Department of Agriculture efforts intended to create jobs in rural areas, including the Rural Business and Industry Guaranteed Loan Program, haven’t quite worked as planned:

Funds have gone to firms that have hired foreign workers instead of Americans. Millions more have gone to failing and bankrupt businesses. Most of the jobs are not new. Many are low-tech and low-wage.

In addition to the loan program, the USDA has handed out almost half a billion dollars in rural development grants to businesses and nonprofits since 2001.

Loan guarantees or grants have gone to a car wash in Milford, Del.; a country club in Great Falls, Mont.; a movie theater in Smithfield, N.C.; a water park in Myrtle Beach, S.C.; an alligator hunter in Dade City, Fla.; snowmobile clubs in Maine; and dozens of gas stations and convenience stores in Maryland, Ohio, Pennsylvania and Arkansas.

The article, written by Gilbert M. Gaul in today’s Washington Post, provides the kind of in depth examination of government spending that should be routine but sadly, rarely happens. Perhaps his most disturbing finding about the Rural Business and Industry Guaranteed Loan Program is this: “More than three decades after the loan program was created, USDA officials still don’t know whether it works.” Office of Management and Budget assessed the program in 2003, at which time USDA disclosed that, “No independent performance evaluations have been conducted to assess the program’s impact on improving economic opportunities in rural communities.” And, Gaul reports, members of Congress have other interests: making sure the money spigot stays open.

Congressional committees charged with overseeing USDA business programs rarely question the agency’s claims or probe deeply into the programs. Instead, some lawmakers have aggressively lobbied the USDA to approve costly projects in their districts.

In 1999, members of Washington state’s congressional delegation urged the USDA to guarantee a $20 million loan to a troubled sugar beet refinery near Moses Lake. The agency agreed, even though the borrower was already in default on existing loans. Within months the plant failed and defaulted on its newest loan, sticking taxpayers with a $12.1 million loss.

The article is part of the excellent Harvesting Cash series that’s dissecting Department of Agriculture programs. I wish the Post, or other papers, would take the same care to examine Commerce, HUD, Labor and HHS programs as well. And for those interested, beneficiaries of the Rural Business and Industry Guaranteed Loan Program from 2000 to 2006 can be found on FedSpending.org, here.

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Earlier this month, Texas released a state spending database. The database, “Where the Money Goes,” allows citizens to search state spending by agency and recipient. The Houston Chronicle, makes the point that the bill that created this database was “modeled after federal legislation passed last year.” The Coburn-Obama bill’s teeth went all the way down to state level.

Texas is now one of six states this year that have created a database or adopted laws that require a spending database to be created. The Kansas state legislature also mandated such a database, modeled after the federal database, which Stateline says was inspired by FedSpending.org, a project of Sunlight grantee OMB Watch. Minnesota, Oklahoma, Hawaii, and Missouri also have databases in the works to launch in 2008.

The movement to bring this kind of transparency to the states is being led by a coalition called “Show Me the Spending." Their site provides information on the coalition as well as a very convenient map that allows you to keep track of what is going on in all 50 states.

According to the Show Me the Spending Web site, there are partial databases in seventeen other states and legislation being offered in Nebraska, South Carolina, and Georgia. This is great news for transparency. This is a great example on how the federal government can lead the states in creating an open and accountable environment. It will be interesting to see how the states create their databases, and if they will take the lead on more transparency measures in the future.

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Sen. [sw: Tom Coburn] (R-Okla.) is holding up the FY 07 Legislative Branch appropriations bill over an 8 percent increase in Senate spending. According to CongressDailyAM, "Coburn aides and Senate leaders said they hoped to quietly resolve the matter, perhaps by allowing Coburn to offer an amendment to slash the bill’s $840 million for Senate offices and expenses — a $63 million increase over the current year." Coburn stated, "In a time of war, rising gas prices and record deficits, increasing our own budget by an exorbitant amount sends the wrong message to the public".

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