Stimulus bill ready to put money to work - but will it?

  • Article by: KEVIN DIAZ
  • Star Tribune
  • January 28, 2009 - 11:33 PM

WASHINGTON - Minnesota construction worker Christopher Leko can only hope that there's a job for him somewhere in the 647-page stimulus package.

The 35-year-old father of two from Elk River has been mostly out of work since early last year, and he has exhausted his unemployment insurance.

"They're just saying there's no work out there," said Leko, who survives on odd jobs and his wife's salary as a financial planner.

The $819 billion bill passed by the House on Wednesday would save or create close to 92,000 jobs in Minnesota, according to Moody's. While that wouldn't reverse the current recession, some say it could offer a glimmer of hope.

"I'm trying to be realistic," said Leko, a union carpenter who voted for President Obama in November. "I think things will get better, but I don't foresee it being this year."

While Minnesota Republicans question whether the administration's recovery package will do much to turn around the economy soon, local and state officials are bracing for an infusion of cash to repair roads and bridges, modernize schools, weatherize buildings, improve water systems and expand health care.

All told, the package could send an estimated $4.5 billion to the state, not counting tax cuts worth $500 to nearly 2 million Minnesota workers. But most of the spending goes to maintain state and local government services, including money for schools, unemployment benefits, food stamps and Medicaid -- categories of spending designed to provide as much relief as cure for a bad economy.

"Our economy is in crisis and people are hurting," said Rep. Tim Walz, D-Minn.

The delegation vote

All Minnesota Democrats in the House but one - fiscal conservative Collin Peterson -- voted for the stimulus legislation. All three House Republicans from Minnesota voted against it.

The GOP skeptics said it shortchanges taxpayers while failing to invest sufficiently in job-creating infrastructure. "If it's only geared toward helping the balance sheets of states and local governments, it's not really doing what it should," said freshman Rep. Erik Paulsen, R-Minn.

The stimulus package won't erase Minnesota's projected $4.8 billion deficit. But it is designed to ward off state cutbacks in education, health care, and other key government services, something that DFLers in the Minnesota Legislature see as welcome news.

"It's needed," said state House Speaker Margaret Anderson Kelliher of Minneapolis. "It's for jobs that Minnesotans see every day -- teachers, police officers, people who plow their streets. ... A job is a job is a job."

Federal infrastructure outlays in Minnesota -- money for highways, bridges, transit systems , water and other infrastructure projects -- would total about $685 million, a fraction of the state's overall slice of the stimulus. Of that, about $478 million is earmarked for highway and bridge projects, which have taken on greater urgency nationwide since the 2007 collapse of the Interstate 35W bridge in Minneapolis.

Overall, the amount of highway and bridge spending slated for Minnesota is about half of the $950 million projected for some 200 "shovel ready" projects identified by state transportation officials.

Minnesota Republicans were pressing for more tax cuts, more infrastructure spending, and less spending on local government services.

"I'm all for investing in rebuilding our nation's roads and bridges," said Rep. Michele Bachmann, R-Minn.

Fellow Republican John Kline called it "a trillion-dollar borrow-and-spend bill [that] will not bring us back to prosperity. ... Rather than jump-starting the economy, this bill saddles our children and grandchildren with more debt and bigger government."

Minnesota Democrats countered that the benefits are not all meant to be short term.

For example, the Minneapolis school district would get $64.8 million for repairs and education programs; St. Paul will get $55.1 million.

"This is about kids," said Rep. Betty McCollum, a former state legislator and educator. "These are savings schools can absorb, that they can put into curriculum."

Spending priorities debated

But even among Democrats there were divisions about spending priorities.

Some blue-collar Democrats -- notably Minnesota Congressman Jim Oberstar -- say they had to compromise on more job-creating infrastructure spending to make room for other priorities, including the $275 billion in tax cuts that the new White House wanted to garner GOP support.

Oberstar, chairman of the House Transportation and Infrastructure Committee, had pressed for $85 billion in total infrastructure investment nationwide. He got $63.5 billion, of which $30 billion is for highways and bridges.

Conservative critics say that's less than 4 percent of the total stimulus package. Said Oberstar: "If the tax cut hadn't come into the picture, our $85 billion probably would have gone up."

Rep. Keith Ellison, D-Minn., also had to fight hard to tuck an additional $3 billion in transit funding into the bill. That's a priority for the Twin Cities' Metro Transit, which faces a $45 million operating deficit for 2010-11. The last-minute provision sponsored by Ellison would provide Minnesota an additional $21 million in transit funds.

With fare increases or service cuts on the table, some Minnesota officials argue that transit funds preserve existing jobs. "Does it make sense to hire a construction worker at the same time that you're laying off a bus driver?" asked Metropolitan Council Chairman Peter Bell.

While the stimulus package is hardly all bricks and mortar, Leko and other carpenters who have been struggling to find work say relief is relief.

"It doesn't have us jumping for joy," said St. Paul construction worker John Fahey. "But it keeps us from jumping off a cliff."

Kevin Diaz • 202-408-2753

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