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Kai Ryssdal: The director of the Congressional Budget Office waved a big red flag about another economic stimulus package today. Douglas Elmendorf said out loud what seems to be crystal clear — that any more government spending is only going to expand the already wide federal budget gap. And not everyone is benefiting from last year’s stimulus bill, either. Businesses owned by minorities and women are getting just a small slice of that $787 billion.
Marketplace’s Nancy Marshall Genzer reports from Washington.
Nancy Marshall GENZER: Harry Alford has seen it before. Federal money gravitating to the same group of large, well-connected businesses. Alford heads the National Black Chamber of Commerce. He says it’s like pigs to a trough.
HARRY ALFORD: You put more feed in the trough, but you’ve got the same pigs eating. So nothing changes.
Alford says in the rush to shovel stimulus money into the economy, no cash was set aside for minority-owned businesses. Most of the federal stimulus money went to the states. They awarded contracts for projects like road work and bridge repair. Alford says the contracts were distributed through well-greased old boy networks.
ALFORD: They’re designed for a few large businesses who wine and dine the procurement personnel at the state level.
For example, just 6 percent of the Federal Highway Administration stimulus money the states awarded went to women and minority-owned businesses. These firms aren’t big enough to compete for large projects. They don’t have access to funding and equipment. And to make matters worse, when they lose a contract, it’s hard to find out who did win.
Stephen Boykewich is with the Transportation Equity Network.
STEPHEN BOYKEWICH: There’s no single outlet where members of communities that may be underserved in the allocation of stimulus contracts can go and see: OK, exactly where did this money go.
The Obama administration is trying to convince the states to award more contracts to minority businesses. And it’s starting to take action. It’s withholding money from San Francisco’s transit agency until it hires more minority contractors.
In Washington, I’m Nancy Marshall Genzer for Marketplace.