THE WHITE HOUSE

Office of the Press Secretary
________________________________________________________
For Immediate Release                           March 20, 2009

MEMORANDUM FOR THE HEADS OF EXECUTIVE DEPARTMENTS AND AGENCIES

SUBJECT:   Ensuring Responsible Spending of Recovery Act Funds
 
My Administration is committed to ensuring that public funds are expended responsibly and in a transparent manner. Last month, I signed into law the "American Recovery and Reinvestment Act of 2009," Public Law 111-5 (the "Recovery Act" or "Act"), an investment package designed to provide a necessary boost to our economy in these difficult times and to create jobs, restore economic growth, and strengthen America's middle class. The Recovery Act is designed to stimulate the economy through measures that, among other things, modernize the Nation's infrastructure, jump start American energy independence, expand high-quality educational opportunities, preserve and improve access to affordable health care, provide middle-class tax relief, and protect those in greatest need. It is not intended to fund projects for special interests.
In implementing the Recovery Act, we have undertaken unprecedented efforts to ensure the responsible distribution of funds for the Act's purposes and to provide public transparency and accountability of expenditures. We must not allow Recovery Act funds to be distributed on the basis of factors other than the merits of proposed projects or in response to improper influence or pressure. We must also empower executive department and agency officials to exercise their available discretion and judgment to help ensure that Recovery Act funds are expended for projects that further the job creation, economic recovery, and other purposes of the Recovery Act and are not used for imprudent projects.
To these ends, I hereby direct that for any further commitments, obligations, or expenditures of funds under the Recovery Act, the head of each executive department or agency shall immediately take all necessary steps, to the extent consistent with the Act and other applicable law, to comply with this memorandum.
Section 1. Ensuring Merit-Based Decisionmaking for Grants and Other Forms of Federal Financial Assistance Under the Recovery Act. (a) Executive departments and agencies shall develop transparent, merit-based selection criteria that will guide their available discretion in committing, obligating, or expending funds under the Recovery Act for grants and other forms of Federal financial assistance. Such criteria shall be consistent with legal requirements, may be tailored to the particular funding activity, and shall be formulated to ensure that the funding furthers the job creation, economic recovery, and other purposes of the Recovery Act.  To this end, merit-based selection criteria shall be designed to support particular projects, applications, or applicants for funding that have, to the greatest extent, a demonstrated or potential ability to: (i) deliver programmatic results; (ii) achieve economic stimulus by optimizing economic activity and the number of jobs created or saved in relation to the Federal dollars obligated; (iii) achieve long-term public benefits by, for example, investing in technological advances in science and health to increase economic efficiency and improve quality of life; investing in transportation, environmental protection, and other infrastructure that will provide long-term economic benefits; fostering energy independence; or improving educational quality; and (iv) satisfy the Recovery Act's transparency and accountability objectives.
(b) No considerations contained in oral or written communications from any person or entity concerning particular projects, applications, or applicants for funding shall supersede or supplant consideration by executive departments and agencies of such projects, applications, or applicants for funding pursuant to applicable merit-based criteria.
Sec. 2.   Avoiding Funding of Imprudent Projects. (a) Funds under the Recovery Act shall not be committed, obligated, or expended by any executive department or agency, and shall not be used by any State or local governmental or private grantee or awardee, to support projects of the type described in section 1604 of Division A of the Recovery Act, which states that "[n]one of the funds appropriated or otherwise made available in this Act may be used by any State or local government, or any private entity, for any casino or other gambling establishment, aquarium, zoo, golf course, or swimming pool."
 
(b) In exercising their available discretion to commit, obligate, or expend funds under the Recovery Act for grants and other forms of Federal financial assistance, executive departments and agencies, to the extent permitted by law, shall not approve or otherwise support funding for projects that are similar to those described in section 1604 of Division A of the Recovery Act.
 
(c) In exercising their available discretion to commit, obligate, or expend funds under the Recovery Act for grants and other forms of Federal financial assistance, executive departments and agencies, to the extent permitted by law, shall not approve or otherwise support any project, application, or applicant for funding that is imprudent or that does not further the job creation, economic recovery, and other purposes of the Act. To this end, executive departments and agencies shall exercise their available discretion to decline approving or otherwise supporting particular projects, applications, or applicants for funding unless the department or agency has affirmatively determined, in advance, that the project, application, or applicant has a demonstrated or potential ability to: (i) deliver programmatic results; (ii) achieve economic stimulus by optimizing economic activity and the number of jobs created or saved in relation to the Federal dollars obligated; (iii) achieve long-term public benefits by, for example, investing in technological advances in science and health to increase economic efficiency and improve quality of life; investing in transportation, environmental protection, and other infrastructure that will provide long-term economic benefits; fostering energy independence; or improving educational quality; or (iv) satisfy the Recovery Act's transparency and accountability objectives.
(d) Where executive departments or agencies lack discretion under the Recovery Act to refuse funding for projects similar to those described in section 1604 of Division A of the Act, or other projects that the executive department or agency deems imprudent or as not furthering the job creation, economic recovery, or other purposes of the Act, the department or agency shall consult immediately with the Office of Management and Budget (OMB) about the project and its funding requirements. Where legally permissible, the department or agency shall:
 
(i) delay funding of the project for 30 days, or the longest period permitted by law if less than 30 days, in order to ensure adequate opportunity for public scrutiny of the project prior to commitment of funds; and
 
(ii) publish a description of the proposed project (or project plan) and its funding requirements on the agency's recovery website as soon as practicable before or after commitment, obligation, or expenditure of funds for the project.
 
(e) Executive departments and agencies, including their respective Offices of Inspector General, shall monitor compliance with the prohibition in section 1604 of Division A of the Recovery Act, referenced in paragraph (a) above, by contractors, grantees, and other recipients of Federal financial assistance (recipients). If a department or agency believes that a recipient has not complied with section 1604, then the department or agency shall (i) promptly notify the Recovery Accountability and Transparency Board; and (ii) take appropriate corrective action that may include, but not be limited to, disallowing or otherwise recovering improperly spent amounts, imposing additional requirements on the recipient to ensure compliance with section 1604 (and other applicable prohibitions and obligations), initiating a proceeding for administrative civil penalties, and initiating a proceeding for suspension and debarment.
Sec. 3. Ensuring Transparency of Registered Lobbyist Communications. (a) An executive department or agency official shall not consider the view of a lobbyist registered under the Lobbying Disclosure Act of 1995, 2 U.S.C. 1601 et seq.,
concerning particular projects, applications, or applicants for funding under the Recovery Act unless such views are in writing.
(b) Upon the scheduling of, and again at the outset of, any oral communication (in-person or telephonic) with any person or entity concerning particular projects, applications, or applicants for funding under the Recovery Act, an executive department or agency official shall inquire whether any of the individuals or parties appearing or communicating concerning such particular project, application, or applicant is a lobbyist registered under the Lobbying Disclosure Act of 1995. If so, the lobbyist may not attend or participate in the telephonic or in-person contact, but may submit a communication in writing.
(c) All written communications from a registered lobbyist concerning the commitment, obligation, or expenditure of funds under the Recovery Act for particular projects, applications, or applicants shall be posted publicly by the receiving agency or governmental entity on its recovery website within 3 business days after receipt of such communication.
(d) An executive department or agency official may communicate orally with registered lobbyists concerning general Recovery Act policy issues; provided, however, that such oral communications shall not extend to or touch upon particular projects, applications, or applicants for funding, and further that the official must contemporaneously or immediately thereafter document in writing:  (i) the date and time of the contact on policy issues; (ii) the names of the registered lobbyists and the official(s) between whom the contact took place; and (iii) a short description of the substance of the communication. This writing must be posted publicly by the executive department or agency on its recovery website within 3 business days of the communication.
(e) Upon the scheduling of, and again at the outset of, any oral communications with any person or entity concerning general Recovery Act policy issues, an executive department or agency official shall inquire whether any of the individuals or parties appearing or communicating concerning such issues is a lobbyist registered under the Lobbying Disclosure Act. If so, the official shall comply with paragraph (d) above.
Sec. 4. General Provisions. (a) The Director of OMB shall assist and, as appropriate, issue guidance to the heads of executive departments and agencies to carry out their responsibilities under this memorandum. Within 60 days of the date of this memorandum, the Director of OMB shall review the implementation of this memorandum by executive departments and agencies and shall forward to me any recommendations for modifications or revisions to this memorandum.
 
