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Why Stimulus Failed

October 5, 2010

By Rep. John L. Mica (R-Fla.)

The Hill

By any objective evaluation, the Democrat-led stimulus bill passed 19 months ago has dramatically failed to turn around our economy.

Unfortunately, the initial modest stimulus proposals that were primarily focused on infrastructure and incentivizing private sector job creation ballooned into a three-quarters-of-a-trillion-dollar spending behemoth. In doing so, Democrats managed to only slightly impact the national unemployment rate — mostly temporarily propping up government employment — and sent the national debt soaring.

Democrats missed the mark when it comes to spurring private-sector employment and providing incentives for the expansion of business and industry. They set themselves up for failure.

The final stimulus bill directed less than 7 percent of the massive spending measure toward infrastructure and included no means of expediting even that miniscule portion of the package.

Can you imagine what could have happened if the Democrats had chosen to devote half of the stimulus to infrastructure and eliminate the red tape that habitually holds up projects? By cutting through the bureaucracy, we were able to rebuild the I-35W bridge in Minneapolis-St. Paul in less than 437 days. If we had similarly expedited the process for all of our stimulus projects, we would have already created millions of new jobs.

Even based on conservative estimates that every one billion dollars invested in infrastructure supports 27,500 jobs, by this time there would have been more than 11 million employed in the hard-hit construction industry. Unemployment lines would be dramatically shorter, and many more Americans would be able to pay their mortgages and taxes.

But heaven forbid Congress would make decisions that would put people to work.

Heaven forbid Congress would incentivize small business, establish benefits for investment and support positive opportunity for private sector job expansion.

Heaven forbid Congress would provide carrots for manufacturing and industry to stay and expand in the United States rather than use sticks, penalties and mandates that drive jobs overseas.

The Obama administration’s decision to kill any hope of a six-year transportation reauthorization was another badly missed opportunity for Democrats and our country. The previous authorization expired at the end of FY 2009, and days before the House was scheduled to act on a six-year reauthorization, the administration announced it would only support an 18-month extension of existing programs.

Had Congress passed a multi-year measure, millions could be working on long-term infrastructure jobs and helping rebuild our crumbling highways, bridges and transportation network.

Doing so would have prevented states from canceling major projects because of funding uncertainty, helped eliminate the need for more unemployment benefits and helped eliminate the need for mortgage bailouts.

Instead, Congress opted for temporary special-interest fixes that now require further renewal and costly bailouts.

Without a long-term federal commitment, state departments of transportation are limited to smaller short-term projects that often provide briefer employment opportunities. That’s why under the so-called stimulus, we’ve seen primarily minor and limited infrastructure projects, such as sidewalks, bike paths and repaving. According to the Government Accountability Office, more than 63 percent of the highway stimulus funds were spent on pavement improvements, and less than 10 percent are being spent on new road or bridge construction.

The major projects and the employment they would create have been put on hold.

Making matters worse, Democrats have undertaken an unprecedented federal spending binge.

Between the nearly trillion-dollar stimulus, an array of costly bailouts and two years of budget deficits approaching $3 trillion, more than $4 trillion has been quickly added to the national debt.

If misdirected stimulus, failure to reauthorize transportation programs and monstrous deficit spending were not enough, the uncertainty regarding the extension of tax cuts continues to wreak havoc with many Americans’ plans to invest, expand businesses or even retire.

The administration’s latest $50 billion stimulus infrastructure proposal, offered with no details, only adds insult to injury. With only 39 percent of the $63 billion for infrastructure in the original stimulus bill spent, after hearing about this latest proposal in the news I had to ask, “What planet are these people living on?”

Additional reports that the administration does not plan to introduce its ideas for a long-term transportation reauthorization until next year only confirm the latest $50 billion tax and spend proposal was only political smoke and mirrors.

It’s not working. The public is not fooled, and even some Democrats opposed this most recent proposal.

Despite these criticisms, I am still prepared, willing and anxious to join with anyone and everyone, in Congress or the administration, to develop a reasoned, effective means to get America working again and build our nation’s infrastructure.

Rep. Mica is the ranking Republican on the Committee on Transportation and Infrastructure
 

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