American Morning

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January 26th, 2010
07:00 AM ET

Stimulus paying for 'pork'?

Editor's Note: All week, CNN examines the stimulus and looks at one of the greatest areas of concern for Americans: the economy. Today, our Christine Romans looks at how the stimulus is feeding some American families. And tomorrow on American Morning, can a $5.5 million resort town restoration project be a good use of stimulus aid? We find out why one woman is grateful the government is spending the money.

By Laura Dolan and Christine Romans

Pork: It's what's for dinner. Remember that well-known advertisement on television? Thanks to the stimulus package, it's now true for millions of Americans.

One hundred million dollars of stimulus money is filling the plates of struggling Americans, like Robert Carlucci from rural Franklin, North Carolina.

Carlucci, a single father of two girls, lost his job as a carpenter in December 2008.

"I never went without a job," he told us.

When he didn't have enough money to feed his daughters, he sought help from a local food pantry.

"I can't believe I'm here. I mean I'm usually the one who is donating around Thanksgiving time and Christmas time and going through my cabinets and making a box for my kids to take to school and now I'm here and I'm needing that and it was surreal," said Carlucci.

He's one of 18 million Americans out of work, and many are taking the same path.

The food bank that filled his pantry is one of thousands across the country who are struggling to meet the needs of their residents. Demand is up nearly forty-percent in some places.

That's where the stimulus money comes in.

The federal government doled out big contracts to well-known companies to make food for these pantries...quickly.

DelMonte received nearly nine million dollars to make canned peaches.

Jennie-O Turkey received seven million dollars to process turkey.

Wisconsin-based Lakeside Foods got the largest share of stimulus money, more than 21 million dollars. Most of it went to make nearly ten million pounds of canned pork. A smaller amount of the money was used to make canned beef.

In all, the 100 million dollars given to these food companies created 195 new jobs.

When asked why some stimulus money didn't go to struggling food companies, a spokesman for the Department of Agriculture told CNN that vendors must meet certain requirements to do business with the USDA.

"Contracts were generally awarded to the firm that met all of the requirements and provided the least cost to the taxpayer," a spokesman wrote to us in an e-mail.

Kitty Schaller, the executive director of MANNA FoodBank in Asheville, North Carolina, says the stimulus dollars were well spent, saying, "It is not a waste of taxpayer money. The economic stimulus package has helped us to provide for the most basic needs for people who are truly in need."

That may be true, says Robert Rector, a senior fellow at the Heritage Foundation, a conservative think tank, but he has a different take on the money.

"This is clearly a type of welfare. It's a welfare expansion."

Rector is not opposed to using some stimulus money for emergency use such a helping food banks, but he says the entire $787 billion package is a foot in the door for Democrats to expand welfare.

"It does help support people who've lost their jobs. But it's not going to put more jobs back into the economy."

Not so, says Cornell University economist Steven Kyle.

"Sure this is stimulating the economy. I mean that food is produced here in the United States. That stimulates the economy." He added, "Those farmers then end up with more money and they turn around and buy more equipment, hire more laborers, buy more imports and maybe buy themselves a new caterpillar tractor. Who knows?"

As for Robert Carlucci, he took that canned pork given to him by his local food pantry, saying, "My kids have to eat. We all have to eat."

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Complete coverage: The Stimulus Project


Filed under: Economy • The Stimulus Project
soundoff (23 Responses)
  1. roger

    Dear sir could you inform me on the total costs of the ear-marks attached to the Stimilus Bill for 787,000. I think would probably be in the BILLIONS of dollars. Thanks

    January 29, 2010 at 6:01 pm |
  2. John

    Using borrowed money to fatten food companies that don't need it, since these companies are doing ok already, unless they are small companies that struggling. Besides, soup kitchen is more efficient that food bank, since delivery to people who need food and have no wheels, and aslo creating lot of needy jobs, and the pay is very cheap too.