(b) This memorandum does not apply to tax-related provisions in Division B of the Recovery Act.
 
(c) Nothing in this memorandum shall be construed to impair or otherwise affect: (i) authority granted by law or Executive Order to an executive department, agency, or the head thereof; or (ii) functions of the Director of OMB relating to budgetary, administrative, or legislative proposals.
 
(d) This memorandum shall be implemented consistent with applicable law and all OMB implementing guidance, and shall be subject to the availability of appropriations.
 
(e) This memorandum is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

Sec. 5. Publication. The Director of OMB is hereby authorized and directed to publish this memorandum in the Federal Register.

BARACK OBAMA

THE WHITE HOUSE
Office of the Press Secrectary
_________________________________________________________________
For Immediate Release                                     March 20, 2009
REMARKS BY THE PRESIDENT
AND THE VICE PRESIDENT
TO REPRESENTATIVES OF THE
NATIONAL CONFERENCE OF STATE LEGISLATURES
Dwight D. Eisenhower Executive Office Building
Room 350
12:55 P.M. EDT
THE VICE PRESIDENT: Thank you all for being here today. When the President signed the American Recovery and Reinvestment Act into law, he made it clear to the American people that we're -- he made it clear to everybody that they're counting on us. They're counting on us to get this right. And that's a tremendous responsibility –- and it extends, quite frankly, to everybody in this room, not just the two of us.
You're on the front lines to making sure that these resources are well spent. And you see every day, close up, even more than we do, how this economy is affecting so many people and how many critical needs have to be met. And so the folks who are struggling are your friends, they're your neighbors, they're your constituents. And you see it in your schools, you see it in your grocery stores, you see it in the ball fields, your churches, your communities. It's real. And we can't let them down. We simply can't let them down.
That's why we've said that these resources must be moved out the door not only with record speed, but with transparency and full accountability. There is the letter of the law, and then there is the spirit of the law. And we intend to make sure the spirit of the law is what's actually followed here, in addition to the letter.
The President has made it very clear: We believe this money is being -- if we believe this money is being misused -- and he's asked me to take some specific responsibility -- to actually call it out, make it clear -- us to make it clear it's being misused. That's why we have one of the tougher inspector generals that I've ever served with in my years in the government, Earl Devaney, who is overseeing these dollars. And it's part of the task the President has assigned me.
So let there be no doubt about it. We will take a spotlight and a bullhorn to anything we don't believe is fulfilling the purpose of this legislation: investing in jobs, bringing us out of this economic doldrum we find ourselves in, and laying a foundation for future economic growth. So, together, let's meet this tremendous responsibility. It's up to everyone in this room to get it done.
We've had a similar conversation, not just with the state legislators -- and you're all leaders in your state legislative bodies -- but with the mayors, with the governors, with the country executives, with NACo.
We are all counting on you, and them, to display the leadership this nation needs to get us through one of the toughest economic crises we've ever faced. And only with your help we're going to be able to secure a better future for every state, every district, every community, every family in this country.
We will succeed, but will only succeed with your leadership, and with the leadership of the President of the United States. So please join me in welcoming President Barack Obama. (Applause.)
THE PRESIDENT: Thank you so much. Please, everybody have a seat. Thank you so much.
It is wonderful to see so many of you -- a lot of old friends who I saw on the campaign trail, had a chance to meet all across the country, and I'm glad we're now gathered together to try to actually get something done.
You know, over the last two years -- last two years during the course of this campaign one of the things that I saw was how dedicated each and every one of you are to making sure that your states and your constituencies are well served by state government. And part of my job as President is to ensure that we're a good partner with you, because you're where rubber hits the road; you're where people actually see the benefits of a good education and high-quality health care, transportation, energy plans that actually make sense.
And so the purpose, the goal of this meeting is to ensure that we are all on the same page, because our folks are counting on it. And it's helpful for me also to talk to you because you guys see things from outside of Washington. And the more I can break out of the bubble, the better off I am.
Over the last two days I've been traveling in California, talking with Americans about the challenges they're facing as a result of this economic crisis. And these are challenges that all of you know very well. You're on the front lines of this recession. It's your states that are struggling with shrinking revenues, your budgets are being cut, services that your families depend on in a moment of need are being placed under tremendous strain. And as a former state legislator, I know how difficult your work can be, and how important it is to have a strong partner in Washington. I want you to know I'm committed to being that kind of partner.
And that's why we're taking unprecedented steps not just to help your states make it through these difficult times, but to make sure that you come out stronger on the other end, more prosperous than you were before. That's the purpose of the budget that I'm submitting to Congress. It's a budget that makes hard choices about where to save and where to spend. Because of the massive deficit we inherited and the cost of this financial crisis, we are having to go through the books line by line, page by page, so that we can cut our deficit in half by the end of my first term and reduce it by $2 trillion over the next decade.
What we will not cut are investments that will lead to real growth and real prosperity over the long term. That's why our budget makes a historic commitment to comprehensive health care reform. That's why it enhances America's competitiveness by reducing our dependence on foreign oil and building on a clean-energy economy. And that's why it makes a down payment on a complete and competitive education for every child in America -- from the cradle up through the time that they get a career. In short, our budget will strengthen each of our 50 states for generations to come.
And that's also the purpose of the Recovery Act that I signed into law last month. It's a plan that will not only help states and painful budget cuts, but also make a meaningful difference in the lives of Americans across this country. Because of what we did, there will be teachers in the classroom and police on the beat who otherwise wouldn't be pursuing their essential missions. Because of what we did, neighborhood health clinics are creating jobs and providing affordable care to those who need it. And because of what we did, 95 percent of hardworking families will receive a tax cut -- a tax cut that they'll see in their paychecks starting on April 1st. So altogether we expect to create or save 3.5 million jobs -- 90 percent of which are in the private sector.
It's the most sweeping recovery plan in our nation's history, and with a plan of such size comes an obligation to be vigilant with every dime we spend. That will require all of us -- me, Joe, each of you -- to hold yourselves accountable. It will require a new level of transparency in how we invest taxpayer dollars. It will require a new sense of responsibility here in Washington, but also in the 50 states. And that's a standard that we've sought to uphold from the very beginning. That's why I asked Joe to ensure that we are implementing our Recovery Act quickly, and implementing it well.
And that's why I've appointed a proven and aggressive Inspector General to help prevent waste and fraud before it happens and root it out when it does. And that's why, on the very day I signed our Recovery Act into law, we launched a website called recovery.gov -- so that Americans can see where their tax dollars are going and make sure we're delivering results. And 46 states have launched their own web sites -- linked to recovery.gov -- to help people keep track of how money is being spent down to the local level.
Today, as part of our continuing efforts to make government more accountable, we're taking the next step in implementing the Recovery Act. I'm issuing a directive that will provide guidelines to federal agencies for what does and what does not constitute an acceptable use of taxpayer money; guidelines that will help ensure that we are proving ourselves worthy of the great trust the American people have placed in us.
That starts with a fundamental commitment. Decisions about how Recovery Act dollars are spent will be based on the merits. Let me repeat that: Decisions about how Recovery money will be spent will be based on the merits.
They will not be made as a way of doing favors for lobbyists. Any lobbyist who wants to talk with a member of my administration about a particular Recovery Act project will have to submit their thoughts in writing, and we will post it on the Internet for all to see. (Applause.) If any member of my administration does meet with a lobbyist about a Recovery Act project, every American will be able to go online and see what that meeting was about. These are unprecedented restrictions that will help ensure that lobbyists don't stand in the way of our recovery.
And this plan cannot and will not be an excuse for waste and abuse. Whenever a project comes up for review, we're going to ask a simple question: Does it advance the core mission of the Recovery Act? Does it jumpstart job creation? Does it lay the foundation for lasting prosperity?
The initiatives that will get priority will be ones that have demonstrated how they meet this test; initiatives that maximize the number of jobs we are creating so we can get the most bang out of every taxpayer buck; initiatives that help make health care more affordable, and rebuild our crumbling roads and bridges, or provide other enduring benefits to the American people.
Now, no plan is perfect. And I can't stand here and promise you that not one single dollar will slip through the cracks. But what I can promise you is that we will do everything in our power to prevent that from happening -- which is why we're building on the provisions in the Recovery Act to forbid the use of these funds to build things like dog parks. Now, let me be clear: I don't have anything against dog parks. (Laughter.) I intend to get a dog. (Laughter.) What I do oppose is building them with funds from the Recovery Act -- because that's not how we'll jumpstart job creation and that's not how we'll put our economy on a firmer footing for the future.
And because I'm not willing to ask all of you to do what I'm not willing to do myself, we're going to set an example here in the White House. Now, I'll give you an example. Recently, a proposal was submitted requesting Recovery Act funds to modernize old electrical and heating systems in the East Wing of the White House. Now, this is a much-needed project that's long overdue -- and I hope Congress funds it in the future. But because this request does not meet the high standards that I have set -- because it will not create many jobs or advance our recovery -- it will not be funded under the Recovery Act.
So the rules I'm putting in place today will help create a new culture of accountability. And I'm pleased that the U.S. Conference of Mayors has committed to joining us in this effort. I don't need to remind you that the American people are watching what we do. They need this plan to work. They're skeptical -- and understandably, because they've seen taxpayer dollars frittered away before. They expect to see their hard-earned money spent efficiently. And this extraordinary moment requires extraordinary responsibilities on all our part. There's little room for error here -- especially in a time for crisis.
During World War II, a largely unknown senator grew concerned that waste, corruption and scandal threatened to choke off our nation's war efforts before they'd truly begun. Congress didn't think a whole lot of the matter and granted him far less money than he'd asked for. But this little-known member of Congress named Harry Truman had the courage of his convictions. So he traveled all across the country, gathered information, holding hundreds of hearings and issuing dozens of reports. And when it was all over, he had saved billions of dollars and deterred corruption and bolstered America's confidence in the conduct of the war.
What Harry Truman understood was that spending tax dollars wisely isn't just about keeping our books straight, it's about fulfilling our obligations as keepers of the public trust. And while I do not know how long the road to recovery will be, I do know that we're in a fight right now to get this economy back on track. And if we act with the same sense of responsibility that Harry Truman showed during wartime all those years ago, and if we build a partnership that stretches from the statehouse to the White House, then we'll turn this economy around and the American people will emerge from this crisis stronger than we were before.
So thank you very much. I'm looking forward to working with you. Thank you, guys. (Applause.)
END
1:09 P.M. EDT

