Transportation Infrastructure in the Stimulus
David Sirota is very displeased to see “only” $85 billion in infrastructure spending in the proposed stimulus package. I take a different view. It’s important to recall that infrastructure spending in the stimulus package is limited—and appropriately so—by the quantity of genuinely useful projects that it’s possible to move forward with. You don’t want to build misguided projects, or just promise things that can’t actually be delivered. Dave Alpert notes that the volume of transportation funding appears to fall short of some categories of identified backlogs. But even here there’s a need to exercise caution. Many items of backlog lists would, in fact, need to go through years worth of environmental review and so forth before you could actually build them. And the incentive structure that exists when compiling these lists militates in the direction of governors and others overestimated the volume of projects in need of funding.
What’s more, there’s a difference between saying (to use some hypothetical numbers) “here are 1,000 different projects, each costing $1 billion, and each of which is ready to go” and saying “we’re ready to go with $1 trillion worth of spending on a 1,000 projects.” The reason is that there’s only so much equipment, qualified manpower, logistical capabilities, etc. It could be that all 1,000 of those projects are ready to go when taken on their own terms, but that you can’t actually move forward with all of them.
Last but by no means least, it’s important not to let stimulus-mania crowd out all other considerations. It was true that America’s infrastructure policy needed a serious overhaul before this economic crisis hit. And it will continue to be true that the way infrastructure spending works in the United States is screwed up and in need of reform. Barack Obama had proposals for addressing these issues before the interest in a stimulus bill came around. As it happens, I think he had some pretty good ideas. And ultimately this is where the real action is going to be—not in terms of what is and isn’t in the stimulus package, but what kinds of enduring reforms does his administration bring about. For example, the stimulus proposal currently offers $30 billion for roads and $10 billion for rail and transit. That’s not the ratio of my dreams, but it’s a much better ratio than is reflected in current spending priorities. And those current priorities are entrenched in the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) a.k.a. “the highway bill” in a manner that reflects its disproportionate emphasis on highways. It’s a law that’s set for renewal and rewriting in 2009.
In the short-run—i.e., in the stimulus time frame—there’s only so much change of priorities that it’s feasible to do. But in the longer run, priorities can be shifted much more dramatically. This is a very big deal and in some ways where the real action will be in terms of whether or not we see a national shift in priorities.
39 Responses to “Transportation Infrastructure in the Stimulus”
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January 15th, 2009 at 1:43 pm
$30 billion for roads and $10 billion for rail and transit. That’s not the ratio of my dreams, but it’s a much better ratio than is reflected in current spending priorities.
I don’t know that I’d really call this an improvement. It’s like being in dept with an income of $1,000 per month, and decreasing your spending from $5,000/mo to $3,000/mo. It’s better to be spending only $3,000/mo, but still, every month that goes by, you find yourself more in debt than you were before.
January 15th, 2009 at 1:45 pm
I get your points, Matt, and I agree with most of them. So, setting aside projects that may not be “shovel-ready” (God I’m sick of that phrase already), my major complaint is that they come right out in the detailed summary and state that there are “787 ready-to-go transit projects totaling $15.5 billion.” And yet, they’re only providing $7.1 bn in funding in total for all public transit and rail projects. If you consider some or all of the “maintenance backlogs” for both, that’s another $13.2 bn. That’s $28.7 bn in ready-to-go projects and much-needed maintenance. That’s a $21.6 bn dollar shortfall.
Granted, there’s a shortfall in the proposed highway funding, but it’s on the scale of a 50% shortfall, not a 75% shortfall. Or should I say “short end of the stick”?
January 15th, 2009 at 2:01 pm
Seems to me the question to ask is just this: how much of the aid to cities and states is going to local infrastructure?
That is to say: is this federal infrastructure only? And, if so, then the $85B figure isn’t accurate as a measure of total infrastructure spending.
January 15th, 2009 at 2:14 pm
MattY’s underpants gnome take on infrastructure stimulus:
1) I don’t know any specifics of the appropriations, workforce or infrastructure feasibility.
2) ???
3) You shouldn’t be concerned.
January 15th, 2009 at 2:28 pm
Emphasis added. This is ridiculous. I understand that we are going to build some roads, but can we please abandon the idea that building those roads will get anyone to work faster? The last generation of highway building didn’t accomplish this goal and the current generation won’t either. Build the damn trains and price the damn roads!
January 15th, 2009 at 2:29 pm
Even if Obama did earmark the “$1.6 trillion the ASCE thinks we need to spend,” it can’t be all used at once. There aren’t massive armies of surveyors, civil engineers, concrete workers, rail workers, and laborers just sitting around ready to go do $1.6 trillion of work. The point of the stimulus is to create revenue and jobs now, not finance a “keep em busy” policy for the next 25 years.
