Research Briefing

Obama’s “New” Infrastructure Plan Just More Of The Same From His Failed $814 Billion Stimulus

“[P]resident Barack Obama Is Using A Labor Day Appearance In Milwaukee To Announce He Will Ask Congress For $50 Billion To Kick Off A New Infrastructure Plan…” (Mike Allen, “President Obama Unveils $50 Billion Road, Rail Plan,” Politico, 9/6/10)

WHILE SELLING THE STIMULUS, OBAMA AND COMPANY CLAIMED THE INFRASTRUCTURE JOBS WOULD BE CREATED IMMEDIATELY

President-Elect Obama Was Confident That Shovel-Ready Infrastructure Projects Would Lead Recovery. OBAMA: “Now, here's what I'm confident about, that our economic recovery plan, our 21st-century investments will create jobs immediately that would not otherwise be created. We've got shovel-ready projects all across the country that governors and mayors are pleading to fund. And the minute we can get those investments to the state level, jobs are going to be created.” (President-Elect Obama, “Remarks in Chicago Announcing Energy and Environment Team,” 12/7/08)

President Obama Said That His Infrastructure Spending Would Create Jobs Immediately. OBAMA: “We're also investing in critical infrastructure, green jobs, making sure that we're weatherizing two million homes. Making certain that we're laying an electric grid that can save energy over the long term and wean ourselves off Middle Eastern oil. And so there are a range of investments that not only provide jobs immediately but are also designed to lay the groundwork for long-term economic success.” (NBC, “Nightly News,” 2/3/09)

President Obama Promised The Largest Infrastructure Program Since Eisenhower That Would “Create Nearly 400,000 Jobs Rebuilding Our Roads, Our Railways, Our Dangerously Deficient Dams, Bridges, And Levees.” OBAMA: “So across the country, States need help. And with my plan, help is what they will get. My plan contains the largest investment increase in our Nation's infrastructure since President Eisenhower created the national highway system half a century ago. We'll invest more than $100 billion and create nearly 400,000 jobs rebuilding our roads, our railways, our dangerously deficient dams, bridges, and levees.” (President Barack Obama, “Remarks on Economic Stabilization in Springfield, Virginia,” 2/11/09)

Obama Claimed That The “Core” Of The Stimulus Was Putting People To Work On Roads, Bridges, Levees, And Transit Systems.  OBAMA:“At the same time, look around us.  Look at this construction site right where we're standing.  We're surrounded by unmet needs and unfinished business -- in our schools, in our roads, in the systems we employ to treat the sick, in the energy we use to power our homes.  And that's the core of my plan:  putting people to work doing the work that America needs done. We're here today because there's a lot of work that needs to be done on our nation's congested roads and highways, crumbling bridges and levees, and crowded trains and transit systems. Because we know that with investment, we can create transportation and communications systems ready for the demands of the 21st century -- and because we also know what happens when we fail to make those investments.” (President Barack Obama, Remarks By The President On Infrastructure, Springfield, VA, 2/11/09)

Vice President Biden Predicted 400,000 Jobs Would Be Created By Infrastructure Projects. BIDEN: “Over 400,000 jobs nationally will be created by the infrastructure investments that the Congress, God willing, is going to pass and the President is going to sign into law very shortly. Rebuilding train stations in my state and here, like this very one we're doing now, repairing roads, bridges, waterways, ports; investing -- investing -- in infrastructure that can carry the economic growth of the 21st century.” (Foon Rhee, “Biden Highlights Infrastructure Spending,” The Boston Globe, 2/5/09)

Biden Said The Stimulus Was “Balanced” Enough To Create Three To Four Million Jobs – “Particularly With Regard To Infrastructure.” BIDEN: “So I think it's as close to as good a balance as you can get, because I think it will create three to four million new jobs, I think it will in fact have--begin to lay the foundation for some of the changes in the 21st century we need, particularly with regard to infrastructure, and tax structure, as well.” (CNBC, “CNBC Reports,” 1/29/09)

