By Joseph Picard: Subscribe to Joseph's RSS feed
June 17, 2010 6:34 PM EDT
The American Reinvestment and Recovery Act, enacted in February 2009, is the Obama administration's stimulus package to save and revive the American economy, which at the time was in the throes of what is now being called the Great Recession. In tax breaks and spending the stimulus totaled in the neighborhood of $800 billion, about half of which has yet to be spent or granted.
When government buildings are included, about $100 billion of stimulus funds were targeted for infrastructure improvements. Vice President Joe Biden, at the time of the signing of the package, trumpeted the administration's plan to deal with the nation's aging and debilitated infrastructure.
"An estimated 400,000 jobs will be created over the next two years nationwide, if we invest in improving and upgrading our nation's infrastructure, including mass transit systems, highways, bridges and ports," Biden said.
A great many jobs in the construction trades have been created in the 16 months since the Vice President made that statement but, according to experts, his prediction is somewhat off.
"On a net basis, we are not on pace to reach 400,000 new jobs in construction in two years," said Ken Simonson, an economist with Associated General Contractors. "The reason is that the stimulus funds have not flowed down to project levels at the rate anticipated."
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Simonson explained that monies for highway repair and construction did move rapidly through the funding system, and road construction projects were responsible for the creation of about 280,000 jobs since early 2009.
"But other projects, like water treatment plant and power plant projects, received stimulus funding at a relative trickle," Simonson said.
One of the reasons for delays was ARRA's "buy American" clause.
"Construction of water treatment plants had not been occurring in so long a time, American companies no longer made vital components, so the developers of new plants could not buy American," Simonson said.
The developers of such projects had to obtain waivers to buy parts and materials from other countries, and the bureaucratic process was time-consuming.
Another delay resulted with projects related to monies allocated for high-speed rail projects.
"America does not have high-speed rail," Simonson said.
States with transportation projects wanting ARRA funding had to work with the federal government to reshape their bids to ask for "higher speed" rail funds, since they could not meet high-speed rail criteria. This bureaucratic waltz also consumed time.
"The infrastructure funding is, however, finally getting out there," Simonson said. "We're behind schedule, but more people are working in the construction trades because of the federal stimulus."
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