The House passed the $819 billion stimulus last night. The final version contains some amendments that affect the (tiny) infrastructure-investment part of the bill.
Two amendments are good, though not good enough to outweigh the fact that only five percent of the entire bill goes toward infrastructure.
One is bad.
The Good (sort of):
1. New York’s Jerrold Nadler got transit funding increased by a third, from $9 billion to $12 billion, with $1.5 billion more to go specifically to new projects.
Since the bill was supposed to be about infrastructure, it’s nice to see that someone is interested in actually spending a little money on infrastructure. And it’s good to see Congress encouraging states to do new projects rather than just fill in some old maintenance work.
Refreshingly, Florida’s John Mica, a Republican, stuck up for rational investment in physical infrastructure, when most Republicans have been too quiet on the bill’s failure here. Mica called it “most offensive” that the allocation to infrastructure was so low.
(Of course, the fact that lots of Congressmen from all over the country spoke up for this amendment likely means that each of him wants his piece of the new allocation, so the funds will be spread thinly.)
2. Pennsylvania’s Bill Shuster changed the bill so that states won’t be able to use their highway-maintenance stimulus funds to replace existing funds for such work.
According to the new text , “If a Governor is unable to certify that Federal funds will not supplant non-Federal funds …, then the Federal funds apportioned to that State under this Act that will supplant non-Federal funds will be recaptured by the appropriate Federal agency and redistributed to States or agencies that can spend the Federal funds without supplanting non-Federal funds.”
One issue: since most states haven’t yet enacted their budgets for next year, it will be hard to figure out which spending cuts states would have made anyway and which cuts came because the states were expecting federal money to replace the funding.
Still, this goal is worthy and is the only real gesture to encourage states to increase their care of existing infrastructure.
3. The House approved a provision from Minnesota’s James Oberstar that gives state or local planners on highways, transit, and aviation just 90 days, instead of 120 days or 180 days, to initiate the spending of half their money from the feds or “lose it.”
Rep. Oberstar said that California’s transportation director, Will Kempton, had told him that “we have well over 100,000 building trades craftsmen out of work. We are getting eight to nine bids per contract, and they are coming in at 25 percent below engineering estimates. … The contractors are ready.”
The problem here is that encouraging states and cities to spend money as quickly as possible won’t result in the best long-term projects being built. This provision makes that situation worse.
Plus, contractors who now know that states are under the gun to spend this money as fast as possible will have more leverage than they do now in the bidding process.