Bringing the Outside In

Posted by Jesse Lee on March 20, 2009 at 02:00 PM EDT
The President has made a point of looking for ways to puncture the presidential bubble that has so often resulted in America’s leaders losing touch with the majority of the America people, whether it’s been by fighting to keep his blackberry so he can always hear from a variety of voices outside the White House, or by traveling to town halls to get out of Washington altogether. This afternoon, when the President and the Vice President met with representatives from the National Conference of State Legislatures, he brought some lessons home with him from his town halls in California this week, namely the need for investments and the need for accountability in those investments:
Over the last two days I've been traveling in California, talking with Americans about the challenges they're facing as a result of this economic crisis.  And these are challenges that all of you know very well.  You're on the front lines of this recession.  It's your states that are struggling with shrinking revenues, your budgets are being cut, services that your families depend on in a moment of need are being placed under tremendous strain.  And as a former state legislator, I know how difficult your work can be, and how important it is to have a strong partner in Washington.  I want you to know I'm committed to being that kind of partner.
The President heard a lot about the need for those investments in California, but he also made clear today in the meeting that the accountability effort, which only began with Recovery.gov, will have teeth:
That starts with a fundamental commitment.  Decisions about how Recovery Act dollars are spent will be based on the merits.  Let me repeat that:  Decisions about how Recovery money will be spent will be based on the merits.
 
They will not be made as a way of doing favors for lobbyists.  Any lobbyist who wants to talk with a member of my administration about a particular Recovery Act project will have to submit their thoughts in writing, and we will post it on the Internet for all to see.  (Applause.)  If any member of my administration does meet with a lobbyist about a Recovery Act project, every American will be able to go online and see what that meeting was about.  These are unprecedented restrictions that will help ensure that lobbyists don't stand in the way of our recovery.
 
And this plan cannot and will not be an excuse for waste and abuse.  Whenever a project comes up for review, we're going to ask a simple question:  Does it advance the core mission of the Recovery Act?  Does it jumpstart job creation?  Does it lay the foundation for lasting prosperity?
 
