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Only 5 percent of $819b plan would go toward infrastructure

Critics say transportation is shortchanged


By Michael Kranish
Globe Staff / January 29, 2009
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WASHINGTON - Five weeks before becoming president, Barack Obama urged passage of a massive economic stimulus package, vowing that it would "create millions of jobs by making the single largest new investment in our national infrastructure since the creation of the federal highway system in the 1950s."

But the bill passed by the House yesterday dedicates only about 5 percent of the $819 billion measure to highway, mass transit, and rail projects, analysts said. That has prompted even some Democratic supporters to complain that the transportation spending was gutted by Republicans who insisted on more tax cuts - none of whom voted for the measure anyway - and by Obama advisers who shifted priorities to advance policy goals.

Many economists have argued in recent weeks that spending on infrastructure would do more to quickly create jobs and pull the country out of recession than tax cuts for individuals and businesses, or investments in healthcare and alternative energy - such as grants for health information technology and for a smart electricity grid. The tax cuts and investments are now sizable elements of the recovery package, with Obama's assent.

Representative Michael Capuano, a Somerville Democrat on the House Committee on Transportation and Infrastructure, said he has watched with frustration as spending for rapid transit and rail dropped during negotiations over the bill. For example, after an initial burst of enthusiasm for inter-city rail projects, the amount was reduced to $5 billion and then to $1.1 billion, he said.

The bill has $30 billion for roads and bridges and $12 billion for rapid transit, with decisions on specific projects to be made by state and local officials. But that's far less than originally sought by some Democrats, and could make it more difficult to fund some Massachusetts projects, such as work on roads, bridges, and the MBTA system, or a proposed extension of the commuter rail line from Lowell to Manchester, N.H.

"Priorities changed," Capuano said. "Someone says, 'How about food stamps, how about early childhood education?' "

Nonetheless, Representative Edward J. Markey, a Malden Democrat, praised the bill last night and said it would provide more than $6 billion for Massachusetts and could save or create thousands of jobs.

Capuano said he still supported the bill because it provides much-needed money for an array of interests, but said he would have preferred some of the tax cuts were replaced by transportation spending. He compared $1.1 billion for rail projects with $145 billion to provide $500-per-taxpayer rebates. "I know it is politically popular, but I don't think it will stimulate the economy," Capuano said of the tax relief.

The chairman of the transportation panel's subcommittee on highways and transit, Peter DeFazio of Oregon, became so angry about the reduction in transportation spending that he recently accused Obama's top economic adviser, Lawrence Summers, of arguing against such funds because he "hates infrastructure."

White House spokeswoman Jen Psaki responded yesterday, "Before he joined the administration and since, Larry Summers has consistently supported infrastructure funding as a means of stimulus." Psaki said that the stimulus bill has "a significant investment in infrastructure" and will be followed by other legislation, adding, "The goal has never been to accomplish every legislative goal in one fell swoop."

But in a sign of dissatisfaction among members of both parties with the amount of transportation spending, an amendment to increase the total from $9 billion to $12 billion passed by a voice vote yesterday.

The bill is expected to be reshaped further in the Senate in coming days, but it is not yet clear whether the transportation funding will grow.

Senator John F. Kerry, a Massachusetts Democrat who has been pushing for a $25 billion national high-speed rail network, said yesterday that he hopes the stimulus bill will provide an opportunity to get the plan underway. So far, Kerry said, he and other supporters have secured $2 billion for high-speed rail in the Senate bill, but he said "we have to do much more."

The American Society of Civil Engineers said in a report released yesterday - ahead of schedule to try to influence the stimulus debate - that the nation's infrastructure is so degraded that it gets a grade of "D." The report urged $2.2 trillion in spending, not including money for high-speed rail, which Obama and his vice president, Joe Biden, have said is a priority.

"Our greatest concern is that Congress is going to pass the stimulus and think that they have checked the box on infrastructure, when in reality there is much more to be done," said Janet Kavinoky, director of transportation infrastructure for the US Chamber of Commerce.

Shortly before Obama outlined his stimulus plans in a Dec. 6 radio address, the nation's governors told him that they had about $150 billion in transportation projects ready to build. It was estimated that each $1 billion of spending would produce 40,000 jobs. John Krieger, the federal transportation policy analyst at the US Public Interest Research Group, said that while his groups supports the bill, Obama initially left the impression that it would have such a massive component of urban transit and high-speed rail that it would lead to a "generational change" in transportation comparable to that of the interstate system of 1950s.

An analysis of the stimulus bill by Mark Zandi, chief economist of Moody's Economy.com, says most of the infrastructure spending will not occur until 2010, while some tax cuts might have more immediate impact.

That study, however, also found that a cut in corporate taxes would have an impact of 30 cents for every reduction of $1 in the coming year, while infrastructure spending would result in a payback of $1.59 for every $1 spent. The biggest impact could come from items that had been inserted into the bill with relatively little fanfare but which could be quickly enacted. The extension of unemployment benefits would have a payback of $1.63 per $1 spent, and an increase in food stamps would pay back $1.73.

Mchael Kranish can be reached at kranish@globe.com.

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