Where Are the ‘Recovery Summer’ Stimulus Projects? (The New Republic)

Where Are the ‘Recovery Summer’ Stimulus Projects? (The New Republic)

Washington Post reported on a recent White House analysis of the American Recovery and Reinvestment Act. That assessment found “strikingly few claims of fraud or abuse,” according to the article. Well, good!

We’ve complained before that ARRA’s welcome emphasis on transparency tilts too much toward curbing this kind of waste and too little on establishing a clear, sensible focus on measuring outcomes, irrespective of the multiplier effects of speedy spending Jon Cohn points out. (Though, ironically, the report does not yet appear to be available on Recovery.gov.) But thanks to the ongoing oversight by the House’s Transportation and Infrastructure Committee, we are provided with clear and rich information on those projects in the committee’s jurisdiction along with a locational identifier for each. This data is reported by the states individually but kudos to the staff and committee leadership for pulling this together and making it available.

So what does it tell us? Our analysis shows that, just looking at the transportation agencies, 43 percent of all the projects and 67 percent of the spending occurs within the 100 largest metro areas, the geographic building blocks of America’s economy and society. While this may seem low given that these places are home to two-thirds of our population and generate 75 percent of our gross domestic product, it’s actually an increase from earlier this year when those figures where 41 and 59 percent, respectively.

A deeper look into the individual modal administrations (e.g., highways, transit, rail) tell a very different story, though not an unexpected one. The spending on transit projects, for example, is highly concentrated (86 percent) in the major metros while highway dollars (51 percent) are less so. Again, not too surprising given what we know about where transit is located, and how we’ve allocated roadway dollars in the past. But aviation is interesting: more than half the funding goes outside of the major metros despite the fact that 99 percent of all U.S. air passengers arrive or depart from one of the 100 largest metropolitan areas.

Also notable are the transportation recovery funds allocated through competitive processes, rather than formula block grants. For example, the so-called TIGER funds we’ve written about before closely track the economic concentration of the 100 largest metropolitan areas. The railroad money (aka the High Speed Rail grants) also veers heavily towards the largest metros though that may necessarily change somewhat as work connecting these places gets started (e.g., new signals, track sidings).

At least for the transportation projects, these data are starting to show the spatial difference between legacy programs and delivery mechanisms and the new fangled emphasis on empirics when it comes to choosing projects. So this emphasis on metropolitan areas is not a parochial grab for money. It’s about strategically investing where the economy is so American emerges from the rubble of the recession stronger than ever. That’s one of ARRA’s key lessons.

Robert Puentes
Senior Fellow, Brookings Metropolitan Policy Program
view bio

NCDOT: Stimulus-funded construction payroll jumps 131% (Triangle Business Journal)

NCDOT: Stimulus-funded construction payroll jumps 131% (Triangle Business Journal)

Transportation payroll funded by federal stimulus funds more than doubled in March, according to data compiled by the North Carolina Department of Transportation.

A total of $3.7 million in federal stimulus money was paid out to 4,740 workers in March. Those workers clocked 215,914 hours.

The payroll jumped 131 percent compared to February, when 2,887 workers earned $1.6 million for 119,843 hours of work.

The increases in March stopped a fourth-month decline in transportation stimulus payroll. NCDOT’s construction work typically slows down in the winter due to weather conditions before picking back up again in the spring.

Since stimulus jobs started in April of last year, $28.9 million in transportation construction payroll has been doled out to workers in North Carolina.

Friday, May 7, 2010
by Chris Baysden

Transportation Secretary LaHood Tells Mayors More Federal Support Coming (US Conf of Mayors)

Transportation Secretary LaHood Tells Mayors More Federal Support Coming (US Conf of Mayors)

U.S. Department of Transportation Secretary Ray LaHood told the mayors during the January 21 Plenary of The U.S. Conference of Mayors Winter Meeting that last year, he traveled to 66 cities and saw “some amazing projects that are transforming sprawling, struggling 20th century cities into clean, green, accessible hubs of activity where people choose to live and work and start a family.” He said, “We’re taking our clues from you and we want to be absolutely sure that we set the right policies and guidelines for investing federal funds in projects that will enable you to keep doing what you’re doing and do it better, with more federal support.”