The initiatives that will get priority will be ones that have demonstrated how they meet this test; initiatives that maximize the number of jobs we are creating so we can get the most bang out of every taxpayer buck; initiatives that help make health care more affordable, and rebuild our crumbling roads and bridges, or provide other enduring benefits to the American people.
The President thanked the U.S. Conference of Mayors for their commitment to the effort as well, with Vice President Biden having sent a letter (pdf) to them today detailing the accountability standards that will be applied.  The President pledged that he would lead by example, forgoing much needed repairs in the Executive offices because they simply don’t fit the mission of the Recovery Act, but he held up Harry Truman, who crusaded against waste, fraud, and profiteering in the war effort as an even better example: "What Harry Truman understood was that spending tax dollars wisely isn’t just about keeping our books straight, it’s about fulfilling our obligation as keepers of the public trust." 
The President and Vice President speak to state legislators
(The President and Vice President speaks to state legislators about implementation of the Recovery Act in the Eisenhower Executive Office Building.  White House Photo, Chuck Kennedy, 3/20/09)
 
See more about Fiscal Responsibility  
THE WHITE HOUSE

Office of the Press Secretary
__________________________________________________________
For Immediate Release                              March 12, 2009

REMARKS BY THE PRESIDENT
AT RECOVERY ACT IMPLEMENTATION CONFERENCE

Room 450
Dwight D. Eisenhower Executive Office Building
11:10 A.M. EDT
 
THE PRESIDENT:  Hello, everybody.  Please, have a seat.  I've got my Illinois contingent over here.  Please, everybody have a seat.  Thank you so much.

I just wanted to stop by and say hello.  I know that you heard from Joe Biden at the top of this session, and I wanted to let you know that we are very grateful to all of you for taking the time to come.  We hope that this is being a productive session.  And I want to emphasize that all of you are at the front lines of what is probably the most important task that we have in this country over the next couple of years, and that's getting the economy started again.

I think all of you in your respective roles are hearing stories of people who are going through extraordinary hardship in your respective states.  And we passed this American Recovery and Reinvestment Act because we strongly believe that this is an opportunity not only to deal with the immediate crisis, but also to lay the foundations for long-term growth and prosperity in this country.

And, you know, the American people are behind what we're doing.  And the question then becomes are we going to be able to deliver for them.  They are going to be watching very carefully.  And there are those who believe that government doesn't have a role to play in this recovery.  There are those who believe that we should be focusing exclusively on Wall Street when it comes to this crisis, and that we don't have time to worry about infrastructure, and we don't have time to worry about our health systems, and we don't have time to think about how we're going to improve our educational systems.

And all of you, what you do in the coming weeks and coming months, over the next couple of years is going to make a huge difference in whether or not the trust that the American people have placed in us is justified.

So my main message to all of you is I think you're up to the task; I think you guys will do extraordinary work with using these precious tax dollars that the American people have given up in order to deliver on the kind of economic growth -- short-term and long-term -- and job creation that's going to be so important.

But we're going to need to work really hard and we're going to have to make sure that every single dollar is well spent.  We've got to go above and beyond what I think is the typical ways of doing business in order to make sure that the American people get the help that they need and that our economy gets the boost that it needs.

And so I've said before -- I know Joe emphasized this to you earlier -- if we see money being misspent, we're going to put a stop to it, and we will call it out and we will publicize it.  On the other hand, if the money is being spent as it needs to be spent -- to rebuild our roads and our bridges and our schools, and making sure that we are putting in place the kinds of infrastructure foundations that are necessary for economic growth over the long term -- then I think all of us will benefit and our voters and our constituents, the people we work for, are going to be extraordinarily grateful.

So you've got this -- this wonderful mission and, you know, it's rare where you get a chance to put your shoulder to the wheel of history and move it in a better direction.  This is such an opportunity.  I hope all of you seize it.  I know this is very tough work because you've got a lot of money coming out quickly, it's got to be spent wisely, you don't always have the infrastructure, the organizational structures to accommodate all this stuff right away, and you're going to have to build that -- and do so in record time.

But looking around, you guys look like pretty capable people.  So I have great confidence in you and I think you're going to do a wonderful job.  We appreciate you; good luck; and I'll be seeing you at some ribbon cuttings.  All right.  Thank you.  (Applause.)

