Will latest jobs bill really produce jobs?

Associated Press | 1/6/2010, 3:18 a.m.

Even the investment in “shovel-ready” highway and bridge projects may not immediately translate into a reduction in the nation’s 10 percent unemployment rate.

Republicans cited government figures showing that, as of Sept. 30, only 9 percent of $27.5 billion for highways in the first stimulus bill had been spent. The Congressional Budget Office estimates that of the $39 billion in the new House jobs bill directed to the departments of Transportation and Housing and Urban Development, only $1.7 billion will get spent before next October.

A lot of the money “hasn’t even gotten out of Washington yet,” said Rep. Eric Cantor of Virginia, the House’s second-ranked Republican. “Why is it still here if it was designed to create jobs?”

Rep. James Oberstar of Minnesota, chairman of the House Transportation and Infrastructure Committee, said some 8,000 highway and transit projects – more than half those designated under last February’s stimulus bill – are under way, creating or sustaining 210,000 direct jobs. When indirect jobs are included, that number reaches 630,000, he said.

The low federal spending rate, committee officials said, is because the treasury outlay comes at the end of the process, after the contractor bills the state and the state bills Washington.

Dan DuBray, spokesman for the Interior Department’s Bureau of Reclamation, said his agency will have no problem putting to work the $100 million it would receive under the jobs bill to provide clean drinking water to rural areas. “Projects in Reclamation are much akin to planes waiting on the taxiway waiting to take off,” DuBray said.

Matt Jeanneret, spokesman for the American Road and Transportation Builders Association, agreed that “a lot of jobs” have been saved by the stimulus act, although in many cases federal money is basically replacing lower levels of private or state investment. The unemployment rate in the construction industry remains at about 19 percent, almost double the national level.

The stimulus is “a needed shot in the arm, but the real solution is a long-term highway and transit investment bill,” Jeanneret said. Congress has put off consideration of a six-year $450 billion infrastructure measure to replace the highway and transit act that expired in September.

The CBO has estimated that employment was 600,000 to 1.6 million higher in the third quarter of 2009 because of the stimulus act.

(Associated Press writer Ann Sanner contributed to this report.)