January 15th, 2009 at 2:40 pm
MattY’s underpants gnome take on infrastructure stimulus
Yeah, this post is shockingly fact-free.
It could be that maybe construction materials got cheap all of the sudden. Or maybe the project managers used invisible ink when they wrote their budget requests, but the government forgot to hold it up to a lamp. Or maybe Obama’s the secret love child of Malcolm X. I mean, I’ve got nothing back any of this shit up but NRO CAP/AF doesn’t pay me to do research, so maybe my readers could crunch some numbers for me?
January 15th, 2009 at 2:44 pm
http://www.boston.com/news/politics/2008/articles/2008/12/10/patrick_seeks_federal_aid_for_state/
Deval Patrick, Governor of Massachusetts and one of the first to whisper in PEBOs ear about aid to cities and states, has long been talking about using federal funds received for local infrastructure (among other things). So Sirota ought not to fret at the $85B number…
I would think the $85B is to be specifically tailored to federal (read: interstate) infrastructure. Perhaps a new electrical grid? (which I understand is in that range…)
January 15th, 2009 at 2:44 pm
Stimulus: Short term.
Transit infrastructure revolution: long term.
Obama doesn’t need to get the supertrains, metropolitan transit, and freight train revolution passed in his first month. He needs the short-term stimulus (intended to stimulate the economy right now) passed. Later on, the transportation secretary and Congress can get a much more rail intensive bill passed that shifts priorities, and he can get some sort of 10 year infrastructure bill passed as well.
For comparison, President Ike got the National Interstate and Defense Highways Act passed in 1956. It had a timespan of 20 years when it was passed. Although “the initial cost estimate for the system was $25 billion over 12 years; it ended up costing $114 billion (adjusted for inflation, $425 billion in 2006 dollars) and taking 35 years to complete.” (per wiki).
So that kind of thing is not a stimulus. Instead, it will be one of the biggest public works projects ever undertaken in the United States, and will likely come in year 2 or later of the administration.
January 15th, 2009 at 2:53 pm
agorabum,
Matt seems to know that. He has even posted about it before. But when it comes to health care and mass transit, stimulus is the perfect guise to pass long term progressive proposals. Such is the New New Deal.
January 15th, 2009 at 3:39 pm
Ok, yes. But there are crazy exceptions that could and should get some $ now.
I’ll give you a category: existing, functional rail lines that only get freight service and could provide passenger transportation.
the In My Back Yard (IBY) example: My town is on the rail line that goes from Portland, Maine to Montreal. We’ve even got a train station; though it’s not used as such, and Department of Transportation helped pay for it. Nice airport and boat terminals in Portland. Small airport here. And the entire trip takes you through the White Mountains and Maine’s ski country. Portland also connects you to Boston. And while there is the potential for conflict with trains carrying hazard chemicals, the track are only used a few times a day for that purpose. Mostly, they’re empty. Surely there can be a merger of uses now? Or is a rail that carry’s hazardous loads not up to carrying people, too?
January 15th, 2009 at 3:56 pm
Only $10 billion for rail and transit is a joke coming from a crowd that’s always talking about “green” policies.
January 15th, 2009 at 4:13 pm
One thing I’ve noticed missing from the discussion of massive stimulus is discussion of material shortages in pricing in things like concrete, steel (for reinforcement and guardrails, etc.), and aluminum and copper (for wire and connectors). If it all happens too soon, shortages will make prices go through the roof. What Obama is proposing seems less inflationary, although it’s still a risk. They’re going to have to still keep an eye on the bond markets, lest public entities (like public hospitals or the City of Portland) have to pay too high a rate to provide their own part in the stimulus. Seems as though a broad short-term stimulus addresses that better than a huge concentration of one kind of stimulus. I’d love to see the investment in long-haul train electrification be included, but because of things like material issues, it’s better to be thought out as a longer-term investment on its own merits. Short-term investments in a wide array of areas makes more sense to me the longer I think about it.
January 15th, 2009 at 4:13 pm
Perhaps a new electrical grid?
There is $11 billion allocated for upgrading and repairing the grid. Had a long comment composed on the matter until the off-topicness of it started bothering me. At any rate, before people start plugging in their automobiles, the National power grid is in need of some serious love. I’m happy and relieved to see this finally being taken seriously by a Federal body.
January 15th, 2009 at 4:36 pm
You’re a funny guy, Matt:
“Many items of backlog lists would, in fact, need to go through years worth of environmental review and so forth before you could actually build them.”