END
11:14 A.M. EDT

THE WHITE HOUSE
Office of the Vice President
_______________________________________________________________
For Immediate Release                                   March 12, 2009
OPENING REMARKS BY THE VICE PRESIDENT
AT THE WHITE HOUSE
RECOVERY AND REINVESTMENT ACT IMPLEMENTATION CONFERENCE
Room 450
Dwight D. Eisenhower Executive Office Building
9:46 A.M. EDT
THE VICE PRESIDENT: Thank you, Mr. Secretary. Thank you. (Applause.) You all remember that old joke of state officials -- hey, Matt, how are you? -- all know that old joke, "I'm from the federal government, I'm here to help." (Laughter.)
Ladies and gentlemen, we have an awesome responsibility here. This has never been done before. We have never attempted in the history of this country to revive -- as one of the three legs of the stool -- to revive our economy. We have never attempted to, as transparently and as accountably, get as much money out into the states as quickly in order to help you with countercyclical help, in terms of your budgets, in terms of your employees, whether it's cops or teachers. Nor have we ever invested this much money since Eisenhower in the -- invested in the Interstate Highway System and the infrastructure of this country. This is a first.
And I want to thank the Secretary for being here today, and for, quite frankly, taking the job that he's taken. It's not often I get introduced by a Nobel laureate. But we have, I think, one of the finest and most qualified Secretaries of Energy -- I would say the most qualified since the department came into existence. And he is a no-nonsense guy that knows what he's doing and, like all of you, wants to get this done.
It's really amazing the turnout here -- 49 of the 50 states are represented here, which says to me your governors are taking this in a deadly earnest, deadly serious way. They understand the value to your state, but also the responsibility that we have. You know, I love it, my grandchildren laugh when they -- when President Obama says nobody messes with Joe -- (laughter)
-- talk to my grandkids, then my kids, then my wife, then my staff, but I can tell you one thing, my passion to make sure this is done right, it may exceed my abilities. But I'm telling you this is not anything that I am fooling around with, nor I expect any of you.
Because, folks, look, let's get this straight. We're given a great opportunity here. We've asked a lot of the American people, a great deal of the American people, in supporting this effort. And so this is a different deal. This is not your usual federal grant going to states. And I want to be blunt with you, off-script here: The fact of the matter is all that is legal is not acceptable. Let me say it again. Just because it may be legal, it is not acceptable -- some of it.
For example, you're going to see regulations announced on Friday by the President, with me with him, about things you'd ordinarily be able to spend federal money on, but we are not going to let you spend federal money on. And I suspect most of you would not want to do it anyway. A little hint: No swimming pools in this money; a few other things.
So it really is important -- I know you know it better than we do, because you're there, you're the ones that are facing these high unemployment rates. Some of your states, some of the poorer states in the nation have the highest unemployment rate, and some wealthy states have even higher unemployment rates. This is a crisis. This is a crisis. And I know you feel as I do, that it requires a exercise of discipline and accountability and transparency like nothing we have ever done in terms of federal-state relations. And I am not kidding about that -- and I know you're not either -- but this is a big deal. The work you're doing is going to be critical to the economic well-being of the country.
Let me point out one other thing. If we don't get this right, folks, this is the end of the opportunity to convince the Congress that anything should go to the states. Your state legislatures are struggling. Your governors are struggling. The members of the House and Senate are struggling. They don't want to take up one another's burden. Everyone in this room, I hope you are, in the best sense of the word, good politicians, as well as having very sharp pencils. So I hope you'll understand the dynamic at play here.
So if this -- six months from now, if the verdict on this effort is that we've wasted the money, we built things that were unnecessary, or we've done things that are legal but make no sense, then, folks, don't look for any help from the federal government for a long while. They're going to make sure -- the folks in the House and in the Senate are going to make sure you wear the jacket, not them.
This is a big deal -- this is a big deal. It's also being closely watched not just by me, but by the President, and by Mr. Devaney, who is one of the most respected IGs we have in the federal government, and is known by many of you. And it's also being watched by the taxpayers and it's being watched by the media.
And that's a good thing -- that's a good thing, because the resources being made available through the American Recovery and Reinvestment Act are a critical piece -- a critical piece of how we're going to get through this economic crisis, and just as importantly, how we're going to build the economy of the future, which the Secretary referenced.
This is not just an opportunity to help us get out of this mess we're in, but it's an opportunity to begin to lay the foundation for a competitive America in the 21st century. That's something we can never lose sight of. Everyone in this room is has a huge responsibility. We all have the responsibility to make sure this legislation is implemented with maximum efficiency. And we have the responsibility to make sure there's unprecedented transparency for the America people.
Further, there should be no confusion about how this money should be spent. These funds are designed for one of three purposes. First, to -- money to put in people's pockets. That's why we extended unemployment compensation, and 95 percent of the America people are going to see their paychecks fatter, because their payroll taxes will be cut beginning April 1st. They'll have more money in their pocket to spend.
Second, the purpose is to create jobs in the near term, and that's why we -- not just now, but in the near term, over the next 18 months. That's why we've dedicated so much money to rebuilding America's schools, roads, highways, and bridges.
And third, to make investments in those areas that would create the jobs of the future. That's why we've invested in new technologies like wind and solar, a new smart grid for America's electricity, a new superhighway of electricity transmission in the United States of America, and health care technology, to lay the groundwork for saving billions of dollars -- it's the one thing that will get us out of this long-term trajectory of nothing but rising deficits.
And today I'm proud to be announcing two allocations of resources that are a good example of how this money should be spent. First, through the Department of Energy, $8 billion in weatherization funding and energy efficiency grants are going to go out to the states. This is funding that will both create jobs now, and make critical investments in making America more energy efficient in the future.
As the Secretary said, the ultimate answer of our success will be in the black and white of the bill that our constituents receive in terms of their energy costs at the end of the day. Five billion [dollars] of this funding will go to weatherizations of homes for insulation, ceiling leaks, and modernizing heating and air-conditioning equipment. It's an investment that will pay for itself many times over. It's also an investment that will create tens of thousands of jobs right now -- jobs right now.
And additional $3 billion of this money is for state energy programs. That's money that can be used by you for rebates to consumers who are doing energy audits for developing renewable energy projects, and for making state and local government buildings more energy efficient.
You know how to do this well. You are, as they say, the laboratories. You know how to do well -- we're looking to you. We're looking to you not only to receive this money and spend it accountably and transparently, but innovatively. And we hope that some of you, your success will be shared with other states. So there's an opportunity here -- there's an opportunity for real innovation.
Of this $8 billion investment, we'll start with an $800 million allocation right now, with the rest being made available once we get the detailed plans from states and local governments on how you will allocate the money, and give you time to -- you'll hear today how and what kind of plans you need to submit in order to be able to do that.
Second, through the Department of Transportation, the first funding allocations for airport infrastructure projects are being made today -- $10 million to the Pittsburgh International Airport, $2 million to the Allegheny County Airport. This money will be used for runway, taxiway, and ramp repair. Again, this is money that would create jobs now, but it's also an investment in long-term safety of our airports and of their economic viability. Altogether, $1 billion in Recovery Act money has been allocated to airport projects.
There are 3,000 -- I need not tell many of you -- there are 3,400 airports all across your states that will be eligible to compete for this money. But our main purpose here today is not funding announcements, or even to hear from people like me. It's for you to have direct access to the various agencies running these recovery programs.
Many of you have contacted me personally and said, Joe, how do we do this? What are the rules, what are the regs? How do we get this done? What do we do? We want to do it by the numbers; tell us what we need to know. Well, you have an opportunity today to ask questions about the funds that we'll be overseeing, the requirements for receiving these funds and the steps you'll need to take. And it will be a long day, it will be a long day, but an important day, in my view.
But I promise you, you'll leave here with helpful information you need, a commitment by key administration officials to get you what you need, and it may be a bit dry, but it's the nuts and bolts of the hard work of making this program work. And that's what the purpose of today is.
I will be leaving here to meet with -- I assemble the Cabinet about once a week. It's unusual, I know, for Vice Presidents to call Cabinet meetings, but we feel this is so important that I meet with the Cabinet members to sit down and I want to know every week what they're doing, what their plans are, how much money is out the door, how they're attempting to account for it. I met yesterday for a long time with the IG who's in charge of this, Mr. Devaney, and him putting together his staff and the resources he needs to oversee this. As he says, we're not looking to find corruption, we're looking to prevent it. We're looking at the front end of this to prevent errors -- to prevent errors. This is not a witch hunt. This is to make sure that we spend this money well.
And so we're taking this very seriously. I know some of you may be frustrated -- you don't have all the answers right away. But keep in mind, we've been in office 50 days -- 50 days and this has been around about 30 days, maybe less than that. And so we're moving as fast as we can. And that's why we're so thankful you're here to help us -- help us figure out how to move this so everybody knows what the rules of the road are.
Just as importantly, as I said earlier, we want to hear from you. We're urging you and your governors to regularly update us regarding projects that are being funded through the Recovery Act. We want to keep track of the innovations and successes you have. Again, I'm not being solicitous. Some of you in the states have done innovative things that are beyond the capacity of the federal government to do quickly. And we want this to be a clearinghouse, as well. Some of you are going to do very well in some things and come up with some very good ideas, and others aren't, and others are going to be in other areas. We want to share all this information as rapidly and as close to real time as we can. That's a great way for us and for others states to learn, as well.
It's important for the people in your state to know about the jobs that are being saved, as well; restored, as well; created. Some of these 3.5 million jobs are just jobs we're going to keep from being lost. Most economists have acknowledged that had we done nothing in this area, we would have lost another 4 to 5 million jobs this year -- an additional 4 to 5 million jobs, on top of what has already been lost since the recession has been officially declared as having started in the fall.
So, folks, we have a lot to show for -- show to our constituents. It's important, as I said, that they see that citizens know in your state what long-term investments are being made and that there's a prospect, in their view, that it will pay off. People will support us. They know this isn't going to turn around quickly. I can make an analogy to the crime bill. Years ago some of you I worked with on the crime bill. I wrote that bill in the early '90s; it got passed in '94 because of the great leadership of President Clinton, and we passed the bill. And everybody got all nervous after it got passed -- said, Biden, you talked us into this and we're spending $30 billion and the crime rate is not going to go down in a year. And the crime rate could not go down in a year, it would not go down in a year. It was going to take time to build this in.
But guess what. We were transparent with all of you, we were transparent with the American people. We pointed out exactly how many cops we were funding, how many prisons were being built, how much money was being spent with regard to prevention. We made it absolutely transparent. We went all over the country. You, governors, congresspersons, all made it clear to the American people every time we spent a dollar with a new badge. And the reason why it worked is that people said, okay, this makes sense; I think this will produce results. And it did. It ended up for nine years reducing the violent crime rate on average 8.5 percent per year.
But it didn't happen in the first year. It's an analogous circumstance here. It's an analogous -- we're going to have a rough year. I don't have to tell you. DEFAC -- well, in Delaware it's called DEFAC -- but all around the country you have your outside groups and internal groups giving you revenue estimates and cost estimates. And you're not looking at a rosy picture. People will support us if it appears as though what we're doing makes sense, we're accountable, and we're totally transparent.
And so what we want to do is we want to make sure that they see as quickly and as clearly as possible how we're spending the money in each of our respective states. That way, with the implementation efforts you make, we can understand the problems that we're going to face, because we're going to run into problems here, and we can move more quickly to solve them. It's also going to make it possible for us to share your concerns with other states that are being -- that are experiencing similar issues, and how they're going to be answered.
So let me finish by reemphasizing one point: We are all on the line. The American people are looking to us to get this right, and you need to do that. We have to do our part to give you the best guidance we can and the most cooperation we can. You're an important part of helping this nation through one of the worst economic crises in the history of this country. It -- the Great Depression was worse, but it was not as complicated -- sounds ridiculous, but it was not as complicated as this is.
And so, ladies and gentlemen, we have, as I said, an incredible responsibility, so let's make sure we meet it.
And now let me introduce our first presenter, a man who is doing a spectacular job as one of the real day-to-day leaders in making this Recovery Act a reality, and our administration is really fortunate to have his talents -- and I mean that sincerely; it's not hyperbole -- and that is the Deputy Director of OMB, Rob Nabors. And I think Rob is around here -- is he? There you are, Rob. How are you? Come on up and do the hard work. (Applause.)
Folks -- and then let me make one more comment. I really instruct your -- tell your governor -- I know you can't instruct your governors -- (laughter.) Tell your governors, literally, if they have a problem if they're confused, if you're confused about what needs to be done, literally pick up the phone and call me. Call me. I'm not -- that is not -- look, I've been -- I was a senator for 36 years in a state where I commuted every day and the only billboard ever used when I ran for office was "Joe." I'm used to -- I'm used to being accessible. I really mean it -- have your governors call me, and we'll get it straightened out, because we got to get it right.
Sorry, Rob, that's all yours, buddy. I'm heading off to talk to the Cabinet. Thank you, all, very, very much. (Applause.)
END
10:05 A.M. EDT

