fb pixel

Log In

Reset Password

Obama's stimulus spending hits roadblocks

WASHINGTON — In February, when Congress approved President Barack Obama's plan to stimulate the economy, transportation projects were supposed to be among the fastest-acting pieces of the $787 billion package.

All 50 states moved quickly to qualify for their share. But since then the pace has slowed considerably, particularly in California and Florida, where the economic crisis has been especially severe.

More than 3,600 of the 5,600 road projects approved by the federal government — including six of the 10 largest approved projects — by July 10 had not been given the green light to start construction.

The reasons are many. One is the time needed to get heavy equipment and crews ready for jobs. Also, overburdened state officials have had some trouble sustaining early momentum.

Even where projects have begun, they haven't always brought with them as big a burst of hiring as expected.

In Louisiana, engineer Kevin Charrier is leading construction of a $33 million, 160-foot-long bridge across Bayou Lafourche to replace a pontoon bridge long considered unsafe.

"It's definitely a blessing," he said. "We're using the hardware store in the community. We're buying ice from the local icehouse."

Yet Charrier hasn't yet hired any new people. Rather, he has brought on an initial crew of about a dozen veterans from another job nearby, and is paying them overtime.

"If we have people who have experience, we would rather work them overtime," he said, "not that we don't want to train or hire new people."

The U.S. Department of Transportation estimates that stimulus-funded highway projects directly saved or created as many as 6,000 jobs through May, the latest month for which the department had data.

Federal and state officials said they expected the pace of construction — and hiring — to pick up substantially in coming months. If it doesn't, that will only sharpen criticism that says Obama's economic stimulus package isn't working.

The allocation for transportation projects is a tiny part of the stimulus bill's overall spending, but it's one of the most powerful in terms of potential economic impact per dollar. The White House calculates that every $1 billion spent on highway work will create 11,000 jobs, directly or indirectly. Private estimates are as high as 35,000 jobs per $1 billion.

And the progress of highway projects is seen as a symbolic measure of whether Obama's Recovery Act is succeeding.

Larry Summers, the president's top economic adviser, said the program shouldn't be judged by short-term results.

"Given lags in spending and hiring," he said Friday, "the peak impact of the stimulus on jobs is expected not to be achieved until the end of 2010."

Contractors, especially in northern states, worry that if things don't move faster, they'll have to wait until spring because of the onset of cold weather. For some, it's already too late.

June 12, Vice President Joe Biden went to Michigan for a groundbreaking ceremony of a $43 million project to rebuild part of Interstate 94.

"We are quite literally repaving the road to recovery right here in Kalamazoo," he was quoted as saying, with an unemployed construction worker near his side.

But construction won't really get going until April. Jeff Stover, a project manager at Walter Toebe Construction, says he has to wait until 5 million pounds of steel is delivered.

"It has been a little frustrating," he said. "We would have liked to get right into this job, but ... the schedule didn't allow it."

In many other cases, contractors are waiting for officials to put approved works up for bid. States typically advertise projects for three weeks, and then it's two more weeks before the winning bid is selected.

May 1, the Recovery Act's single largest highway project was awarded to California — $192 million to build a two-lane tunnel on state Highway 24 in Oakland. The California Department of Transportation has been advertising for bids since May 18.

"This is a very complex and detailed project," spokesman Benjamin Delanty said.

California, which has implemented involuntary furloughs for public employees, isn't the only state cutting back on hours and jobs, indirectly reducing the ability to move quickly on stimulus projects.

"Just at a time when you need more people familiar with getting contracts out and when you need to put designs in the pipeline, those personnel are missing," said Ken Simonson, chief economist at the Associated General Contractors of America in Arlington, Va.

In Florida, not a single highway project had been given the go-ahead by July 10 to start construction — even though the state, with an unemployment rate of 10.6 percent, had 272 projects valued at more than $1 billion approved by the federal government.

Dave Lee, the administrator in the policy office of Florida's Department of Transportation, said four projects were approved after July 10.

Florida was one of the earliest states to submit highway projects for funding under the Recovery Act. Asked what happened after that, Lee paused before saying, "We're all trying to do the best we can."