Debunking Stimulus Myth: Only 3% Allotted for Road, Bridge Infrastructure Spending
You’ve heard it here, there and everywhere in the news media – the time is now for a big-government economic stimulus package, not only to revive the economy, but to salvage
That’s one of the selling points used over and over again by pundits, as they are paraded out repeatedly on broadcast and cable network news programs – that so-called “shovel-ready” projects will challenge economic woes by revitalizing something we need to do anyway. But only 3 percent of the Obama stimulus plan is slated for such projects.
“The total size of the plan is about $750 to $800 billion – roughly $300 billion is for tax cuts for businesses and individuals,” CBS correspondent Chip Reid said on CBS’s Jan. 12 “The Early Show.” “The rest will be spent on everything from roads and bridges to renewable energy to create three to 4 million jobs. Republicans are raising red flags about the amount of spending.”
In reality, little of the $850 billion American Recovery & Reinvestment Act of 2009 proposed by congressional Democrats will actually be spent on actual road and bridge projects – the sort of things most people think of when they hear infrastructure spending, according to the office of Sen. Jeff Sessions, R-Ala.
The recent proposal distributed by congressional Democrats will provide only an additional $15 billion in 2009 and 2010 for road construction and repair. And of that $30 billion total provided, some funds are earmarked for narrow uses such as technology training or construction of roads on Indian reservations and in national parks.
According to those calculations, that’s just a little more than 3 percent meant to be spent on actual road and bridge construction. Compare that $30 billion allocated in this bill to the most expensive road project in
“This $900 billion economic stimulus is being sold as a massive highway infrastructure bill, when, in truth, only 3 percent of this money is committed to highway construction,” Sessions said in a statement. “This is the largest spending bill the Congress has ever considered, and the American people – who ultimately are going to pick up the tab – need to know exactly what they are getting, or not getting, for their money.”
Still, even recently sworn-in President Barack Obama is out on the stump selling it as a road and bridge stimulus proposal.
“We’re making a series of investments that point to the future, as well as just dealing with rebuilding our roads, bridges, et cetera,” Obama said on ABC’s Jan. 11 “This Week with George Stephanopoulos.” “Now, there's no doubt that that probably gives you the most bang for the buck in terms of stimulus, in terms of getting the economy started and putting people back to work. But there are only so many projects that you can do quickly of that sort.”
And reporters are on board with the mythology of the stimulus package also. CNBC’s John Harwood outlined the road and bridge component of the stimulus on NBC’s Jan. 11 “Meet the Press,” but wasn’t able differentiate just how much.
“He’s got a hundred billion dollars of infrastructure, try to spend on roads, bridges, electricity grid, green jobs, alternative energy spending. He’s got $300 billion worth of tax cuts, most of which he campaigned on, some of which he’s added to try to lure Republicans to support this package on the Hill.”
The mantra – this massive spending package is needed to rescue
“Sometimes it’s true that the government is better than private industry or individual households in moving us out of such a big hole,” Harris-Lacewell said. “Most importantly, because the government can take on enormous projects like the rebuilding of our crumbling infrastructure, the movement of our energy plan into a more green energy economy, these kinds of things are actually best undertaken by massive projects.”
“We could put easily a million people to work just in rebuilding transportation infrastructure and that’s everything from white collar jobs like architects to blue collar jobs like the people actually out there pouring that cement for you,” she continued.
“It’s just 2.7 percent of the spending proposal that’s being contemplated for what every person would normally characterize as infrastructure,” Rep. Peter Roskam, R-Ill., a member of the House Ways and Means Committee, said to the Business & Media Institute. “And that’s really a weakness in this proposal. So, look – it’s a fig leaf - $30 billion, which is the infrastructure piece in an $850 billion plan. You could only characterize that as a fig leaf.”
“Again, what you see in Democrat bill is 14 years of pent-up demand to increase the size, scope, power and expense of the federal government,” Rep. Jeb Hensarling, R-Texas, a member of the House Financial Services Committee, said to BMI. “What are they are doing within this bill, which they parade under the title of ‘stimulus,’ is fund 150 different federal programs – 32 brand-new programs, 19 programs which OMB [Office of Management and Budget] has labeled as ineffective or shown no results.”
In a conference call on Jan. 23, House Minority Whip Rep. Eric Cantor and Hensarling pointed out some of the more egregious spending provisions in the House Democrat proposal:
For every dollar that is spent for small business tax relief, $4 are being spent for the maintenance and new grass in
“How any of this fits under the banner of economic stimulus is beyond me,” Hensarling said. “I think it would prove to be beyond the American people as well.”
The 2007 collapse of the I-35W bridge spanning the Mississippi in Minneapolis, Minn. was the initial event that prompted some in the media to start calling for higher taxes and up to $1.6 trillion in government spending to update infrastructure. However, the $30 billion allocated in this proposal represents a tiny fraction of that number.