President Obama declares turning point on earmark reform

Jesse Lee
Jesse Lee
March 11, 2009
07:28 PM EDT
Today President Obama signed the final version of last year’s budget, as posted here on Friday while it was making its way through Congress, in order to keep the government functioning. As he explained, there was much to speak well of in the bill:
Now, yesterday Congress sent me the final part of last year's budget; a piece of legislation that rolls nine bills required to keep the government running into one, a piece of legislation that addresses the immediate concerns of the American people by making needed investments in line with our urgent national priorities.
That's what nearly 99 percent of this legislation does -- the nearly 99 percent that you probably haven't heard much about.
However, the President continued, "What you likely have heard about is that this bill does include earmarks." He made several points, noting that earmarks need not be inherently evil if they are simply transparent requests for help in areas of legitimate need, and that many who would focus all of their energies railing against earmarks often fight to the teeth for their own.
But the President made clear that there have also been too many examples where earmarking led to corruption, and that while significant progress had been made in the last Congress there is still ample room for reform.   He called on Congress to act this year on the principles he set forth, principles that Congressional analyst and historian Norm Ornstein called "a solid, practical and comprehensive set of new steps to take us much closer to the kind of meaningfully balanced system the American people deserve," adding that "The president's proposal is real reform." President Obama laid the principles out clearly:
In my discussions with Congress, we have talked about the need for further reforms to ensure that the budget process inspires trust and confidence instead of cynicism. So I believe as we move forward, we can come together around principles that prevent the abuse of earmarks.
These principles begin with a simple concept: Earmarks must have a legitimate and worthy public purpose. Earmarks that members do seek must be aired on those members' websites in advance, so the public and the press can examine them and judge their merits for themselves. Each earmark must be open to scrutiny at public hearings, where members will have to justify their expense to the taxpayer.
Next, any earmark for a for-profit private company should be subject to the same competitive bidding requirements as other federal contracts. The awarding of earmarks to private companies is the single most corrupting element of this practice, as witnessed by some of the indictments and convictions that we've already seen. Private companies differ from the public entities that Americans rely on every day –- schools, and police stations, and fire departments.
When somebody is allocating money to those public entities, there's some confidence that there's going to be a public purpose. When they are given to private entities, you've got potential problems. You know, when you give it to public companies -- public entities like fire departments, and if they are seeking taxpayer dollars, then I think all of us can feel some comfort that the state or municipality that's benefitting is doing so because it's going to trickle down and help the people in that community. When they're private entities, then I believe they have to be evaluated with a higher level of scrutiny.
Furthermore, it should go without saying that an earmark must never be traded for political favors.
And finally, if my administration evaluates an earmark and determines that it has no legitimate public purpose, then we will seek to eliminate it, and we'll work with Congress to do so.
Related Topics: Fiscal Responsibility
THE WHITE HOUSE
Office of the Press Secretary
_______________________________________________________________
For Immediate Release                    March 11, 2009
Remarks by the President
On Earmark Reform
Room 350
Dwight D. Eisenhower Executive Office Building
11:23 A.M. EDT
THE PRESIDENT: Good morning. I ran for President pledging to change the way business is done in Washington and build a government that works for the people by opening it up to the people. And that means restoring responsibility and transparency and accountability to actions that the government takes. And working with the Congress over my first 50 days in office, we've made important progress toward that end.
Working together, we passed an American Recovery and Reinvestment Act that's already putting people back to work doing the work that America needs done. We did it without the customary Congressional earmarks -- the practice by which individual legislators insert projects of their choosing. We're implementing the Recovery Act with an unprecedented level of aggressive oversight and transparency, including a website -- recovery.gov -- that allows every American to see how their tax dollars are spent and report on cases where the system is breaking down.
I also signed a directive that dramatically reforms our broken system of government contracting, reining in waste and abuse and inefficiency; saving the American taxpayers up to $40 billion each year in the process.
And I've laid out plans for a budget that begins to restore fiscal discipline so we can bring down the $1.3 trillion budget deficit we've inherited and pave the way for our long-term prosperity. For the first time in many years, we've produced an honest budget that makes the hard choices required to cut our deficit in half by the end of my first term in office.
Now, yesterday Congress sent me the final part of last year's budget; a piece of legislation that rolls nine bills required to keep the government running into one, a piece of legislation that addresses the immediate concerns of the American people by making needed investments in line with our urgent national priorities.
That's what nearly 99 percent of this legislation does -- the nearly 99 percent that you probably haven't heard much about.
What you likely have heard about is that this bill does include earmarks. Now, let me be clear: Done right, earmarks have given legislators the opportunity to direct federal money to worthy projects that benefit people in their districts, and that's why I've opposed their outright elimination. And I also find it ironic that some of those who rail most loudly against this bill because of earmarks actually inserted earmarks of their own –- and will tout them in their own states and their own districts.
But the fact is that on occasion, earmarks have been used as a vehicle for waste, and fraud, and abuse. Projects have been inserted at the 11th hour, without review, and sometimes without merit, in order to satisfy the political or personal agendas of a given legislator, rather than the public interest. There are times where earmarks may be good on their own, but in the context of a tight budget might not be our highest priority. So these practices hit their peak in the middle of this decade, when the number of earmarks had ballooned to more than 16,000, and played a part in a series of corruption cases.
In 2007, the new Democratic leadership in Congress began to address these abuses with a series of reforms that I was proud to have helped to write. We eliminated anonymous earmarks and created new measures of transparency in the process, so Americans can better follow how their tax dollars are being spent. These measures were combined with the most sweeping ethics reforms since Watergate. We banned gifts and meals and made sure that lobbyists have to disclose who they're raising campaign money from, and who in Congress they send it to. So we've made progress. But let's face it, we have to do more.
I am signing an imperfect omnibus bill because it's necessary for the ongoing functions of government, and we have a lot more work to do. We can't have Congress bogged down at this critical juncture in our economic recovery. But I also view this as a departure point for more far-reaching change.
In my discussions with Congress, we have talked about the need for further reforms to ensure that the budget process inspires trust and confidence instead of cynicism. So I believe as we move forward, we can come together around principles that prevent the abuse of earmarks.
These principles begin with a simple concept: Earmarks must have a legitimate and worthy public purpose. Earmarks that members do seek must be aired on those members' websites in advance, so the public and the press can examine them and judge their merits for themselves. Each earmark must be open to scrutiny at public hearings, where members will have to justify their expense to the taxpayer.
Next, any earmark for a for-profit private company should be subject to the same competitive bidding requirements as other federal contracts. The awarding of earmarks to private companies is the single most corrupting element of this practice, as witnessed by some of the indictments and convictions that we've already seen. Private companies differ from the public entities that Americans rely on every day –- schools, and police stations, and fire departments.
When somebody is allocating money to those public entities, there's some confidence that there's going to be a public purpose. When they are given to private entities, you've got potential problems. You know, when you give it to public companies -- public entities like fire departments, and if they are seeking taxpayer dollars, then I think all of us can feel some comfort that the state or municipality that's benefitting is doing so because it's going to trickle down and help the people in that community. When they're private entities, then I believe they have to be evaluated with a higher level of scrutiny.
Furthermore, it should go without saying that an earmark must never be traded for political favors.
And finally, if my administration evaluates an earmark and determines that it has no legitimate public purpose, then we will seek to eliminate it, and we'll work with Congress to do so.
Now I know there are members in both Houses with good ideas on this matter. And just this morning, the House released a set of recommendations for reform that I think hold great promise. I congratulate them on that.
Now I'm calling on Congress to enact these reforms as the appropriation process moves forward this year. Neither I nor the American people will accept anything less.
It's important that we get this done to ensure that the budget process works better, that taxpayers are protected, and that we save billions of dollars that we so desperately need to right our economy and address our fiscal crisis. Along with that reform, I expect future spending bills to be debated and voted on in an orderly way, and sent to my desk without delay or obstruction, so that we don't face another massive, last-minute omnibus bill like this one.
I recognize that Congress has the power of the purse. As a former senator, I believe that individual members of Congress understand their districts best. And they should have the ability to respond to the needs of their communities. I don't quarrel with that. But leadership requires setting an example and setting priorities, and the magnitude of the economic crisis we face requires responsibility on all our parts.
The future demands that we operate in a different way than we have in the past. So let there be no doubt: This piece of legislation must mark an end to the old way of doing business, and the beginning of a new era of responsibility and accountability that the American people have every right to expect and demand.
If we're going to solve our economic crisis; if we're going to put Americans back to work; if we're going to make the investments required to build a foundation for our future growth -- then we must restore the American people's faith that their government is working for them, and that it's on their side. That's the government I promised. That's the government I intend to lead.
Thank you very much, everybody.
END                    11:33 A.M. EDT

