Move over recovery summer, it’s time for fabulous fall as President Obama ups the stimulus spending ante by $50 billion. Mr. Obama announced his generosity at Monday’s Laborfest pep rally in Milwaukee, Wisc. An audience of union members cheered the plan, knowing the majority of this public cash infusion would be transferred into their own pockets. That’s just the thing to energize labor in advance of November elections that look increasingly bleak for Democrats.
Mr. Obama promised the latest bundle of cash would be spent rebuilding roads, laying new rail lines and restoring runways. It sounds harmless until you consider that, under the Davis-Bacon Act, these public projects must pay inflated labor rates that ensure unions are the primary beneficiaries. “The bottom line is this, Milwaukee,” Mr. Obama explained. “This will not only create jobs immediately, it’s also going to make our economy hum over the long haul.”
Most Americans would say the economy has been more ho-hum in the year-and-a-half since Mr. Obama signed the $814 billion in stimulus into law. According to the administration’s recovery.gov website, $210 billion in stimulus contracts, grants, loans and entitlements remains unspent. States that receive this largesse often need a great deal of time to turn the cash into the make-work projects that offer few concrete benefits to the taxpayers who are footing the bill.
If the latest spending spree meant building new road capacity in the country’s most congested regions, a case could conceivably be made for federal involvement. Mr. Obama’s words, however, were carefully chosen. He spoke of 150,000 miles of roads that will be “repaired” or “modernized.” That means existing roads would be repaved or “improved” with congestion-causing features like bicycle lanes and traffic-calming measures such as speed bumps. The administration’s anti-growth leftists only want new construction for 19th-century passenger-rail technologies. As demonstrated this week in London and Paris, labor unions can hold a capital hostage when commuters are forced onto government-controlled rail lines that go on strike. The leverage in asking for higher pay and benefits is lost when employees drive themselves to work.
Such drivers in the United States can expect to pay a lot more. The president has resurrected a proposal he once cosponsored as a senator to create a new federal agency to dole out cash to union-backed road projects on a permanent basis. According to the text of the infrastructure bank legislation, the agency would promote the “use of smart tolling, such as vehicle miles traveled and congestion pricing, for highway, road and bridge projects.” In other words, it’s a way to raise taxes on commuters without using the politically unpopular “tax” word.
Taxpayer-funded roadside billboards would also be used to boost popularity. As anyone who took a road trip this holiday weekend can attest, America’s highways are littered with orange cones and signs proclaiming that the stimulus is “Putting America to work.” When Illinois Republican Rep. Aaron Schock proposed in July to prohibit federal funding for this electioneering, only 11 Democrats voted with him.
Democratic solidarity may not last, as members grow uneasy about the prospect of voting for a costly package they will soon have to defend on the campaign trail. As none of the previous stimulus attempts succeeded, there’s no reason to believe this one will be any different. The best way to put America back to work is to discard the Keynesian theories and realize our economic woes are caused by spending too much, not spending too little.