Jan 12 2010
ARRA’s Doing What It’s Supposed to Do
“According to submissions that we received from states, metropolitan planning organizations, and public transit agencies, 8,587 highway and transit projects are under construction in all 50 states, three territories, and the District of Columbia, totaling $19.7 billion, as of November 30, 2009. These projects have created or sustained more than 250,000 direct, on-project jobs, with payroll expenditures of $1.3 billion.”
So said House Transportation and Infrastructure Committee Chairman James Oberstar (D-MN) and Highways and Transit Subcommittee Chairman Peter DeFazio (D-OR) in a joint statement this week responding to an Associated Press story that claimed the American Recovery and Reinvestment Act (ARRA) had no affect on unemployment. Read the full statement on the committee’s website.
The claims made in the AP article have also prompted Transportation Secretary Ray LaHood, others in the Obama administration, and the transportation industry to defend the investments and demonstrate the need ARRA is filling in state budgets across the country. With the recession hitting states harder than expected in 2009 and 2010, it is unpleasant to imagine what might be the current situation had the federal government not provided extra, no match funds for roads, transit, waterways, and water infrastructure.
The fact that the unemployment rate is still at 10 percent and much higher in the construction sector remains true. But much of that is the result of lagging private commercial and housing development – something in which government has not traditionally intervened. Additionally, less than 10 percent of ARRA went to infrastructure, making it hard for highways, transit, and water systems alone to cure our economic woes.
From ASCE’s perspective, we would have preferred ARRA to contain more new design opportunities for our members. Based on time constraints and the seriousness of the problem, however, the Society strongly supported the measure as the most effective short-term course of action and provided a set of principles for determining projects.
So it seems a little unfair for the AP to criticize the entire infrastructure program because it did not do what it was not intended to do. Data collected by the T&I committee and the Recovery Board show that jobs were in fact created or saved directly from federal stimulus funds. It was, and still is, the hope of every supporter of ARRA that those new direct jobs would stimulate activity in the economy and in turn create “indirect” jobs. With thousands of projects in all types of infrastructure still waiting to begin and a natural winter construction slow-down, it is doubtless those jobs won’t come overnight.
ASCE estimates that there is about $2.2 trillion worth of infrastructure work that needs to be done over the next five years. So the $100 billion included in ARRA is hardly going to put a dent it that - but it’s a start. We can move forward from that start by making progress on needed policy changes such as a new six year authorization of the surface transportation system and reauthorization of the Clean Water Act. If we want our economy to regain the strength it once had, we will need a first class infrastructure as the foundation. It’s a mistake today to misinterpret incomplete data. It’s a greater disservice to our future if we abandon the path for improving infrastructure.