President Obama signs continuing resolution

Jesse Lee
Jesse Lee
March 06, 2009
08:04 PM EDT
In light of an imminent government shut-down as result of delays in passing last year’s appropriations bills, Congress has passed and President Obama has signed a continuing resolution to maintain the prior year’s funding levels through Wednesday while negotiations continue on last year’s budget work. The Office of the Press Secretary has just issued the following bill announcement:
On Friday, March 6, 2009, the President signed into law:
H.J.Res. 38, which provides FY 2009 appropriations for continuing projects and activities of the Federal Government through Wednesday, March 11, 2009. The Federal Government was currently funded under Public Law 110-329, the "Consolidated Security, Disaster Assistance, and Continuing Appropriations Act, 2009" which was due to expire March 6, 2009, at midnight. By signing this resolution, it allows additional time for the Congress to complete action on H.R. 1105, the FY 2009 Omnibus Appropriations Act, which provides funding for the nine remaining FY 2009 appropriations bills that have yet to be enacted.
Related Topics: Fiscal Responsibility
THE WHITE HOUSE

Office of the Press Secretary
_________________________________________________________________

For Immediate Release                                             March 4, 2009

Remarks by the President on Procurement

Room 350
Dwight D. Eisenhower Executive Office Building
10:20 A.M. EST

THE PRESIDENT: Good morning. Even if these were the best of times, budget reform would be long overdue in Washington. And we have here some folks who have been working on these issues for a long time.

But these are far from the best of times. By any measure, my administration inherited a fiscal disaster. When we walked in the door we found a budget deficit of $1.3 trillion, the largest in American history. And this fiscal burden has been compounded by the most severe economic crisis since the Great Depression. It's a crisis that requires us to take swift and aggressive action to put Americans back to work, and to make the long-delayed investments in energy, health care and education, that can build a new foundation for growth.

As we get our economy moving we must also turn the tide on an era of fiscal irresponsibility so that we can sustain our recovery, enhance accountability and avoid leaving our children a mountain of debt. And that's why even as we make the necessary investments to put our economy back on track, we're proposing significant changes that will help bring the yawning deficits we inherited under control. We are cutting what we don't need to make room for what we do.

The budget plan I outlined next week includes $2 trillion in deficit reduction. It reduces discretionary spending for non-defense programs as a share of the economy that -- by more than 10 percent over the next decade, to the lowest level in nearly half a century. I want to repeat that. I want to make sure everybody catches this, because I think sometimes the chatter on the cable stations hasn't been clear about this. My budget reduces discretionary spending for non-defense programs as a share of the economy by more than 10 percent over the next decade, and it will take it to the lowest level in nearly half a century.

In addition, today I'm announcing that part of this deficit reduction will include reforms in how government does business, which will save the American people up to $40 billion each year. It starts with reforming our broken system of government contracting. There is a fundamental public trust that we must uphold. The American people's money must be spent to advance their priorities -- not to line the pockets of contractors or to maintain projects that don't work.

