Slow progress on some big stimulus projects
- Source: Slow Progress on Some Big Stimulus Projects Wall Street Journal, August 14, 2010
A year and a half after Congress passed the economic-stimulus plan, the state aid and tax cuts in the package have nearly ended, but some of the big infrastructure projects touted by the Obama administration are still months from visible development.
Critics of the stimulus have seized on the slow progress as evidence that the plan has been a costly failure. And amid a continued high jobless rate, that argument appears to be resonating with voters.
The administration said stimulus spending was always intended to roll out in stages, over a period of two years, and that the pace of outlays for infrastructure would be slower than for other parts of the package. But recent opinion polls suggested the White House has struggled to communicate that message, particularly after its emphasis on "shovel-ready" projects during the debate over the plan's passage in early 2009.
In a Wall Street Journal/NBC News poll in May, just 18% of respondents said the plan was already helping to improve the economy, and just 20% said they thought it would help in the future. Confidence appears to have slipped from July 2009, when 48% of respondents said the plan was helping the economy already or would help it in the future.
President Barack Obama's stimulus package had three main elements. The largest chunk was allocated to tax breaks and other help for individuals and businesses. Most of those tax provisions, which have an estimated price tag of $336 billion, have been paid out.
A second portion, projected to cost about $296 billion, was allocated to pay for unemployment benefits and food stamps, and to plug holes in states' school and Medicaid budgets. Most of that money has also been spent, prompting the Congressional efforts to extend the funding for state budgets. The legislation was signed into law Tuesday, providing another $10 billion for schools and $16 billion for Medicaid, offset by cuts to food stamps.
The third piece of the package offered $230 billion to fund an array of projects ranging from road repaving to modernizing the electricity grid to launching new high-speed rail services. Administration officials said when pushing for the program that the money would be targeted at projects that could create jobs quickly.
So far, $182 billion of the infrastructure money has been awarded, though the government has paid out only $66 billion of the total.
The biggest projects have been the slowest to start. None of the $17.5 billion for incentive payments for doctors and hospitals to start using electronic health records has been spent yet, because regulations for the payments were only finalized in July.
A few recipients of $7.2 billion in grants allocated to the expansion of broadband Internet services have started laying cables, but the rest are still busy with pre-construction work, such as environmental assessments, local approvals to attach fiber to utility poles, permits for rights of way and hiring subcontractors.
Groundbreaking for the first major high-speed rail project took place this month, when steel rails were delivered to Brunswick, Maine, for upgrades to a 30-mile stretch of track running to Portland. The ceremony came seven months after the administration announced the recipients of $8 billion in grants for the work. The administration is still finalizing the grant agreements and most of the money hasn't formally been made available yet.
- Obama Stimulus Is Unspent as Projects Lag From Los Angeles to Philadelphia Bloomberg, December 29, 2010
- Stimulus Worked IMF, December, 2010