Congress debates 2nd stimulus, transportation funding plan
Published on 02/19/2010
Transportation infrastructure across the nation is crumbling, and cash-strapped states are seeking financial assistance from the federal government for maintenance, enhancement, and expansion projects. The U.S. Congress is currently considering two options that, if approved, will send billions of dollars to state transportation departments.
The first bill being debated is the so-called 'Jobs for Main Street' which has been styled as a limited supplement to last February's American Recovery and Reinvestment Act (ARRA). The House version of this second stimulus package - which was passed by the chamber before the winter recess - allocates $27.5 billion for highways, $8.4 billion for transit, and $500 million for airports. The Senate is less enthusiastic about spending more federal money and reportedly would like to see total transportation spending in the bill reduced to under $30 billion.
The House version of the second stimulus also extends the Safe, Accountable, Flexible, Efficient Transportation Equity Act (SAFETEA-LU), which set aside $42 billion annually for state transportation construction, with its original amount of funding until the end of the fiscal year. SAFETEA-LU expired at the end of September but Congress has extended the legislation until the end of February at the annual level of $30 billion. According to the Associated General Contractors of America, states have a $62 billion backlog of 'shovel-ready' projects that need funding.
Many lawmakers and officials, though, prefer a separate, multi-year replacement for SAFETEA-LU instead of another extension of the expired program. According to the American Association of State Highway and Transportation Officials, state transportation departments are unable to make long-term plans without stable fiscal projections.
The House and Senate are both expected to propose a six-year successor for SAFTEA-LU with a price tag of approximately $500 billion early this year. However, some experts have pointed out that this price-tag may be too much for federal government to bear considering its recent spending. New transportation taxes and bonds have both been floated as potential revenue sources.
The White House has yet to back the Congressional Democrats' transportation bill and has said it will not support new transportation taxes in the current economic climate.
Conservative lawmakers and advocacy groups are putting up stiff resistance to the 'Jobs for Main Street' bill. They contend that stimulus spending on transportation has failed to retain and create new jobs. A recent study by the Associated Press (AP) supports this position. After analyzing ARRA employment figures, the AP found no correlation between stimulus spending on transportation projects and the number of construction workers hired or fired.
Construction industry experts have rejected the AP's findings.
"The fundamental assumptions in today's Associated Press story are flawed," said Ken Simonson, chief economist for the Associated General Contractors. "It is virtually impossible to measure the impact of $4 billion by looking at overall employment figures for an industry experiencing a $137 billion drop in activity - especially when only one in twenty construction workers stand to benefit from those stimulus funds."
Still, some Senate Democrats are questioning the efficacy of another stimulus bill.
"Senator Nelson is very concerned about the level of federal spending and the deficit," said a spokesman for Ben Nelson, D-NB. "He would look at a jobs package, but those factors would weigh heavily in his mind."
