Obama warns mayors not to waste stimulus money

"The American people are watching," Obama told a gathering of mayors at the White House. "They need this plan to work. They expect to see the money that they've earned - they've worked so hard to earn - spent in its intended purposes without waste, without inefficiency, without fraud."

In the days since the White House and Congress came to terms on the $787 billion economic package, the political focus has shifted to how it will work. Obama has staked his reputation not just on the promise of 3.5 million jobs saved or created, but also on a pledge to let the public see where the money goes.

His budget chief this week released a 25,000-word document that details exactly how Cabinet and executive agencies, states and local organizations must report spending. It is a system meant to streamline reports so they can be displayed on the administration's new Web site, Recovery.gov.

Durham Mayor Bill Bell, who said his city has $95 million in projects awaiting stimulus funds, Charlotte Mayor Pat McCrory and Asheville Mayor Terry Bellamy were among the 80 or so mayors who attended the event.

"We have roads that are being looked at," Bell said. "I know the Department of Transportation has identified a small number of roads that can be built in Durham County that those funds can be available for. We have some capital projects that we can apply very easily to those programs that are 'shovel-ready.'"

The programs could translate into 600-plus jobs, Bell said.

The federal money is vital, he said, because Durham faces a $20 million to $40 million budget deficit.

Using his presidential pulpit, Obama demanded accountability, from his friends in local government as well as his own agencies. He said the new legislation gives him tools to "watch the taxpayers' money with more rigor and transparency than ever," and that he will use them.

"If a federal agency proposes a project that will waste that money, I will not hesitate to call them out on it, and put a stop to it," he said. "I want everyone here to be on notice that if a local government does the same, I will call them out on it, and use the full power of my office and our administration to stop it."

Miami Mayor Manny Diaz, who leads the U.S. Conference of Mayors, said he welcomed Obama's warning.

"Absolutely. We get called out every day at the local level," Diaz said, drawing laughs from other mayors in a gathering with reporters on the White House driveway. "We have plenty of constituents who will be doing that before the president does."

Mayors of both parties said they appreciated the invitation to meet with Obama, Vice President Joe Biden and a handful of Cabinet secretaries. They cautioned, though, that the stimulus plan will only work if leaders at the state level direct the money to their cities in a clear, timely way.

"We've got to make sure the governors transfer much of this money to metro areas," McCrory said. "We've expressed that very strongly to the Cabinet members."

McCrory also said "shovel-ready" needs to be more clearly defined to ensure the stimulus money is spent on worthwhile projects.

"Metropolitan areas are areas in which we have to do more environmental study, planning, engineering and architectural work than some of the more rural areas of the states," he said. "I personally asked for more flexibility in the definition of 'shovel-ready' so more money goes to these metropolitan areas (for) very important long-term infrastructure."

The economic plan will inject a sudden boost of cash into transportation, education, energy and health care. Beyond new spending, it aims to aid people through a package of tax cuts, extended unemployment benefits and short-term health insurance help. The cost will be added to a growing budget deficit.

Obama said government leaders have asked for the "unprecedented trust of the American people."

"With that comes unprecedented obligations to spend that money wisely, free from politics and free from personal agendas," he said.

The president did not specify how, exactly, he would call out one of his own agencies or a local government about wasteful projects.