“You also want more control over how federal transportation dollars should be spent in your cities,” said LaHood. “Our discretionary TIGER grant program, funded through the Recovery Act, marks the first time that cities can apply directly to (US)DOT for federal highway funds for innovative transportation projects to improve highways, railways, transit, and more.” The USDOT received nearly 1,400 applications from all 50 states vying for a share of $1.5 billion in Recovery funds for transportation projects that show significant economic promise and promote livability and sustainability.

“This is a whole new way of doing business for us — and it’s the model we’ll refine going forward,” said LaHood. “We’re excited about the impact these projects will have on cities that have been clamoring for resources to address a wide variety of residential and commercial transportation needs.”

Discussing the new livability factors for major transit capital projects, LaHood said, “This will open the door to federal assistance for the kinds of transit projects so many of you want downtown — like streetcars and trolleys.” The change will apply to how the Federal Transit Administration (FTA) evaluates major transit projects going forward. In making funding decisions, the FTA will now evaluate the environmental, community and economic development benefits provided by transit projects, as well as the congestion relief benefits from such projects. As part of this initiative, the FTA will immediately rescind budget restrictions issued by the Bush Administration in March of 2005 that focused primarily on how much a project shortened commute times in comparison to its cost.

Speaking to Livable Communities, which is the integration of transportation, housing, land use, economic development, and the environment, LaHood said, “Together, we’re coordinating [with HUD and EPA] investments to give you funds for more projects to make your cities livable and sustainable.” And, he added, “Our Departments have field offices in Chicago, Seattle, and elsewhere that are already working together to identify opportunities and remove obstacles to sustainable development.”

The Secretary also spoke to the $8 billion for high speed rail planning and development funded in the Recovery Act stating, “The high’speed rail program, which reflects President Obama’s vision for the future of transportation in America, is going to help us revitalize domestic manufacturing in this country.” On January 27, The Obama Administration announced that Wisconsin would receive a grant for $810 million for the Milwaukee-to-Madison portion of the corridor, and an additional $12 million will provide for improvements on the line near the Milwaukee airport. Minnesota will be awarded $600,000 to extend the line to the Twin Cities. California will receive $2.25 billion, Florida will be awarded $1.25 billion for the Tampa to Orlando segment, and Illinois will receive $1.1 billion for the Chicago Hub Network from Chicago to St. Louis. Additionally, Washington will receive $590 million, North Carolina was awarded $520 million, and Ohio will receive $400 million for the Cleveland to Cincinnati line.

North Carolina was awarded $520 million, and Ohio will receive $400 million for the Cleveland to Cincinnati line.

Regarding the authorization of the nation’s next surface transportation law, LaHood said, “We’re working with Congress to make sure there’s a lot more flexibility and opportunity for cities, both large and small, to bring federal transportation funds home.”

In introducing LaHood, Conference of Mayors President Burnsville (MN) Mayor Elizabeth B. Kautz said, “If we do this next bill correctly we can make sure that our citizens and businesses have the transportation systems they need to live and compete in the global economy.”

“Clearly, there are challenges before us in accomplishing this vision,” said Kautz. “But please know that mayors stand with you, and will be a formidable partner.”
By Ron Thaniel
February 1, 2010

$520M puts fast trains on fast track (News and Observer)

$520M puts fast trains on fast track (News and Observer)

North Carolina is expected to receive $520 million today as part of $8 billion in federal economic stimulus funds President Barack Obama will distribute in 31 states to start building a national high-speed rail network.

The president touted high-speed rail in Wednesday night’s State of the Union Address, and he and other administration officials are fanning out across the nation today to announce the funding. Lisa Jackson, administrator of the U.S. Environmental Protection Agency, will come to Durham’s new Amtrak station to discuss North Carolina’s allotment in an event scheduled for 1:15 p.m.

U.S. Rep. David Price, a Chapel Hill Democrat, disclosed North Carolina’s funding share. “From Raleigh to Charlotte in the near term, and Raleigh to Washington in the long term, we’re in that charmed circle of routes where train travel can really make sense,” he said.

The state will use its share to add and upgrade tracks, trains and stations and to provide faster and more frequent rail service between Charlotte and Raleigh. The effort is part of a planned Southeast High-Speed Rail Corridor that will continue north from Raleigh to Richmond and Washington, D.C.

