The Office of Management and Budget is directing federal agencies to “accelerate” spending on the 15 percent of Recovery Act dollars that remain unused.
“In light of the current economic climate and the urgent need to put Americans back to work, it is imperative that we exhaust all available options to drive the economy forward and create jobs,” OMB Director Jack Lew wrote in a Sept. 15 memo.
After the recovery bill was signed into law in February 2009, the administration was keen to quickly disburse funds to immediately pump money into a foundering economy.
President Barack Obama set a goal of spending 70 percent of stimulus funds by Sept. 30 of that year.
That goal was met, Lew wrote, and now about 85 percent of Recovery dollars have been paid out, with most of the remaining funds obligated for future projects.
Even though agencies met that initial goal, “there remain billions in discretionary Recovery Act funds that, although they have been obligated, have not yet been outlayed,” Lew wrote. And in light of the gloomy economic portrait, “it is critical that agencies spend these remaining funds as quickly and efficiently as possible,” he added.
Going forward, agencies need to establish “aggressive targets,” for outlaying the remaining funds for discretionary grant programs and should complete Recovery Act projects by Sept. 30, 2013, according to the memo.
In particular, agencies should look to reduce “administrative hurdles” that often delay expending funds, Lew wrote.
OMB said it will grant some waivers for the 2013 goal. Otherwise, the unspent dollars will return to the Treasury Department.
Last week, OMB issued a memo directing federal agencies to similarly “accelerate” payment to small-business contractors. OMB wants agencies to cut the time it takes to pay small businesses after receiving an invoice from 30 days to 15 days.