Obama, Biden Warn States to Spend Stimulus Money Wisely

By Kent Klein The White House 12 March 2009

U.S. President Barack Obama and Vice President Joe Biden are warning state officials to spend their share of the federal government's economic recovery package wisely. The two men spoke to officials from most of the 50 U.S. states who gathered at the White House on Thursday.

President Obama spoke briefly to the state officials, who came to Washington to discuss ways to administer their share of the $787 billion economic stimulus.

Mr. Obama said he has "great confidence" in the officials as they take on the difficult task, but he warned that the American people are depending on them to spend the money wisely.

"If we see money being misspent, we are going to put a stop to it, and we will call it out and we will publicize it," he said.

Earlier, Vice President Joe Biden met with the state officials and issued his own warning.

"A little hint: No swimming pools in this money," he said.

Biden said future federal grants will depend on how the states spend the stimulus funds.

"If the verdict on this effort is that we have wasted the money, we built things that were unnecessary or we have done things that are legal, but make no sense, then, folks, do not look for any help from the federal government for a long while," he added.

Several of the state officials said they would do their best to ensure that the money is spent quickly and effectively.

Former New Mexico governor Toney Anaya is advising the current administration in his home state.

Treasury Secretary Timothy Geithner testifies before Senate Budget Committee on Capitol Hill, 12 Mar 2009,

"Our states are suffering, our people are suffering, people are unemployed, people are losing their homes. We have got to get the money out quickly, and we feel very comfortable that we are going to be able to do that," he said.

Meanwhile, Treasury Secretary Timothy Geithner faced tough questions from senators of both parties on Capitol Hill. Geithner defended the administration's new budget, saying its spending increases are short-term and will later have to be sharply reduced.