Recently that public trust has not always been kept. Over the last eight years, government spending on contracts has doubled to over half a trillion dollars. Far too often, the spending is plagued by massive cost overruns, outright fraud, and the absence of oversight and accountability. In some cases, contracts are awarded without competition. In others, contractors actually oversee other contractors. We are spending money on things that we don't need, and we're paying more than we need to pay. And that's completely unacceptable.

This problem cuts across the government, but I want to focus on one particular example, and that is the situation in defense contracting. Now, I want to be clear, as Commander-in-Chief, I will do whatever it takes to defend the American people, which is why we've increased funding for the best military in the history of the world. We'll make new investments in 21st century capabilities to meet new strategic challenges. And we will always give our men and women the -- in uniform, the equipment and the support that they need to get the job done.

But I reject the false choice between securing this nation and wasting billions of taxpayer dollars. And in this time of great challenges, I recognize the real choice between investments that are designed to keep the American people safe and those that are designed to make a defense contractor rich.

Last year, the Government Accountability Office, GAO, looked into 95 major defense projects and found cost overruns that totaled $295 billion. Let me repeat: That's $295 billion in wasteful spending. And this wasteful spending has many sources. It comes from investments and unproven technologies. It comes from a lack of oversight. It comes from influence peddling and indefensible no-bid contracts that have cost American taxpayers billions of dollars.

In Iraq, too much money has been paid out for services that were never performed, buildings that were never completed, companies that skimmed off the top. At home, too many contractors have been allowed to get away with delay after delay after delay in developing unproven weapon systems.

It's time for this waste and inefficiency to end. It's time for a government that only invests in what works. And what's encouraging is, is that there is broad bipartisan consensus on behalf of reform, and we are committed to taking swift action that changes our system of contracting to save taxpayers' money.

So here are a couple of immediate steps we're going to take. First, with the presidential memorandum that I'm signing, I am instructing my administration to dramatically reform the way we do business on contracts across the entire government. So starting today, Peter Orszag, my budget director, will work with Cabinet officials and agency heads to develop tough new guidelines on contracting by the end of September. We will stop outsourcing services that should be performed by the government, and open up the contracting process to small businesses. We will end unnecessary no-bid and cost-plus contracts that run up a bill that is paid by the American people. And we will strengthen oversight to maximize transparency and accountability. Altogether, these reforms can save the American people up to $40 billion each year.

Second, we must make investments to keep our country safe while cutting back on the waste and inefficiency that isn't. And that's why I'm so pleased to support the goals of the bipartisan effort on procurement reform that has been led by our own Carl Levin and John McCain in the Senate. They have done extraordinary work trying to push this issue to the forefront. We want to see if we can partner with Senator McCain and Senator Levin to get this done as soon as possible. And thanks to Secretary Gates, some of the reforms that they've talked about are already beginning to take shape. And I've asked him to work with Senators Levin and McCain on developing this legislation as it moves forward, and Bill Lynn, who is heading up procurement issues at our White House as Deputy Secretary of Defense is going to be leading the charge on this, as well.

I can assure you that this will be a priority for my administration. It's time to end the extra costs and long delays that are all too common in our defense contracting. We need to invest in technologies that are proven and cost-effective. We need more competition for contracts and more oversight as they're carried out. If a system isn't ready to be developed, we shouldn't pour resources into it. And if a system is plagued by cost overruns, it should be reformed. No more excuses, no more delays. The days of giving defense contractors a blank check are over.

Now, none of this will be easy. We'll have to end old ways of doing business. We'll have to take on entrenched special interests. We'll have to break bad habits that have built up over many years. But we can't keep spending good money after bad. All across America, families are making hard choices, and now we're going to have to do the same. I can promise you that this is just the beginning of a new way of doing business here in Washington because the American people have every right to expect and to demand a government that is more efficient, more accountable, and more responsible in keeping the public's trust.

And I also want to acknowledge a couple of congressmen -- Congressman Towns and Congressman Welch, who have been working diligently on this issue, and Claire McCaskill in the Senate, who has been sharpening her pencils and working with IGs across departments to see if we can make some significant reforms and improvements, as well.

And again, thank you to Senators McCain and Senators Levin for their outstanding leadership on this issue. We look forward to getting it done. This is going to be just one more aspect of the kind of reform that's going to be critical in the months and years to come.

Thank you, everybody.

END 10:29 A.M. EST

Priorities -- Not Lining the Pockets of Contractors

Jesse Lee
Jesse Lee
March 04, 2009
11:32 AM EDT
Last week the President laid out the foundation of a new vision for our budget and the way government does business. It is a vision based not on ideology, but on the idea that we can and must invest boldly in our future while also making the hard choices and being vigilant to bring in a new era of fiscal responsibility.
Last week began with the fiscal responsibility summit, where the President and members of Congress came together to generate ideas to get the country on a sustainable long-term track. One of the exchanges that got the most attention was between the President and Senator John McCain, who discussed the idea of procurement overruns, in Defense Department contracts in particular.
Today Sen. McCain joined the President again to develop that idea further, along with Senators Carl Levin and Claire McCaskill and Representatives Edolphus Towns and Peter Welch. The President signed a Presidential Memorandum that will reform government contracting by strengthening oversight and management of taxpayer dollars, ending unnecessary no-bid and cost-plus contracts and maximizing the use of competitive procurement processes, and clarifying rules prescribing when outsourcing is and is not appropriate. The OMB will be tasked with giving guidance to every agency on making sure contracts serve the taxpayers, not the contractors.
In addition, the President endorsed the goals of the bipartisan effort on defense procurement reform led by Senators Carl Levin and McCain, and has asked Defense Secretary Gates to work with the Senators going ahead. In his remarks, President Obama made clear that while there are those who will try to protect contractor excesses behind cries of weakening our national defenses, there will be a bipartisan, firm stand to put those excesses to an end:
The American people's money must be spent to advance their priorities -- not to line the pockets of contractors or to maintain projects that don't work.
Recently that public trust has not always been kept.  Over the last eight years, government spending on contracts has doubled to over half a trillion dollars.  Far too often, the spending is plagued by massive cost overruns, outright fraud, and the absence of oversight and accountability.  In some cases, contracts are awarded without competition.  In others, contractors actually oversee other contractors.  We are spending money on things that we don't need, and we're paying more than we need to pay.  And that's completely unacceptable.
This problem cuts across the government, but I want to focus on one particular example, and that is the situation in defense contracting.  Now, I want to be clear, as Commander-in-Chief, I will do whatever it takes to defend the American people, which is why we've increased funding for the best military in the history of the world.  We'll make new investments in 21st century capabilities to meet new strategic challenges.  And we will always give our men and women the -- in uniform, the equipment and the support that they need to get the job done.
But I reject the false choice between securing this nation and wasting billions of taxpayer dollars.  And in this time of great challenges, I recognize the real choice between investments that are designed to keep the American people safe and those that are designed to make a defense contractor rich.
Last year, the Government Accountability Office, GAO, looked into 95 major defense projects and found cost overruns that totaled $295 billion.  Let me repeat:  That's $295 billion in wasteful spending.  And this wasteful spending has many sources.  It comes from investments and unproven technologies.  It comes from a lack of oversight.  It comes from influence peddling and indefensible no-bid contracts that have cost American taxpayers billions of dollars.
 
Related Topics: Fiscal Responsibility