus bill he pushed through could have a long-term effect of vastly increased transparency and accountability. Ryan Holywell explains why:

But there is one area where the legislation has had a definitive effect, one clear impact that transcends politics and is almost universally acknowledged: The stimulus has done more to promote transparency at almost all levels of government than any piece of legislation in recent memory. Many states launched or enhanced their open government initiatives around the same time as the stimulus, drawing on both the lessons learned and technical know-how they developed as they implemented the heightened federal reporting requirements that came with ARRA. It’s an impact that seems to excite watchdogs and wonks more than the politicians who bicker over the economic impact of the spending.

Now, administration officials, members of Congress and state lawmakers are all crafting plans to build on the historic levels of transparency the legislation helped spur. Three years after the Recovery Act was passed, “we’re in a position to move forward,” says Michael Bird, senior federal affairs counsel with the National Conference of State Legislatures. “It will be legacy legislation.”

When the stimulus was signed into law in early 2009, one of the biggest tasks its architects faced was designing the reporting requirements for fund recipients. Getting those right was critical: The programs funded by the multibillion-dollar legislation would have been seriously undermined by significant fraud. Ultimately, states and localities that received stimulus funds were required to complete reports containing 99 fields of information, ranging from basic descriptions of ARRA-funded projects to detailed data on expenditures. Notably, the federal government also gained access to data from “sub-recipients,” such as contractors and even subcontractors that performed stimulus-funded work. Transparency legislation passed by Congress in 2006 already mandated that type of data; prior to the stimulus, however, it had widely been ignored.

The unprecedented level of data allowed the feds to do two important things. First, the public-facing transparency Web portal,, offered taxpayers a way to see how the federal funding was used, nearly in real time. Second, the data was used to power the Recovery Operations Center, better known as the ROC, which has been widely praised for preventing fraudulent use of stimulus funds. The reporting requirements driving both efforts were developed quickly — some state-level critics say hastily — but by most counts were effective at providing the level of transparency that the stimulus’ architects sought. Some critics have quibbles: They say the program hasn’t done an effective job linking performance metrics with spending data, and it’s difficult to determine the quality of the jobs the stimulus created. But the efforts far surpassed anything the feds had done in the past.

Equally as important, it’s increased the demand for more transparency:

The stimulus’ greatest legacy actually may be the demand for transparency it created across levels of government, especially at the state level, where officials are developing increasingly sophisticated transparency portals. “It definitely pulled some states forward,” says Kristin McMurray, managing editor of Sunshine Review, a website that evaluates state and local transparency sites. In 2010, the year after the stimulus was created, at least 14 states built transparency sites or made big improvements to their existing sites, according to research by Phineas Baxandall, a senior analyst with U.S. Public Interest Research Groups (PIRG), which publishes a widely read annual report rating each state’s transparency initiatives. All totaled, 40 states now have transparency websites that provide checkbook-level information on government spending. “I think the stimulus requirements set a new standard for states,” Baxandall says. “A lot of what states started doing was really mimicking what they had done with their stimulus transparency.”

This is one of the most important things the internet has allowed. Information that would have taken a great deal of time and effort even for a committed investigative journalist 25 years ago is now available in seconds to anyone who wants to see it.

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  • markholcombe

    I wonder if the states that were threatening to reject the stimulus funds were really objecting to the transparency requirements.

  • Zugswang

    I don’t think that was the case, mark. When officials were publicly adamant in their refusal to accept recovery funds, it was in parts of the country with significant tea party influence. After a lot of federal reps were voted out of office after casting their vote to pass the bill, I think a lot of governors were very aware of how toxic public support of this was at the time. And although many of them ended up taking the money, they were very careful to make sure they verbally chastised the legislation at every opportunity to cast themselves as unwilling recipients of the bailout.

  • Michael Heath

    So often people judge their leaders on how they visibly react and manage fire-fighting, ignoring the far more important task of systemically managing an operation in a way that reduces the need for fire-fighting.

    While the stimulus was being debated, I anticipated conservatives would attack the Administration for its supposed mismanagement of the stimulus effort; even if that criticism was anecdotal and not representative of the overall effort. Instead we’ve heard hardly a peep while much of the spending was done on-time and below projected costs.

    But according to Ed, this president’s been a “disaster”.

    Is the execution of the stimuls part of VP Joe Biden’s portfolio, along with the wind-down of the Iraq War? I think it was where I’m not sure.

  • slc1

    Re Michael Heath @ #3

    The differences between Heath and Brayton over the Obama administration can be summed up as follows: Heath’s priorities are not Brayton’s priorities and Brayton’s priorities are not Heath’s priorities.

  • valhar2000

    Re Slc1 @ #4: True, and that is actually a kind summary.

  • Crudely Wrott

    Another kind of summary could be, “because Heath and Brayton necessarily have differing standards based upon their personal experience, they come to different conclusions concerning the president”.

    Because no two lives are identical and because no two minds are equally and identically informed standards of judgement must sometimes certainly vary widely between parties that fundamentally agree on most basic principles.

    This is probably a good thing.