Oberstar looks to job-creating infrastructure projects

  • Article by: MITCH ANDERSON , Star Tribune
  • Updated: October 29, 2008 - 8:28 PM

Congress is considering giving the economy some get up-and-go with increased transportation spending next year.

WASHINGTON - Days before Tuesday's elections, Democrats in Congress are signaling that they will try to jump-start the nation's economy next year through an ambitious program of job-creating public investment in transportation and infrastructure.

Setting the stage is Minnesota Democrat Jim Oberstar, chairman of the House Transportation and Infrastructure Committee, which held one of two hearings Wednesday on economic stimulus plans that the new Congress might take up in January.

Oberstar's hearing also came just as federal investigators are expected to release their final report on the Interstate 35W bridge collapse, which became a symbol of the nation's infrastructure problems.

"These infrastructure investments [not only] put construction workers back on their jobs, but they also improve our deteriorating infrastructure," Oberstar told the panel. "The level of investment we're doing today, we're falling further and further behind."

The transportation panel's hearing -- combined with a similar one by the House Ways and Means Committee -- appears to be part of a bipartisan move to address the stagnant economy and rising joblessness that have become a major campaign issue.

Congress still plans to return for a lame-duck session to consider an economic stimulus package after the elections. By some accounts, it would include spending on infrastructure, food stamps, extended unemployment benefits and aid to state governments struggling to avoid cuts in Medicaid coverage. But some analysts say that any major initiative will likely be put off until the new Congress convenes in January.

Earlier stimulus bill stalled

Last month, the House passed a $60 billion stimulus package, half of which was for transportation and infrastructure projects. It offered $12.8 billion to the states, including $208 million for Minnesota. But the measure stalled in the Senate when President Bush indicated he would veto it.

House Speaker Nancy Pelosi, D-Calif., now wants to more than double the spending to as much as $150 billion.

While there is bipartisan support for long-term investments in public infrastructure, the debate has turned on how much and where. Some critics have also raised questions about where the new transportation dollars will come from and how far they would go to help the economy overall.

"Every dollar government spends needs to be taxed or borrowed out of another sector that is going to lose an equal number of jobs," said Brian Riedl, a policy analyst with the Heritage Foundation. "It's shifting jobs from one part of the economy to the other."

Riedl and others also question the lag time between the passage of any transportation spending bills and the jobs that could result.

However, John Irons of the Economic Policy Institute said the investment is still worthwhile because job losses can last well after the country has recovered from a recession.

Oberstar spokesman John Schadl said that elements of the stalled bill are likely to be incorporated into any new legislation Congress takes up next year.

A study by the Federal Highway Administration estimated that for every $1 billion spent on transportation projects, 34,799 direct and indirect jobs are created.

Minnesota currently has $218 million construction-ready projects awaiting federal funds, according to a recent survey from the American Association of State and Highway Transportation Officials. Applying the FHA's formula, that would bring 7,586 new jobs to the state, Schadl said.

But critics like Riedl say the FHA numbers aren't an accurate depiction of overall job creation, because the money for transportation will come out of other sectors of the economy through taxes.

Mitch Anderson • 202-408-2723

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