North Carolina and Virginia have planned the corridor since the early 1990s. North Carolina has spent about $5 million a year, working with railroads to straighten curves, add double tracks and increase train speeds – cutting an hour from travel between Raleigh and Charlotte.

Now, the state Department of Transportation will push a plan to cut that time by another hour. Train speeds are expected to reach 90 mph between Charlotte and Raleigh – and, eventually, 110 mph between Raleigh and Richmond.

Obama will be in Tampa, Fla, this morning to announce his plans for the $8 billion funds to support projects in 13 rail corridors across the nation. Florida, California and Midwestern and Northeastern states are expected to be among the big winners.

A down payment

North Carolina leaders hope the $520 million will be a down payment on their plan to build out the Southeast corridor. In all, the state last year asked the Obama administration for $5.3 billion – with most of that money, about $3.7 billion, earmarked for a new rail shortcut between Raleigh and Richmond. Virginia seeks about $1.7 billion for improvements between Richmond and Washington.

Much of the money will be spent to buy right of way, replace curved tracks with straighter tracks, build passing sidings or double tracks where there are single tracks now, improve stations or build new ones, and build bridges over roads to eliminate at-grade crossings. North Carolina’s proposal includes new rail stops in Lexington and Hillsborough, a new station in Charlotte and planning for a new Raleigh station.

In addition to $8 billion included in last year’s American Recovery and Reinvestment Act appropriation, Congress put another $2.5 billion for high-speed and intercity passenger rail projects in this year’s federal budget. North Carolina is expected to seek a share of that money in the next few months and to pursue more federal rail funding in coming years.

Eugene Conti, the state transportation secretary, declined to confirm North Carolina’s share of the money but promised to make good use of it. “We think whatever the number is is going to give us a good start on a program that’s going to pay many dividends over the years for our state and our country,” he said.

Price said North Carolina will have to make a good case for more rail funding.

“The best proof of the worth of that will be to make this Raleigh-to-Charlotte train a crackerjack run. Make these trains succeed,” Price said.

bruce.siceloff@newsobserver.com or 919-829-4527
Published Thu, Jan 28, 2010 02:00 AM
Modified Thu, Jan 28, 2010 05:32 AM

Money for Roads not Reducing Unemployment (Associated Press)

Money for Roads not Reducing Unemployment (Associated Press)

AP Report: No Tangible Impact on Jobless from Government Stimulus Funds for Rebuilding Roads and Bridges

Ten months into President Barack Obama’s first economic stimulus plan, a surge in spending on roads and bridges has had no effect on local unemployment and only barely helped the beleaguered construction industry, an Associated Press analysis has found.

Spend a lot or spend nothing at all, it didn’t matter, the AP analysis showed: Local unemployment rates rose and fell regardless of how much stimulus money Washington poured out for transportation, raising questions about Mr. Obama’s argument that more road money would address an “urgent need to accelerate job growth.”

Mr. Obama wants a second stimulus bill from Congress that relies in part on more road and bridge spending, projects the president said are “at the heart of our effort to accelerate job growth.”

Construction spending would be a key part of the Jobs for Main Street Act, a $75 billion second stimulus to revive the nation’s lethargic unemployment rate and improve the dismal job market for construction workers.

AP’s analysis, which was reviewed by independent economists at five universities, showed that strategy hasn’t affected unemployment rates so far. And there’s concern it won’t work the second time. For its analysis, the AP examined the effects of road and bridge spending in communities on local unemployment; it did not try to measure results of the broader aid that also was in the first stimulus like tax cuts, unemployment benefits or money for states.

“My bottom line is, I’d be skeptical about putting too much more money into a second stimulus until we’ve seen broader effects from the first stimulus,” said Aaron Jackson, a Bentley University economist who reviewed AP’s analysis.

Even within the construction industry, which stood to benefit most from transportation money, the AP’s analysis found there was nearly no connection between stimulus money and the number of construction workers hired or fired since Congress passed the recovery program.

“As a policy tool for creating jobs, this doesn’t seem to have much bite,” said Emory University economist Thomas Smith, who supported the stimulus and reviewed AP’s analysis. “In terms of creating jobs, it doesn’t seem like it’s created very many. It may well be employing lots of people but those two things are very different.”

