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Obama's Transportation Stimulus II: Same Old, Same Old

Samuel Staley
September 13, 2011, 9:44pm

President Obama's next round of Stimulus, approaching $500 billion, includes a dose of transportation funding as well. Unfortunately, it's really packaing "old wine in a new bottle" according to C. Kenneth Orski in his Innovation Briefs newsletter (Vol. 22, No. 26). He writes:

"The rhetoric may have changed --- Obama avoided using the terms "stimulus" and "infrastructure" in presenting his AJA [American Jobs Act] initiative to Congress---but the substance of the two initiatives [AJA and the 2012 proposed budget] is remarkably similar. Both proposals would fund an identical mix of programs (highways, transit, Amtrak, high-speed rail, aviation and the TIFIA credit program) and both would establish a  National Infrastructure Bank.

"The FY 2012 transportation budget request failed to obtain congressional approval for two reasons: (1) the Administration failed to show how the proposed $50 billion program would be paid for; and (2) there was no convincing evidence that the program would promptly create new jobs. Indeed, all evidence pointed in the opposite direction. The $48 billion in Recovery Act funds for transportation had failed to create the millions of jobs promised by the Administration. The money earmarked for highways had been spent largely on short term roadway maintenance-type contracts and had produced only temporary jobs.  Nor was there much to show for in terms of an improved condition or performance of the nation's transportation system.  As for the Infrastructure Bank, it is widely believed that at least one or two years could pass before the Bank would become operational  and in a position to begin financing  large-scale job-creating infrastructure projects."

In short, the new package simply repackages the same programs that failed to stimulate the economy in the first round (or two or three). For more on Reason Foundation's analysis of the Stimulus, check out our work here.


Samuel Staley is Research Fellow


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