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Stimulus will build roads to recovery

Mike Salsgiver
Dolan Media Newswires

Portland, OR – Now that President Barack Obama and Congress have passed the federal stimulus bill, the real work begins. States, communities and businesses must sift through the 1,073-page bill to understand money allocations, spending limits and project deadlines.

The U.S. government, in an unprecedented effort to reinvigorate an economy in trouble, has spent or committed to spend a total of nearly $3 trillion since June 2008. Given that the amount is only slightly less than the entire federal budget passed last year, the nation is on a spending spree that drifts into uncharted territory.

Today’s realities tell us that without new federal expenditures on projects to generate economic activity, the U.S. economy would continue its spiral toward financial gridlock.

Two-thirds of the stimulus bill provides tax relief (38.11 percent), aid to states for Medicaid (11.39 percent) and assistance to states to provide social services (9.18 percent). Approximately $178 billion of the total $790 billion will go to what would reasonably be considered job-creating infrastructure development in structures and transportations systems.

The bulk of the money will flow to state agencies through existing programs and long-set formulas. That is positive, because it means, in large part, that states will not be competing against each other for the same pot of money. However, some of the money is being offered through competitive grants. There are probably thousands of requests for every available dollar and the competition will be fierce.

In some cases, governors are publicly questioning whether to accept money appropriated to them. In other cases, there may be a division between a governor and the state legislature. The federal bill provides certain circumstances under which a governor may choose not to accept money, but the legislature can opt to accept it. How states navigate that kind of situation remains to be seen.

Another issue will be the impact of this money on a state’s ability to continue to pay for its programs. In other words, money used today may backfill a program tomorrow, but may not provide a sustainable stream of money for the future.

These questions aside, the time for debating the outline and specifics of the bill has passed. The major question in front of us now is: How do we direct the dollars to the highest-impact areas as quickly as possible to retain and create jobs and move infrastructure projects forward?

According to information provided by The Associated General Contractors of America, in concert with analysis done by Professor Steven Fuller of George Mason University, every billion dollars spent creates approximately 28,500 jobs, generates $3.4 billion in economic activity and generates $100 million in additional personal spending. These numbers alone tell us this legislation can start the U.S. down the road to recovery.

Mike Salsgiver is the executive director of the Oregon-Columbia chapter of The AGC of America.

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