    January 28, 2010 at 12:06 am |
  3. Faith Werner

    I would love to know why the US does not consider charging an entrace visa fee to everyone entering the US. This could be a source of revenue for the US deficit. My thought would be $400 US. If other countries can charge why is it that we do not?

    January 26, 2010 at 8:35 pm |
  4. Allen

    For those who are concerned about the money spent on the prok for 52 jobs and the profit to the company. Do you not understand that the company had to buy the pork, the cans, the boxes, the Utilities, the freight to and from the plant ( this is a secondary processing facillity that buys the prok already to can). There are many jobs along the way, too many to mention. Plus the Farmers that raised the hogs. Spend a little time learning what goes on in the world instead of critizing everything you do not understand.

    January 26, 2010 at 7:25 pm |
  5. Matthew T

    The problem with all this stimulus spending is that it did not help actual people. Sure the banks got money for their defaulted loans but the debtors didn't catch a break from the bank whom still evicted them. How do the banks get paid for defaulted loans but are still able to take action against those that defaulted? Simple. It was a flaud and fraudulent bail out from the get go.

    As far as food, it's great these farmers and Monsanto Corp got a bunch of money but once again in 2009 I only saw the price of food grow at the grocery store. So these farmer and less than trustworthy geneticists at Monsanto get helped out by our tax dollars and offer nothing back to there consumers but higher prices?

    All in all, the American people are getting raped by the same companies they helped to survive.

    Way to go American Government, could you get any more inept?

    January 26, 2010 at 3:40 pm |
  6. R C Beck

    All this did nothing for the middle class . Dems just expanding welfare benefits... Let's enact some real reform and eliminate the tax breaks for the fat cats.... Close the H-1B Visa program and make jobs available to AMERICANS.

    January 26, 2010 at 3:23 pm |
  7. Guest

    $512 thousand to create each new job. I don't think the federal government can afford to create new jobs for all of the unemployed individuals at this rate.

    January 26, 2010 at 2:28 pm |
  8. JIm

    As noble as feeding people is, this is a misuse of stimulus money. Stimulus money is suppose to stimulate the economy, create jobs and if that job does not stick beyond the stimulus funds then it failed. In this story it created 185 jobs, but if there is not a subsequent stimulus will those jobs remain or are they contingent on repeated funding?

    There are funds to feed the hungry, dont muddy the water by using stimulus money and then say it created jobs. Any reasonable person knows that we cannot dole out 800 billion dollars a year in stimulus money forever and with a great number of these so called jobs that have been created as soon as they do not get the next round of stimulus funds these jobs will disappear.

    The answer is not a simple one, but a first step is to accept that unions are primarily responsible for the massive job loss. If you doubt it, do the research yourself. Every industry that has been hit hardest, that being manufacturing, steel, local, state and federal government, school districts etc... are all unionized. The greed is appalling and must be addressed. Next, government cannot tax the worker to award public assistance, if you want a better life, get to work – you reap what you sow.

    January 26, 2010 at 1:54 pm |
  9. Felix

    This was a great story from at least two perspective or better TWO REALITIES. There are people that need and help can vastly help them through difficult times. Also, real people in a difficult situations due to no job, were helped with employment. Then the other side – stimulus – food area – USD100M – jobs 195 – USD512,820/job. This is classical – 1 for the needy, 9 for me. Unfortunately, I have seen this since I was growing up in South Texas, just give handouts, the people PERCEIVE that they are being helped, but really, its just tax dollars being "stolen" by the smart, educated crooks. Bottom line is we have all forgotten that we are Americans and now, regardless of party or "rhetoric", we just like the handouts and as long as I get mine before it runs out, I'm OK. If I get caught, who cares, I'll take my chances, maybe if I just blame it on TurboTax or claim "ignorance" that my free limo service was income, I'll get away with it. Too too sad to see us this way. I really don't know what it will take to makes us, ALL OF US, proud, honest, descent, charitable AMERICANS again.

    January 26, 2010 at 11:28 am |
  10. Bruce Cunha

    100 million to create 195 jobs. Hmmmm, that equates to 512 thousand per job. Seems to be a significant waste of money for that few jobs.