Transportation spending is too small of a pebble to quickly create waves in America’s $14 trillion economy. And starting a road project, even one considered “shovel ready,” can take many months, meaning any modest effects of a second burst of transportation spending are unlikely to be felt for some time.

“It would be unlikely that even $20 billion spent all at once would be enough to move the needle of the huge decline we’ve seen, even in construction, much less the economy. The job destruction is way too big,” said Kenneth D. Simonson, chief economist for the Associated General Contractors of America.

For its analysis, the AP reviewed Transportation Department data on more than $21 billion in stimulus projects in every state and Washington, D.C., and the Labor Department’s monthly unemployment data. Working with economists and statisticians, the AP performed statistical tests to gauge the effect of transportation spending on employment activity.

There was no difference in unemployment trends between the group of counties that received the most stimulus money and the group that received none, the analysis found.

Despite the disconnect, Congress is moving quickly to give Mr. Obama the road money he requested. The Senate will soon consider a proposal that would direct nearly $28 billion more on roads and bridges, programs that are popular with politicians, lobbyists and voters. The overall price tag on the bill, which also would pay for water projects, school repairs and jobs for teachers, firefighters and police officers, would be $75 billion.

“We have a ton of need for repairing our national infrastructure and a ton of unemployed workers to do it. Marrying those two concepts strikes me as good stimulus and good policy,” White House economic adviser Jared Bernstein said. “When you invest in this kind of infrastructure, you’re creating good jobs for people who need them.”

Highway projects have been the public face of the president’s recovery efforts, providing the backdrop for news conferences with workers who owe their paychecks to the stimulus. But those anecdotes have not added up to a national trend and have not markedly improved the country’s broad employment picture.

The stimulus has produced jobs. A growing body of economic evidence suggests that government programs, including Mr. Obama’s $700 billion bank bailout program and his $787 billion stimulus, have helped ease the recession. A Rutgers University study on Friday, for instance, found that all stimulus efforts have slowed the rise in unemployment in many states.

But the 400-page stimulus law contains so many provisions – tax cuts, unemployment benefits, food stamps, state aid, military spending – economists agree that it’s nearly impossible to determine what worked best and replicate it. It’s also impossible to quantify exactly what effect the stimulus has had on job creation, although Mr. Obama points to estimates that credit the recovery program for creating or saving 1.6 million jobs.
WASHINGTON, Jan. 11, 2010

34 Contracts Totaling More Than $107 Million Awarded for Highway Projects Across North Carolina (Press Release)

34 Contracts Totaling More Than $107 Million Awarded for Highway Projects Across North Carolina (Press Release)

Includes 13 funded through American Recovery and Reinvestment Act

RALEIGH — Gov. Bev Perdue announced today that 34 contracts totaling more than $107 million have been awarded for highway and bridge projects across North Carolina, including 13 projects funded through the American Recovery and Reinvestment Act. The contracts were awarded by the N.C. Department of Transportation to the lowest bidders, as required by state law. A list of projects is attached.

“In the new year, recovery dollars will continue to help us improve our transportation infrastructure while providing jobs to North Carolinians,” Perdue said.

According to the Federal Highway Administration, every $1 million spent on transportation creates 30 jobs, and according to the construction industry, every dollar invested in transportation generates $6 in economic impact.

The 13 recovery projects are located in Alamance, Bertie, Buncombe, Franklin, Granville, Guilford, Lee, Nash, Person, Rockingham, Stanly, Wake and Wilson counties. The 21 other projects are located in Buncombe, Burke, Caswell, Catawba, Cleveland, Cherokee, Durham, Forsyth, Franklin, Gaston, Granville, Harnett, Lincoln, Madison, McDowell, Mitchell, Person, Rockingham, Rutherford, Sampson, Wake and Yancey counties. See the attached list for start dates.

The bids received on all 34 projects advertised came in 15 percent, or about $19 million, below NCDOT estimates.

Four additional projects were either rejected or delayed.

The bids on a recovery project to preserve several bridges located on Interstate 40 and I-240 in Asheville exceeded the NCDOT engineer’s estimate by more than 10 percent and were rejected. The project will be bundled with a future project in an effort to reduce costs and will be rebid at a later date.

