Democratic districts received nearly twice the amount

Democratic districts received nearly twice the amount of stimulus funds as GOP districts

By: MARK HEMINGWAY
Commentary Staff Writer - The Washington Examiner
December 16, 2009

A new analysis of the $157 billion distributed by the American Reinvestment and Recovery act, popularly known as the stimulus bill, shows that the funds were distributed without regard for what states were most in need of jobs.

“You would think that if the stimulus money was actually spent to create jobs, there would be more stimulus money spent in high unemployment states,” said Veronique de Rugy, a scholar at the Mercatus Center who produced the analysis. "But we don't find any correlation."

The Mercatus Center at George Mason University in Virginia is one of the nation's most respected economic and regulatory think tanks and has a Nobel prize-winning economist on staff. The econometric analysis was done using data provided by Recovery.gov -- the government website devoted to tracking the stimulus data -- as well as a host of other government databases.

Additionally, Mercatus found that stimulus funds were not disbursed geographically with any special regard for low-income Americans. “We find no correlation between economic indicators and stimulus funding. Preliminary results find no statistically significant effect of unemployment, median income or mean income on stimulus funds allocation,” said the report.

The Mercatus Center analysis also found that Democratic congressional districts received on average almost double the funding of Republican congressional districts. Republican congressional districts received on average $232 million in stimulus funds while Democratic districts received $439 million on average.

“We found that there is a correlation [relating to the partisanship of congressional districts],” de Rugy said. Her regression analysis found that stimulus funds are expected to decrease by 24.19 percent if a district is represented by a Republican.

“During the appropriations process, you're not surprised to see the Democrats are getting more money, but in this case a lot of the money we're looking at is going through HUD [Department of Housing and Urban Development], or Department of Education, Department of Transportation etc. and they're following a formula,” she said. “But the correlation exists, and not only does it exist -- when you look at how much money we're talking about, it's a pretty big deal.”

The analysis found that neither congressional leadership positions of local members nor presidential preference in 2008 were factors in stimulus allocation by congressional district.

Finally, the Mercatus analysis shows that a majority of the funds allocated went to public rather than private entities -- nearly $88 billion to $69 billion. While some of the money given to public entities may eventually filter down to the private sector, it's much less transparent how money given to public entities is spurring economic growth and job creation.