    January 26, 2010 at 10:52 am |
  11. Dan Nelson Lafayette,IN

    God will not be happy to see our government helping those who want to continue to get rich off the people and now the government is helping them when there are poor people in need that cannot work! The government should be helping those who live on a monthly income from social security alone. I am on SSD and my income is $1,417 a month which went down from about $2,000 when my son finished high school and now he's in collage. If I did not take my ex-wife in to help her because she is on SSI with about $600 a month there would be no way I could afford to live on my income alone as it is I have to go to food pantries at the end of the month. They give only one dinner meal and a lot of canned food like vegetables and soup. I am on medicaid which charges me a spend down of $727 a month for my medical needs which went down in November to $390 a month. I had never gotten a bill so now I owe nearly $4,000 and Wabash Valley hospital will not see me anymore until I pay $111 every time I see someone like my doctor, psychiatrist or nurse. I see the doctor about every 2 months, my psychiatrist once a month and the nurse twice a month for a shot of resperdal consta 50mg.There is no way for me to pay the cost of my mental health care. Is there some money in the stimulus to help people like me.

    January 26, 2010 at 10:48 am |
  12. John

    This whole series is nothing more than a political ad campaign. Lots of free spin for Obama. I have been watching these reports and am amazed at how fantastic a program the stimulus is. Why if we didn't have over 10% unemployment, sky rocketing deficits, and $14 trillion of debt, I might almost believe all the smoke you are trying to blow up our $#@. Where is the real reporting? Instead of doing some real investigating, you are simply taking what ever the government tell you and putting it on the air. They say they saved 2 million jobs, then it must be true. Don't pay any attention to the real facts.

    January 26, 2010 at 10:41 am |
  13. Denise P from NC

    A type of welfare........we have gone beyond that. That just shows how out of touch with the real world some people are. We do need to create jobs but in the interim people need to eat. They can't wait on the creation of jobs that may take a year or more before they eat.
    Also this is not a Democrate or Republican issue it is an American issue. Do we want the citizens of our country to starve in the streets similar to a third would country?? Think about what you say Mr. Rector before you say it, please.

    January 26, 2010 at 10:22 am |
  14. Nancy Spitzer

    I think you should post which Senator or Congressman proposed each one of the stimulus package expenditure for their respective states. Republicans and Democrats took money to spend, so it doesn't all fall on the White House for " spending " to help the economy grow.

    January 26, 2010 at 10:21 am |
  15. Hermotimus

    If the Federal Government really wanted to help the food banks in this country, they should divert some of the shipments of price support products destined for poor countries into our own food banks. The current price support foods (to my knowledge) includes cheese, butter, peanut butter, honey, as wel as canned beef and canned pork. The list may be longer at this time, The last time the USDA distributed the price support foods in the USA was in the early 1990s.

    January 26, 2010 at 10:19 am |
  16. John

    100 million hire only 195 people, the money should have put in productive use by hiring more people doing temp jobs for the government on state's protject. Is better to let them earn a wages then to give free food. How many days of canned pork can you give away. It is a waste of money by giving to food companies that suffered the least in this economy. Need to have brains in the government to create jobs not giving away freebies and then what?