A project to build bridges over Austin Creek and Smith’s Creek in Wake County was withdrawn to allow NCDOT engineers to amend the proposal. The project will be rebid in January.

The award of two projects to replace fender systems on two bridges over the Atlantic Intracoastal Waterway in Brunswick and Carteret counties has been delayed due to concerns regarding materials specified for use on the projects. It is anticipated that a decision regarding the awarding of these projects will be made next week.

For more information about funding for infrastructure improvements in North Carolina, as well as other NCDOT projects and activities, visit www.ncdot.gov.

Click here for the December Project List.


Tax money spent to advertise stimulus projects (WRAL.com)

Tax money spent to advertise stimulus projects (WRAL.com)

Fayetteville, N.C. — The state Department of Transportation has spent $135,000 in taxpayer funds to install signs touting road projects paid for with more than $800 million in federal stimulus money.

Signs like one on the Fayetteville loop highway construction project near Fort Bragg aren’t directional and don’t point drivers to any construction detours. They simply note that the particular project was “funded by the American Recovery and Reinvestment Act.”

“If we couldn’t laugh, we would be crying,” said Ronnie Tart, who owns a used car dealership down the road from the Fayetteville highway project.

Tart said he has waited for years for the project to start, but he said he can’t believe tax dollars are being used to remind him how his tax dollars are being used.

“That’s almost a slap in the face to say, ‘Here’s only a little bit of how badly we’ve spent your money, but we want to remind you,'” he said.

The federal money the DOT is using to erect 54 signs across the state – each costs about $2,500 – doesn’t come from the economic stimulus package. It’s discretionary money the state could have used on road construction or maintenance.

“It irritates me,” said Wes Lewis, who drives by one of the signs almost daily. “I think the money could be better spent somewhere else. They could use it on the road. If they want to let everybody know, they could put it in the paper what they’re using the money for instead of spending so much on signs.”

DOT Traffic Engineer Kevin Lacy argued that the stimulus projects are important investments, and educating people on where their money is going is a valid expense.

“I do understand their position. I don’t necessarily agree with it, but I do understand it,” Lacy said of the sign critics.

The U.S. Department of Transportation encourages all states to install the signs, he said, adding that North Carolina will recycle its 54 signs once the stimulus projects they advertise are completed.

Lacy also pointed out that the company that made the signs benefited, which is what the stimulus projects are designed to do.

“We’re in unusual times, and (we’re) letting people know there is an effort going on that helps people get back to work,” he said. “It was important.”

Reporter: Cullen Browder
Photographer: Edward Wilson
Web Editor: Matthew Burns
Posted: Dec. 22 6:18 p.m.
Updated: Dec. 22 6:32 p.m.

LaHood: Ban lobbyists, earmarks in second stimulus (Associated Press)

LaHood: Ban lobbyists, earmarks in second stimulus (Associated Press)

WASHINGTON — The latest government effort to create jobs should have the same tough restrictions on lobbyists and lawmakers’ pet projects as the $787 billion stimulus plan did, Transportation Secretary Ray LaHood said Thursday.

LaHood is the first official to say whether the administration wants to replicate the requirements of last February’s economic aid package. That plan mandated that every dollar be reported online, that Congress could not steer money toward earmarks and recipients had to disclose how many jobs were being created.

“We’ve set a pretty high bar and I believe that hopefully Congress will look at that as an opportunity to say, ‘Hey this has worked pretty well, and we should replicate this on the way forward for another bill,'” LaHood said after a speech Thursday.

The White House has sidestepped questions about whether it wants such requirements on the next round of stimulus spending. In broad strokes, President Barack Obama has said he wants to spend billions more on highway and bridge construction, small business tax cuts and repairs to make homes more energy-efficient.

With huge amounts of data available online, the stimulus provided the administration its biggest transparency success story. But it also was a costly effort that caused headaches when reporters discovered data errors and government watchdogs said they could not verify the numbers.

Asked whether the second stimulus could work with all the restrictions of the first, LaHood replied: “I can’t think of a reason why it can’t.”

