Obama: States get first bite of stimulus

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WASHINGTON (CNN) -- President Barack Obama announced Monday that cash-strapped state governments will see the first influx of federal stimulus-related assistance later this week.

The money, Obama noted at a White House meeting with governors, will be distributed starting Wednesday in the form of more than $15 billion in new Medicaid assistance.

"That means that by the time most of you get home money will be waiting to help 20 million vulnerable Americans in your states keep their health care coverage," Obama told the governors.

But the money, Obama warned, is "not a blank check" to state governments. The money is "intended to go directly toward helping struggling Americans keep their health care coverage ... We're going to work with you closely to make sure that this money is spent the way it's supposed to."

The president said he would not hesitate "to call out" state governments that spend the money in a wasteful or inappropriate manner.

In that vein, Obama announced the appointment of former Interior Department Inspector General Earl Devaney to head a new Recovery Act Transparency and Accountability Board to ensure the $787 billion stimulus package is spent in an open, efficient manner.

"Earl has doggedly pursued waste, fraud and mismanagement (and) has the reputation of being one of the best inspector generals that we have in this town," Obama said. "I can't think of any more tenacious and efficient guardian of the hard-earned tax dollars the American people have entrusted us to wisely invest."

Vice President Biden, he added, will oversee the administration's stimulus spending implementation efforts "to make sure our efforts are not just swift, but also efficient and effective."

The "unprecedented spending" of the stimulus package, Obama added, comes with an "unprecedented obligation" to avoid waste.

Obama also had harsh words for conservative critics of the stimulus plan who have argued that the it contains needless pork barrel spending.

"When I hear people who say, well, there's a lot of waste in this program, from my perspective at least, keeping teachers in the classroom is not wasteful," he argued.

"From my perspective, tax cuts to 95% of working families is not wasteful. From my perspective, providing all of you additional resources to rebuild roads and bridges and levees and dams ... that will enhance the quality of life of your state, but also make it more economically competitive. That's not wasteful."

"If we agree on 90% of the stuff and we're spending all our time on television arguing about 1%, 2%, 3% of the spending in this thing and somehow it's been characterized in broad brush as wasteful spending, that starts sounding more like politics, and that's what right now we don't have time to do."