Harry Moroz
The Right Stimulus Debate
Despite signs that the job market is getting worse less quickly, Republicans like House Majority Whip Eric Cantor used May's 9.4% unemployment rate to proclaim that the economic stimulus package "is not a success story". In response, President Obama announced that he would "ramp up" stimulus spending over the summer to create or save 600,000 jobs before the kids return to school. This response was perplexing: one hopes that the President wasn't just saving those jobs for a rainy day.
The anti-stimulus machine continued to pick up steam this week with the release of Senator Tom Coburn's "Second Opinion", a cursory look at 100 "inappropriate" stimulus projects that rivaled the Vice President's "100 Days 100 Projects" stimulus report in its absence of any empirical data proving or disproving the stimulus's success or failure.
While the Senator's introduction is a reasonable, if tired, explanation of the federal government's inability to spend stimulus funds efficiently, the report itself is filled with nonsense. Criticism of a Florida "eco-passage" includes the sophisticated gem: "Why did the turtle cross the road? To get to the other side of a stimulus project." And a description of Social Security checks mistakenly sent to deceased individuals provides a screenshot from the 1999 Bruce Willis hit The Sixth Sense with the caption "I see stimulus checks..."
Within a day, the White House had responded to Coburn's report, stimulus project by stimulus project, noting that some projects are still "under review" and that some of the Oklahoma Senator's claims are demonstrably false (the Knapp Haven Nursing Home really did want that stimulus money that Coburn said it didn't want).
At some level, this back-and-forth about individual projects is useful to figure out exactly how taxpayer dollars are being spent. (That said, some criticism, like the renovation of the Elizabethtown train station, is too shallow, as the administration notes, to be productive.)
The real issue in this debate, though, should be figuring out how the President's promised 600,000 jobs for this summer, 3.5 million by 2010, and 6.8 million by 2012 can actually be created or saved. Indeed, if there are levers the President can pull to hasten the speed at which stimulus funds are expended, he must pull them. But the administration has still not recognized - and is even turning its back on - the critical piece of the stimulus puzzle: cities.
Much of the stimulus funds will ultimately be spent in the nation's urban areas. The Brookings Institution notes that around 43% of total stimulus appropriations will be invested in metropolitan areas. Investments in public transit, high-speed rail, and other critical infrastructure were made with urban areas in mind. But this investment is proving insufficient, in part because the Obama administration has not partnered with cities to make the stimulus work.
The U.S. Conference of Mayors reports that 85% of job losses during the recession will occur in metro areas and 83% of currently unemployed workers reside in metros. But at the same time, 94% of the nation's economic growth in the next 20 years will come from metros. The Conference is rightly concerned, given these and other statistics, that the stimulus funds spent in cities thus far are not being funneled to cities and metropolitan planning organizations, but are instead being siphoned off by greedy state legislatures: the 85 most populated metros have received 48.3% of funds for stimulus infrastructure projects, but "comprise 63% of the national population, and 73% of the Gross Domestic Product." Thus, in most medium-to-big cities, stimulus money is disproportionately low for their population and economic activity.
To make the stimulus package work, the Obama administration must refocus the stimulus package toward urban and metro areas. To do this, the administration must beef up its stillborn White House Office of Urban Affairs, which is best positioned to facilitate interaction between federal officials and the mayors and state and local officials who will ultimately spend the money.
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Posted at 9:38 AM, Jun 19, 2009 in
Stimulus
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