No such thing as shovel-ready projects

On September 27th the President told Peter Baker of The New York Times:

He realized too late that “there’s no such thing as shovel-ready projects” when it comes to public works.

Yet just three weeks earlier, in a speech to the LaborFest in Milwaukee, the President said:

So, that’s why, Milwaukee, today, I am announcing a new plan for rebuilding and modernizing America’s roads and rails and runways for the long term.

… But the bottom line is this, Milwaukee — this will not only create jobs immediately, it’s also going to make our economy hum over the long haul.

Q1 for Team Obama: If there’s no such thing as shovel-ready projects, how will the $50 B of new infrastructure spending create jobs immediately?

Q2: If shovel-ready projects do exist and are queued up to create jobs immediately, shouldn’t they have been funded already by the stimulus law enacted in early 2009, leaving only the slower-spending projects left to be funded with the new money?

Q3: Given the President’s admission, isn’t the President’s proposal simply a deficit-financed increase in government spending with no immediate macroeconomic benefit?

Election season should not excuse the Administration from justifying its proposals as sound policy.

(photo credit: Office of Governor Patrick)

4 thoughts on “No such thing as shovel-ready projects

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  3. Marty

    Anyone who knows much about federal infrastructure funding (really, FHWA, FTA and FAA) knew there cannot be a host of "shovel-ready" projects… the funding process doesn't permit that to happen.

    Obama's problem, compounded by arrogance, was in finding honest advice, if he chose to look for it. Most experts in such things work for State DOTs, local transit agencies, the federal agencies, or the consulting and construction firms that live off the program–none of THEM would have an incentive to tell the truth.

    One area where it might have been possible to goose things was military construction, controlled directly by DoD… Martin Feldstein originally backed ARRA but changed his mind when he learned military construction would NOT be included, iirc.

    Corps of Engineers stuff is also directly Federally controlled, but involves environmental issues and does not lend itself to quick action.

  4. Grant Langdon

    The president was wrong – there ARE lots of shovel ready (or almost ready) projects out here, but the real problem is that the federal government's highway funding and approval process takes years to approve projects, as well as doubling the cost.

    Most communities have transportation plans specifying which projects they need done. In some cases construction drawing are done, but even where they are not a simple $5 to $10 million highway project can be engineered within a month or two. On the other hand, meeting the federal requirements for design review, impact statements and public hearings can be expected to add at least 18 months to 2 years to the approval process.

    If Obama were serious about funding infrastructure now, and getting decent value for the public's money, all he would need to do is to dole out the highway funds to the states in block grants with certain criteria for what the money can be spent on and just enough oversight to ensure that the criteria were. The states and local communities have a far better idea of what they need than does the federal government, and while there would be some waste it would be far less that the extravagant waste that is now the rule on federally funded highways projects.

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