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Stimulus Fail: Green Your Home for $57,000

Posted By Nicolas Loris On February 18, 2010 @ 5:44 pm In Energy | Comments Disabled

A $5 billion stimulus program to weatherize homes is off to a shaky start. ABC News reports [1]that at the end of 2009, only 9,100 have been weatherized to save energy through the American Reinvestment and Recovery Act.  $522 million of the $5 billion has been spent thus far, which equates to over $57,000 per home. That’s quite a slow for a stimulus bill that was supposed to be timely and effective; the goal of the plan was to  cover 593,000 homes from the passage of the stimulus bill through 2012. That means they’re 1.5% of the way there towards meeting the goal. Only 98.5% to go!

The Department of Energy contests that 22,000 homes have been weatherized, but that still only equates to 3.7% of the targeted goal. What’s the problem? Everything, to start, but in this instance it is the government’s red tape [1]:

[T]he Recovery Act included so-called Davis-Bacon requirements for all weatherization grants. Davis-Bacon is a Depression-era law meant to ensure equitable pay for workers on federally funded projects. Under that law, the grants may only go to projects that pay a “prevailing wage” on par with private-sector employers.

The Department of Labor spent most of the past year trying to determine the prevailing wage for weatherization work, a determination that had to be made for each of the more than 3,000 counties in the United States, according to the GAO report.

Secondly, many homes have to go through a National Historic Preservation Trust review before work can begin. The report quoted Michigan state officials as saying that 90 percent of the homes to be weatherized must go through that review process, but the state only has two employees in its historic preservation office.”

Texas Watchdog detailed their state’s problem with the weatherization program [2]two weeks ago noting that $3.7 million in taxpayer money had been spent to weatherize 47 homes.  That’s $78,000 per home,  which beats out the per home nationwide average by $21,000.

The other lesson from this is that one way to actually create jobs and make projects driven by the private sector more efficient is to streamline  regulatory barriers that unnecessarily prohibit the shovel from hitting the ground.

The stimulus was supposed [3]to save or create jobs. Was it also supposed to be timely or effective? Which one does this fall under?


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URL to article: http://blog.heritage.org/2010/02/18/stimulus-fail-green-your-home-for-57000/

URLs in this post:

[1] ABC News reports : http://abcnews.go.com/WN/Politics/stimulus-weatherization-jobs-president-obama-congress-recovery-act/story?id=9780935

[2] detailed their state’s problem with the weatherization program : http://www.texaswatchdog.org/2010/01/--hed-47-homes-retrofitted-37-mill-spent-under-texas/1264958630.story

[3] stimulus was supposed : http://www.heritage.org/research/energyandenvironment/wm2245.cfm

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