Stimulus Slammed: Republican Senators Release Report Alleging Waste

Report may raise eyebrows about stimulus spending. Defenders cite inaccuracies.

ByABC News via logo
August 2, 2010, 6:45 PM

Aug. 3, 2010 -- The Obama administration has credited its $862 billion stimulus program with pulling the economy out of the worst recession since the Great Depression. But a new report by two Republican senators argues the stimulus is riddled with wasteful projects that do not create jobs.

The report, released by Sens. Tom Coburn, R-Okla., and John McCain, R-Ariz., highlights 100 stimulus projects that they say have "questionable goals," are "being mismanaged or were poorly planned" and are even "costing jobs and hurting small businesses."

The Coburn-McCain report takes issue with stimulus spending on projects like one that entailed research on how cocaine affects monkeys. The Wake Forest University Baptist Medical Center was awarded $71,623 to study what the report calls, "Monkeys Getting High for Science."

Bonnie Davis, a spokeswoman for The Wake Forest University Baptist Medical Center, said the "small grant has helped protect very important research that will have significant impact on public health in regards to cocaine addiction and the issue of relapse."

Go a little further down the list and you'll find even bigger spending. The California Academy of Sciences is receiving nearly $1 million in stimulus funds to send researchers to the Southwest Indian Ocean Islands and East Africa to capture, photograph and analyze thousands of exotic ants.

There's also funding for yoga and hot flashes. Researchers at Wake Forest University have received nearly $300,000 to study whether integral yoga "can be an effective method to reduce the frequency and/or severity of hot flashes" in breast cancer survivors.

"I think all of them are waste," McCain told ABC News. "I think none of them really have any meaningful impact on creating jobs. And, of course, some are more egregious than others but all of them are terrible."

In perhaps the most eye-popping instance, the report says oil giant BP, the company behind the worst oil spill in the nation's history, is benefiting from $308 million given to Hydrogen Energy California -- a company it owns -- to build a California power plant that won't even break ground for another two years.

The funds were given to BP by the Department of Energy. While the natural gas electricity plant in Kern County would generate enough low-carbon electricity for 150,000 family homes, according to the company, construction will not start for another two years and the plant is not set to become operational until the end of 2014.

"It's nice to have BP investing in environmentally friendly anything, much less a power plant," McCain quipped.

The White House Recovery Office maintains Recovery Act funding for the project was offered in June 2009 and officially awarded in September 2009, long before the Gulf spill, and that the award went to a joint venture that is a 50/50 cost-share between Rio Tinto and BP -- so BP is not the primary awardee.

In addition, it turns out the $308 million awarded is only made up of $175 million in stimulus funds, with the remaining portion coming from other sources. In fact, the private sector has given the project seven times as much funding as the government has.

"The project directly and indirectly employs more than 150 people to date and $14 million stimulus funds received to date has created or preserved 47 of these jobs, as reported on," Jordan Feilders of Hydrogen Energy California told ABC News.

The project is projected eventually to create more than 1,500 jobs.

According to Feilders, however, construction is not slated to begin until 2012, a year later than the Coburn-McCain report indicated.