Biden Claimed That Infrastructure Spending In The Stimulus Is Creating Jobs “That Will Support Economic Growth For Years To Come.” BIDEN:“As for the final third, the act is financing the largest investment in roads since the creation of the Interstate highway system; construction projects at military bases, ports, bridges and tunnels; long overdue Superfund cleanups; the creation of clean energy jobs of the future; improvements in badly outdated rural water systems; upgrades to overtaxed mass transit and rail systems; and much more. These investments create jobs today — and support economic growth for years to come.” (Joe Biden, Op-Ed, “What You Might Not Know About The Recovery, The New York Times, 7/26/09)

Biden Claimed Stimulus Is “Providing Some Significant Degree Of Optimism” And Infrastructure Is Playing A Role In That. BIDEN: “And the Recovery Act has just provided some significant degree of optimism.  Rebuilding our crumbling infrastructure, sparking a clean energy revolution, transforming American health care, creating the best education system in the world -- that's our future.”  (Vice President Biden, Remarks By The President And The Vice President On The One-Year Anniversary Of The Signing Of The Recovery Act, Washington, D.C., 2/17/10)

White House’s Stimulus Fact Sheet Touts The “Historic Investment” In Infrastructure And Promise Of “Enhanced Economic Growth.” “The American Recovery and Reinvestment Act makes a long-overdue, historic investment in our national infrastructure – including our roads, bridges, public transit, housing and broadband – to save or create nearly 400,000 jobs for American workers today and power enhanced economic growth for the decades to come.” (American Recovery And Reinvestment Act, “A $150 Billion Investment in Our Nation’s Infrastructure,” WhiteHouse.gov, 2/17/09)

Since President Obama’s Shovel-Ready Stimulus Was Passed, The Nation Has Lost 824,000 Construction Jobs.  (Bureau Of Labor Statistics, BLS.gov, Accessed 9/6/10)

DURING UNSUCCESSFUL “RECOVERY SUMMER,” INFRASTRUCTURE PROJECTS WERE SUPPOSED TO LEAD US TO A RECOVERY

The White House Touted Billions Of Dollars That Were To Be Spent On Infrastructure During “Recovery Summer.” “Between this tax relief, direct aid, and shovel-ready projects, the Recovery Act has already put to work $620 billion dollars, and created or retained between 2.2 and 2.8 million jobs. The remaining support, though, will be directed increasingly toward infrastructure—over 70 percent of all remaining dollars will be spent on projects. In doing so, the Act will continue to drive job growth: jobs created or retained by the Recovery Act will reach at least 3.5 million before the end of 2010. And this is just the start: an investment in long-term infrastructure is an investment in long-term innovation, industry, and jobs.” (Office of the Vice President, “Summer Of Recovery,” WhiteHouse.gov, 6/17/10)

During “Recovery Summer” A “Wave Of Public Works Projects” Were Supposed To Take Place To Help The Economy, But The “Recovery Has Not Taken Root.” “Whatever happened to recovery summer? This was supposed to be the season the economy heated up, thanks to a wave of public works projects, funded by the government's stimulus program. But summer is coming to an end, and the recovery has not taken root. (The Labor Department on Friday reported a slight rise in the unemployment rate to 9.6 percent in August as more people were looking for work.)” (Scott Horsley, “‘Recovery Summer’ Ends With An Economic Pothole,” NPR, 9/3/10)

“Let’s See, What Happened This Summer? Easy Question. The Recovery Went Missing.” (Bill Bonner, “The Summer The Recovery Went Missing,” The Christian Science Monitor’s “The Daily Reckoning” Blog, 9/2/10)