Just a month or so ago, you were lamenting how much infrastructure China is building, and how fast they’re building it. Well, which do want: rapid build out, or the current ponderous system that takes 50+ years to build a water pipe for NYC, and over 20 years for “The Big Dig” in Boston?
January 15th, 2009 at 4:41 pm
This isn’t the transportation omnibus bill. The 3:1 ration of road:rail isn’t great. But this is the stimulus bill, and state’s are shutting down long-planned road projects because of the lack of money. The stimulus will naturally fund things that have already been put in place (since it’s short term). Looking at the stimulus overall, transportation in general is just 5% of the stimulus bill.
But I’d like to compare the 3:1 ratio to the last transportation bill. I’d bet it is something like 10:1.
January 15th, 2009 at 7:17 pm
I disagree. The country’s existing urban light/commuter rail systems either operating or under construction could easily suck up more than 10 billion.
Also, I think we should build rail on an emergency basis, with waivers of environmental review. Yes, I mean that. If it sounds extreme, let’s see how the economy handles 10-12 dollar gasoline in 2012.
Gregor
January 15th, 2009 at 7:45 pm
So, like I’ve been saying all along, exciting transit infrastructure projects have proven to be largely incompatible with the notion of “stimulus.” Most of the stimulus spending is going toward bailing out state and local governments, spending which I’ve long suggested be renamed “human infrastructure” to make it sound sexier and obscure the fact that Obama’s whole “infrastructure stimulus” idea has turned out to be largely a flop.
January 15th, 2009 at 7:52 pm
Matt notes: ““Many items of backlog lists would, in fact, need to go through years worth of environmental review and so forth before you could actually build them.””
Now that progressives have gotten a bitter taste of the problems caused by environmental regulation, it’s time for the Obama administration to call for a major review of how those regulations can be made less onerous and time-consuming. Don’t junk environmentalism, but make it more efficient. Mend it, don’t end it!
This review should extend to export industries. We desperately need ways to stimulate exports to pay for our enormous imports from China and oil producers. We should look at ways to make our exporters more globally competitive by reducing upon them the burdens imposed by environmental, affirmative action, and disability regulations. You can keep forcing domestic industries to subsidize lots of politically favored groups, but let’s not restrict exporters to the same degree.
January 15th, 2009 at 8:10 pm
Also, to make our export industries more competitive with the rest of the world’s exporters, we should probably lift the American ban on American firms bribing overseas customers, which goes back to when the prime minister of Japan shook down Lockheed for a kickback on aircraft purchases, and the U.S. Congress went into a tizzy about how evil Lockheed was. Let the foreigners police themselves. If they want to arrest American salesmen who are paying kickbacks to get contracts, good for them. But why is it our duty to police business transactions in other countries? We didn’t arrest the Japanese prime minister for demanding a bribe.
January 15th, 2009 at 8:12 pm
Excellent post, Matt. Exactly my thoughts. I’ve wondered what does “ready to go” actually mean? If something is ready to go, it usually means its already paid for.
In this case, ready to go seems to mean almost ready to go. I could see bike lanes and paths that might be able to make things happen quickly. But creating light rail and bus rapid transit lines is a multi-year process.
January 15th, 2009 at 8:22 pm
Hey, that’s my train! I take the Blue line from Goose Hollow to Sunset Transit Center every morning (yes, I can take the Red line running on the same track, also. Soon (this year), we’ll have the Green line going to Clackamas, and the WES train, running along the 217 corridor. You guys could learn a lot from Portland. Can we get some of that money?
January 15th, 2009 at 8:30 pm
“You guys could learn a lot from Portland.”
It’s remarkable how all the Stuff White People Like, such as trolleys and bike lanes, work better in a town full of white people like Portland than in a huge city full of non-SWPLs like Los Angeles.
Who woulda thunk it?
January 16th, 2009 at 10:34 am
Well, looks like the fiasco was realized in the spending plans on transport, in the stimulus bill.
G
January 19th, 2009 at 2:40 pm
OK, Steve, I’ll tell all the non-white people in the train this afternoon about how this whole transit thing isn’t really their thing, and they should just get back in their ‘79 LeSabre with the broken tailpipe because that’s so much better for them.
January 20th, 2009 at 4:58 pm
The point that there’s not enough shovel ready transit projects or not good enough projects is outright ridiculous in the face of the fact that the FTA has already approved funding for $14 billion in projects that pass its own standard for “genuinely useful”.
There’s no truth whatsoever to that argument, it’s an outright lie, and you shouldn’t be repeating it.
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