    January 26, 2010 at 10:15 am |
  17. Dale Phipps

    I get so tired of people who are supposed to be experts on the woes of our economy dancing around the real problem concerning American jobs. Two words explain our nations problem, Free Trade, it has allowed corporations to mass move American good pay and benefit jobs out of our country. In the beganing it was ment to enter foriegn markets by placing factories there. It did not take American companies long to see it would be more profitable to close their American plants which provided Americans with good jobs and health care, and manufacture their product outside our country at slave labor cost, and very little benefits if any then ship it back home. Making huge profits and leaving the American middle class with out jobs that provided good wages and health care. Thus creating high unemployement and to no surprise many Americans with out health care. Washington continues to support these practices. Driving the American Job Market to accept much lower wages and reduced benefits. We are headed to a third world economy if we do not elect politicians who want to make America totaly independant and able to produce all our needs here at home. free trade has made it almost impossible for our steel industry, textile industry, electronics. Our country could not survive if foriegn nations became hostile to our government and we would be at their mercy to recieve products we no longer make here. Until America wakes up and understands when they here a politician support free trade, he is actually supporting a one world economy and eventually government. This wordl will not hold good jobs for middle class Americans, matter of fact it will not provide for a middleclass America. our economy will resemble, a much lower stasndard than Americans are used to for all working America while the rich hoard a much bigger portion of America's wealth. If you do not see this coming you are blind, we are headed for this at break neck speed. We should enjoy our homes while most of us who still have them can, then we better get reqady to accept the fate many hard working Americans have already had to accept.

    January 26, 2010 at 9:15 am |
  18. Rebecca Garrett

    The stimulus money should have gone to the people, individual families. If the government had given $1 million to each individual family those people would have paid off all their credit cards, paid off their mortgages, shopped for whatever they wanted or needed and had money left over for their futures. They would have bought new vehicles, new houses, merchandise, started their own businesses, and even donated money to the less fortunate which the less fortunate would have money to spend of their own. It would have created many new jobs, jump-started the economy once again, and lessened the poverty rate. The banks would have been happy, the consumers would have been happy, the poor would have been depleted and businesses would be booming right now. It would have been a simple, smart solution to all the financial problems in the U.S.

    Becky Garrett
    Atlanta, Georgia

    January 26, 2010 at 9:03 am |
  19. Kay Turpin

    Thanks for using Mr.Carlucci in Franklin, NC and the Manna Food Bank in Asheville for highlighting the use of stimulus money for food for the needy. As a longtime volunteer/board member of The Community Table in Sylva, NC, I have no problem with stimulus money being used to provide food to food banks and soup kitchens. Manna Food Bank is one of our best sources for inexpensive food. While some may say this type of usage does not create jobs, they are not thinking about the people who have lost their jobs and can't feed themselves or their families. The Table has seen a busy night go from 50 patrons to 100-150 patrons over the past year, as well as people requesting groceries to take home (which is a service that previously was not provided by our organization). Not only have we found ourselves with a vast increase in the number of needy people, but we don't have adequate facilities for such numbers. The bright spot that keeps us going is the support of our local community, churches, schools/colleges, and businesses – these people are awesome. (Our executive director is Amy Grimes, 828-586-6782)

    January 26, 2010 at 8:42 am |
  20. Chuck

    $100,000,000 creates 195 new jobs. That comes out to $512,820.51 per job! How much are these 195 people making? Wouldn't it be better to just give each of them $512,820.51 and letting them spend the money to "stimulate the economy?

    January 26, 2010 at 8:41 am |
  21. Doug Hoefer

    Let me get this straight. Spend $100,000,000.00 to create 195 jobs in the MN meat packing plant.

    That's $512,820 each.

    Why not give them each $200,000 and save $62,000,000?

    January 26, 2010 at 8:39 am |
  22. Eric Pieters

    Wow, Lakeside Foods – $21Million for 52 new jobs.

    How much was profit for their bottom line?

    January 26, 2010 at 8:33 am |
  23. patricia

    I think what you are doing is disgraceful– trying to make the American public swoon over the amount of money spent on the recovery– today it was the food companies. Why don't you start out by saying what the % of the TOTAL stimulus is being spent on the food contracts and then focus on that small tiny pork producer– instead of the 'measly 52 jobs' created– what if that company had gone under in this economy? How many jobs may have been lost? Kids without meals? Farmers selling to high rise condo builders? Keeping jobs in AMERICA should be the focus. FOCUS ON THE POSITIVE for once. I am so tired of your 'extreme' reports. You seem to find the dark side of everything to report on– you would find fault with winning the LOTTO. Any monies into this economy helps on the road to recovery.

    January 26, 2010 at 7:39 am |