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RUANE: Road builders don’t want your stimulus
Last time feds boosted spending, states just cut back
Question of the Day
Mr. President, the country doesn’t need another stimulus like the last one. The 2009 Recovery Act road and bridge initiative set the movement toward really improving the nation’s transportation infrastructure back big-time.
Problem One is that it gave your administration and most members of Congress political cover to take a pass on tackling the multiyear reauthorization of the highway and transit program that was due Oct. 1, 2009. That’s been kicked down the road for two years. Only now, because the Highway Trust Fund has been bled dry, the program faces a potential 35 percent year-on-year cut - or complete shutdown - at the end of September.
Problem Two is the Recovery Act set up the federal surface transportation programs for another unwarranted - but politically expedient - public-relations pasting. The “shovel ready” caricature of the road and bridge “stimulus,” crafted to counter right-wing criticisms, misplaced the focus of these investments on temporary results instead of long-term value. In the process, this rhetorical device helped denigrate the work of thousands of skilled Americans who plan and design transportation projects and operate multimillion-dollar pieces of sophisticated equipment.
The federal program doesn’t patch potholes. Think Woodrow Wilson Bridge, the Metro and the Springfield Mixing Bowl.
Establishing the transportation construction industry as the poster child and media backdrop for the job-creating power of the $825 billion “stimulus” left us holding the bag with our credibility damaged because the investment was too little.
Far from the public perception created, the $27.5 billion road and bridge “stimulus” funding over three years, while certainly a significant amount, represented only 3.5 percent of total Recovery Act outlays. In context, it was just slightly more than half the amount the federal government was already investing in this core function in a single year. In contrast, the Recovery Act authorized $237 billion in tax incentives for individuals.
By virtually any measure we can find, the road and bridge stimulus was more of a job-saver than creator. I’m not saying the Recovery Act road and bridge funding was wasted, however - far from it. At peak spending in 2010, about 320,000 American jobs throughout the economy - 108,000 on construction sites - were being wholly supported by the initiative.
Without the stimulus, most of those people would have been in the unemployment line if the states had still cut their own funding.
The reason it did not create significant, new jobs as hoped is because it did not result in significant market growth.
U.S. Census Bureau data show the total value of road and bridge construction work put in place across the nation in pre-Recovery Act 2008 was $81.4 billion. In 2009, it only grew $800 million to $82.2 billion. In 2010, it totaled $82.7 billion.
Why didn’t we see growth? Many states, reeling from the recession and facing constitutional mandates for balanced budgets, simply substituted the federal stimulus dollars for their own investments.
Contract data show 20 states put less money out for road and bridge work in either 2009 or 2010 than they had in 2008 - despite the additive “stimulus” funds. Seven states spent less on new contracts in both years.
Notably, we have proven again the real power of transportation infrastructure investments vis-a-vis most government spending. Not only were American jobs supported, but we also have tangible capital assets that will facilitate economic activity for years ahead. Recovery Act dollars financed 13,385 road and bridge projects that resulted in 41,510 miles of improvements.
Now is the time to take what we’ve learned and do it right.
Both the House and the Senate have developed highway and transit bills that are solid from a policy perspective and await action. There would be no more earmarks for “bridges to nowhere.” But there would be more performance standards and accountability.
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