Officials eye stimulus package

Proposed cash infusion draws hope, skepticism

By Leslie Jorgensen
THE COLORADO STATESMAN

COLORADO SPRINGS — House Speaker Nancy Pelosi and Senate President Harry Reid unveiled plans for a $400 billion to $500 billion stimulus package for the states. The same day, the National Bureau of Economic Research said that the United States has been in a recession since December 2007.


Photo by Tatianna Gruen/The Colorado Statesman

Sen. Ken Salazar

“It’s a big commitment to invest in infrastructure needs,” said U.S. Sen. Ken Salazar. “Bridges, roads, wastewater-treatment plants and a host of projects are ready to move.”

“There’s one reality… I don’t know if this going to be a $50 billion infrastructure investment or whether it’s going to be as high as over $1 trillion — take a breath — maybe $2 trillion.”

The 300 or so county commissioners at the Colorado Counties Inc. Winter Conference luncheon in Colorado Springs had loudly applauded the concept of infrastructure improvements — but were stunned silent by the price tag.

The package is part of President-elect Barack Obama’s campaign pledge to create or maintain at least 2.5 million jobs over the next two years through federally funded programs to develop energy independence and to construct and repair roads, bridges, schools and airports.

“It’s going to be a major inoculation into the infrastructure,” said Salazar. “Whether you agree with that or not — as an economic philosophy or as a shot that we need — I want us to be ready to move forward with that kind of economic infusion. I don’t want to have Colorado left behind.”

“Can you make sure the stimulus package comes to the rural counties?” asked Douglas County Commissioner Melanie Worley.

“Not at this time,” said Salazar, who suggested she speak instead to Gov. Bill Ritter, who is working closely with the counties and municipalities to assess their infrastructure needs and project readiness.

Details — such as criteria for projects and allotments to states — are yet to come.

These will be influenced by congressional delegations from each state, Salazar said. Their input will be based on the ideas and concerns conveyed by the county commissioners and other municipal and state office-holders.

U.S. Rep. Ed Perlmutter, a Democrat representing Colorado’s 7th Congressional District, suggested the stimulus money be used to fund both state and federal infrastructure projects for roads, energy development and water investments.

Perlmutter said that although Congress will offer guidelines, the states also should have some latitude in the choice of projects, provided they remain within the boundaries set out by Congress.

Democrats hope to pass the bill in early January with Republican support — which may prove difficult to find. After all, GOP members of Congress who voted against the original $700 billion bailout for the financial industry have little incentive to support a new stimulus package.

Although, noted El Paso County Commissioner Wayne Williams, “This might be an easier sell because it has a long-term benefit.”

“Investing in long-term infrastructure projects — an area in which the nation has fallen short — makes more sense than spending money on bailouts for particular businesses,” Williams said. “Why should we reward the three automakers? Why should they get a special deal that other people don’t get?”

Salazar recalled that Treasury Secretary Henry Paulson and Ben Bernanke, chairman of the Federal Reserve Board, had appeared several times before the Senate Finance Committee and repeatedly declared that the economy was strong.

After the Wall Street crash in late September, Salazar was appalled when Paulson asked for $700 billion to bail out financial institutions.

“Now you’re saying the sky is falling in?” Salazar had quizzed Paulson, and Paulson had responded that “the problem is so severe that we need an economic rescue package.”

Salazar, a self-described “pay as you go” kind of guy, was not pleased.

The U.S. senator believes a stimulus package for the states is less risky.

“Doing nothing is not an option,” said Salazar. “We have to restore economic stability here and around the world.”

In Philadelphia, Ritter was learning more about the stimulus package at the National Governors Association conference as both Obama and Pelosi addressed the group.

“To solve this crisis and to ease the burden on our states, we’re going to need action, and we’re going to need action swiftly,” Obama told the governors assembled in Philadelphia’s historic Congress Hall. “That means passing an economic recovery plan that helps both Wall Street and Main Street. And this administration does not intend to delay in getting you the help that we need.”

According to the NGA, more than 40 states are grappling with budget shortfalls that total $30 billion — an amount that may triple in 2010.

The governors hope to receive at least $136 billion for infrastructure projects that are already listed and can be initiated rapidly, with an added $40 billion to cover increased Medicaid costs.

One of the national lists for infrastructure projects is published by the American Association of State Highway and Transportation Officials. According to that report, more than 3,000 highway projects with costs estimated at $18 billion would be ready to begin within 90 days of the stimulus bill’s passage.

“If additional federal transportation funding is provided to the states through a stimulus bill, it will accelerate the creation of construction jobs within 30 to 90 days, because we have projects that are ready to go now and awaiting funding,” said Pete K. Rahn, president of AASHTO, in a press statement.

Perlmutter said once criteria for spending are established, work can begin within 90 days on projects whose plans have been approved.

“The whole purpose of the stimulus is to spur job growth,” he said.

If Congress approves the stimulus package, Colorado has “160 highway, bridge and airport projects that total between $1.2 and $1.4 billion,” said Evan Dreyer, Ritter’s communication director. “Those projects are ready to go within 180 days.”

In addition to the state’s major transportation projects, Dreyer said, are such maintenance tasks as filling potholes, snowplowing state roads and repairing bridges.

These projects were put on hold because of reduced funding. Ritter’s proposed 2009 budget recommended cutting a third of the transportation budget, bringing it down to $873 million.

Pelosi said the stimulus package also will fund development of alternative and renewable energy.

Dreyer said Colorado’s projects will include developing more alternative energy — such as wind and solar — and constructing an oil pipeline to enable more production and better valuation.

“Colorado has plenty of oil, but we don’t have an adequate pipeline to move it to the market,” said Dreyer.

Dreyer noted that economists have said 40,000 jobs are created for every billion dollars spent.

Back at the CCI conference in Colorado Springs, Arapahoe County Commissioner Rod Bockenfeld wondered whether it would be possible to “spend your way back to prosperity.”

“Where does the money come from?” he asked. “It doesn’t fall out of the sky.”

“The voters that I’m talking to in my district, are starting to get disgusted when they turn on the TV every night and hear the government has thrown $5 trillion here, $3 trillion there,” said Bockenfeld.

“Where does this end?” he asked.

Dreyer said Bockenfeld has a point. “It is a question we need to ask. Do we do more good or do we do more harm? It would do more good to invest directly into the economy.”

Salazar compared the debt of a stimulus package to that created by the war in Iraq.

“America has paid for a $2 trillion to $3 trillion war on a credit card,” said Salazar, adding that since President George W. Bush assumed the office in 2001, there has been a “$650 billion deficit on average a year.”

Crowley County Commissioner Matt Heimrich said the stimulus package cost means “we’ll just print more money.”

“I’m actually more concerned about the average American having to pay a higher tax bill so some guy can have four retirement homes because he got a severance package of $80 million to leave Exxon,” said Heimrich.

In the congressional delegation offices, the stimulus package has generated barely a constituent peep compared to the onslaught of comments over the bailout of the Big 3 automakers and the $700 billion Wall Street rescue.

The office of 5th Congressional District Rep. Doug Lamborn, however, has asked constituents to weigh in. Last week, the office sent a survey to 60,000 constituents, asking their opinion of a federal bailout for Colorado — and found that 88 percent opposed the idea.

“I question the wisdom and logic of burdening federal taxpayers to bail out state taxpayers,” said Lamborn. “Having served 12 years in the Colorado State Legislature, I am well aware of the financial constraints Colorado lawmakers are facing.

“While there may be some merit to some state infrastructure projects, I have consistently opposed the bailout mentality and favor more free-market solutions to our country’s financial challenges,” said Lamborn.