States’ Use of Highway and Transit Funds and Efforts to Meet the Act’s Requirements (GAO Report)

States’ Use of Highway and Transit Funds and Efforts to Meet the Act’s Requirements (GAO Report)

Three-quarters of Recovery Act highway funds have been obligated, and reimbursements from the Federal Highway Administration (FHWA) are increasing. As of November 16, 2009, $20.4 billion had been obligated for just over 8,800 highway projects nationwide and $4.2 billion had been reimbursed nationwide by FHWA. States continue to dedicate most Recovery Act highway funds for pavement projects, but use of funds may vary depending on state transportation goals. Almost half of Recovery Act highway obligations nationally have been for pavement improvements—including resurfacing, rehabilitating, and reconstructing roadways. About 10 percent of funds has been obligated to replace and improve bridges, while 9 percent has been obligated to construct new roads and bridges. States are taking steps to meet Recovery Act highway requirements; for example, both state and federal officials believe the states are on track to obligate all highway funds by the March 2010 1-year deadline. However, two factors may affect some states’ ability to meet the requirement. First, many states are awarding contracts for less than the original cost estimates; this allows states to have funds deobligated and use the savings for other projects, but additional projects must be identified quickly. Second, obligations for projects in suballocated areas, while increasing, are generally lagging behind obligations for statewide projects in most states and lagging considerably behind in a few states. In the weeks ahead, FHWA and the states have the opportunity to exercise diligence to both promptly seek deobligation of known savings and to identify projects that make sound use of Recovery Act funding.

Read more at http://www.gao.gov/new.items/d10312t.pdf

Putting the Cart Before the Horse (Newsweek)

Putting the Cart Before the Horse (Newsweek)
Could a transportation-based jobs stimulus stymie infrastructure reform?

When the Interstate 35 bridge between Minneapolis and St. Paul collapsed nearly two and a half years ago, killing 13 people, the unsexy issue of infrastructure maintenance seemed ready to have its political moment. The nation’s crumbling road system needed an infusion of federal dollars and perhaps an overhaul of its troubled funding system, and here, it seemed, was the perfect political moment to fundamentally improve the way we get around. Fast forward to December 2009: a long-term transport bill is stalled on Capitol Hill, months after the expiration of the previous law. Meanwhile, lawmakers are working on a stimulus bill that would spend tens of billions of dollars on infrastructure but do little to remake a flawed financing and planning system.

That’s a missed opportunity, according to some observers, who are concerned that a stimulus, while better than nothing, would fall short of its potential by ignoring the issues that the surface transport bill aims to address. An inventory of “shovel-ready” projects released this week by the American Association of State Highway and Transportation Officials offered no specifics, raising concerns that money could go to adding miles of asphalt to the nation’s highway system while failing to address decaying roads and bridges like the one in Minnesota. More important, by spending money on immediate projects, the nation could miss out on opportunities for longer-term job creation.

On Tuesday, President Obama announced a job-creation bill that will fund transportation and communications infrastructure nationwide, taking over where the February stimulus bill left off. “We’re going to see even more work—and workers—on Recovery projects in the next six months than we saw in the last six months,” he said. The speech follows on work by House and Senate Democrats, who in recent weeks unveiled plans that would spend as much as $100 billion by funding infrastructure projects that are ready to begin work. Legislators hope to finish the jobs bill by early 2010, before Congress reauthorizes a revamped surface transport bill—the law by which Congress sets the gasoline tax and the formulas for where that revenue goes toward construction and maintenance of roads and mass transit. The previous transport law, known as Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users, or SAFETEA-LU, has already been extended twice since expiring in September.

“For the last two years, there has been this drumbeat about reform,” says Robert Puentes, senior fellow at the Brookings Institution’s Metropolitan Policy Program. But now, he says, frantic efforts to deal with 10.2 percent unemployment have stopped the momentum. “There’s a frustration that we don’t have to have these conversations separately. We don’t have to have the reform conversation on one side and have to put that away for a conversation about reducing Americans’ unemployment rate, but unfortunately they have been separate.”

Infrastructure projects create lots of jobs because dollars go to manufacturers of equipment and supplies in addition to construction workers. But once big highway projects, long the mainstay of federal transportation spending, are built, the work is over. That’s true of maintenance, too, but it’s less capital intensive—when a project is repairing rather than starting from zero, there is a greater proportion of spending dedicated to wages. When states and cities invest in light-rail systems or expanded bus service, it encourages permanent economic growth by creating access to jobs and services. “Someone’s got to drive the bus or drive the train, and those jobs tend to be pretty good—they’re heavily unionized and have good benefits,” says Ethan Pollack, a policy analyst at the Economic Policy Institute.