BUT OBAMA’S INFRASTRUCTURE SPENDING DOESN’T CREATE THE JOBS THE U.S. NEEDS

Moody’s Chief Economist, Mark Zandi, Says Infrastructure Spending In The Stimulus Was Not “Particularly Helpful.” “Zandi called it a mistake to put infrastructure spending into the stimulus bill. ‘It's good policy and we can use the jobs, but it's not an effective way of getting money into the economy quickly,’ he said. Nor was spending on Obama priorities such as education and broadband ‘particularly helpful’ in putting money into the economy fast, he told me.” (Jill Lawerence, “Stimulus Plan in Hindsight: Did Obama's Agenda Hobble Economic Recovery?,” Politics Daily, 9/2/10)

Obama’s Infrastructure Spending On Roads And Bridges From First Stimulus “Has Had No Effect Of Local Unemployment.” “Ten months into President Obama’s first economic stimulus plan, a surge in spending on roads and bridges has had no effect on local unemployment and only barely helped the beleaguered construction industry, an Associated Press analysis has found.  Spend a lot or spend nothing at all, it didn’t matter, the AP analysis showed: Local unemployment rates rose and fell regardless of how much stimulus money Washington poured out for transportation, raising questions about Obama’s argument that more road money would address an ‘urgent need to accelerate job growth.’” (“What Stimulus?  Road Projects Aren’t Boosting Jobs Much,” The Associated Press, 1/11/10)

NBC’s Lisa Myers Reported Last May That Stimulus Funds Weren’t Going To Areas That Need Jobs Most Because Of The Requirement That Projects Be Shovel Ready.  Lisa Myers: “An Associated Press analysis of $18.9 billion in road and bridge stimulus projects, announced by states so far, found that areas that need jobs most are getting the least help. Counties with high unemployment above 11.5 percent so far are getting an average of only $59 per person. Those with low jobless rates received considerably more – $89 dollars per person. … Part of the problem is the requirement that stimulus projects be shovel ready so funds can be spent immediately. Officials say that works against poor counties where costly engineering environmental studies are luxuries.” (NBC’s “Nightly News,” 5/12/09)

Shovel-Ready Projects Were Not Allowed To Start. “As of July 10, more than 3,600 of the 5,600 road projects approved by Washington -- including six of the 10 largest approved projects -- had not been given the green light to start construction ... In Florida, not a single highway project had been given the go-ahead to start construction by July 10 -- even though the state, with an unemployment rate of 10.6%, had 272 projects valued at more than $1 billion approved by the federal government.” (Don Lee, “Highway Spending Isn’t The Stimulus It Was Envisioned To Be,” The Los Angeles Times, 7/20/09)

AP Fact Check Found That Many Stimulus Initiatives, Including Transportation, That The White House Touted Would Likely Fall Far Short Of The Administration’s Intended Results. “The Obama administration claimed this week that $100 billion invested in innovative technologies under the economic stimulus law is ‘transforming the American economy’ by putting the nation on track for technological breakthroughs in health care, energy and transportation.” (Frederic J. Frommer, “FACT CHECK: Stimulus Assessments Overly Optimistic,” The Associated Press, 8/26/10)

• High-Speed Rail Projects Are A “Difficult, Multiyear Effort” That Will Leave Cash-Strapped States With The Bill.  “Not everyone shares the White House's optimism about the prospects for high-speed rail. A recent analysis by the Government Accountability Office concluded that building high-speed rail service in the U.S. ‘is a difficult, multiyear effort’  that hinges on financing that goes ‘far beyond the funds provided by the Recovery Act in a time of continuing federal and state deficits.’” (Frederic J. Frommer, “FACT CHECK: Stimulus Assessments Overly Optimistic,” The Associated Press, 8/26/10)
• And It May Take “Years To Design And Test New Rails Cars” To Meet “Crashworthiness” Standards. “Another challenge for some projects will be meeting the 2017 deadline to spend Recovery Act funds, the GAO said. The capacity to manufacture passenger rail cars and other high-speed equipment exists in the U.S. But it may take years to design and test new rail cars that meet U.S. crashworthiness standards, which are different than much of the rest of the world.” (Frederic J. Frommer, “FACT CHECK: Stimulus Assessments Overly Optimistic,” The Associated Press, 8/26/10)