Fed eyes public works investments
Published on 06/01/2011
Financial concerns have restricted public infrastructure investments, and the dearth of opportunities has likely resulted in the decline of construction jobs in over half of the country's metropolitan areas between April 2010 and April 2011, according to new data released by the Associated General Contractors of America (AGC).
"At a time when private sector construction activity appears on the mend, local, state and federal funding cuts for infrastructure projects may be forcing layoffs in many metro areas," said Ken Simonson, the AGC's chief economist. "The economic consequences of these cuts will only worsen as the economy begins to suffer the consequences of deferred maintenance and stalled projects."
There is a push at the federal level, however, to inject more money into the public works sector.
In mid-May, the Treasury Department renewed its case for a re-authorization of the Build America Bonds (BABs) program, which helped state and local governments to finance large infrastructure projects with a federal subsidy. Congress allowed the program to expire in December 2010, but local and state governments, in addition to the Obama administration, strongly supported BABs.
There has also been progress toward multi-year surface transportation legislation. In late May, a bipartisan group of Senators announced that they have agreed to the contours of a $56 billion bill. What is still unclear, though, is whether the bill would span two or six years. Regardless, a bill is expected to be introduced, debated, and approved by the Senate before July 4.