Fixing roads and prioritizing mass transit is also more environmentally sustainable than building new highways. Mass transit and existing roads serve denser, older communities, while new roads tend to encourage suburban sprawl and more car traffic. Transportation accounts for 29 percent of American greenhouse-gas emissions, according to the Environmental Protection Agency.

The people who stand to receive the infusions of cash—construction contractors—have reservations, too. As they see it, any quick stimulus would be too short term to provide enough stability to the battered construction industry. “Shovel-ready projects are essential because they’re quick and effective, but what we’re seeing is that contractors are saying they’re not going to hire or buy equipment next year because states are not able to make long-term funding decisions,” says Jeff Solsby, spokesman for the American Road and Transportation Builders Association, an industry group. Solsby points to a November survey by the Transportation Construction Coalition that found that although almost 70 percent of respondents had received funding in the first stimulus, passed in February, 63 percent had to lay off permanent employees, and just 5 percent expected to add new employees. The coalition launched an advertising campaign, timed to coincide with Obama’s jobs summit Dec. 3, that calls for the reauthorization of SAFETEA-LU.

The worry is that by pumping large sums into infrastructure this spring, Congress might kill any appetite for a meaningful overhaul of surface transportation funding any time soon. “We’re very concerned about that,” says James Corless, director of Transportation for America, a coalition calling for a more environmentally and financially sustainable transit system. “We worry greatly that putting tens of billions of dollars into these existing stovepipes is not going to have the intended outcome: not just to create jobs but to put us on the pathway to a more sustainable 21st-century infrastructure.”

Progress on transit reauthorization is now stalled by disagreements between the different players in Washington. Rep. Jim Oberstar, a Minnesota Democrat and head of the House Transportation and Infrastructure Committee, favors a multiyear extension, while the White House and Department of Transportation are pushing for an 18-month patch before delving into the bill. Senate leaders had backed the White House, but recently came out in favor of a six-month extension. Oberstar says he’s willing to back a jobs stimulus now to prevent job loss but wants the bill to be accompanied by “a good faith, sincere agreement that [the Senate] would make specific steps within a specific framework” to renew SAFETEA-LU.

Even if Oberstar were able to extract such a promise, lawmakers would have to find a way to pay for the reauthorization. Despite widespread bailout fatigue and mounting concern about deficits, a jobs stimulus seems to have support because it’s targeted more directly at unemployed Americans. To sweeten the deal, key Democrats—including Sen. Barbara Boxer of California and Rep. Earl Blumenauer of Oregon—have called for the bill to be funded with repaid or unspent TARP (Troubled Asset Relief Program) funds. Rep. Peter DeFazio, who heads the House Subcommittee on Highways and Transit, lashed out at top White House economic advisers Larry Summers and Tim Geithner last month for opposing moving TARP funds to transportation projects. Beyond its support for a SAFETEA-LU extension, the administration has said little on the issue, but it appears to be in the driver’s seat on policy now—the Department of Transportation referred questions there. Blumenauer says he understands that the White House and Senate are dealing with many difficult issues, but he would still like to see some muscle behind SAFETEA-LU. “If the administration wanted to weigh in tomorrow, [then] in two to four weeks it’s good to go,” he says.

Meanwhile, jobs continue to slowly bleed out of the economy, raising the question of whether the stimulus should focus on simply keeping current jobs through supporting transit-system-operating funds rather than trying to create temporary new ones. At a hearing before Oberstar’s committee, Beverly Scott, the CEO of the Metropolitan Atlanta Rapid Transit Authority, told lawmakers that she might be forced to cut jobs, despite federal money pouring into her coffers, because the dollars were earmarked for capital, not for operations. As a result she had to let drivers go, even as ridership soared. The continued delays frustrate prospective employers. “They’ve known for five years that this deadline was coming” says Solsby. “The problem is entirely of Congress’s own making.”
By David A. Graham | Newsweek Web Exclusive

Dec 9, 2009