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Obama Pledges Public Works on a Vast Scale

by: Peter Baker and John M. Broder  |  The New York Times

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Barack Obama has proposed the largest public works program since FDR. (Photo: Getty Images)

    Washington - President-elect Barack Obama promised Saturday to create the largest public works construction program since the inception of the interstate highway system a half century ago as he seeks to put together a plan to resuscitate the reeling economy.

    With jobs evaporating and the recession deepening, Mr. Obama began highlighting elements of the economic recovery program he is trying to fashion with Congressional leaders in hopes of being able to enact it shortly after being sworn in on Jan. 20. His address on Saturday followed the report on Friday indicating that the country lost 533,000 jobs in November alone, bringing the total number of jobs lost over the past year to nearly 2 million.

    Mr. Obama's remarks showcased his ambition to expand the definition of traditional work programs for the middle class, like infrastructure projects to repair roads and bridges, to include new-era jobs in technology and so-called green jobs that reduce energy use and global warming emissions. "We need action - and action now," Mr. Obama said in an address broadcast Saturday morning on radio and YouTube.

    Mr. Obama's plan, if enacted, would be in part a government-directed industrial policy, with lawmakers and administration officials picking winners and losers among private projects and raining large amounts of taxpayer money on them.

    It would cover a range of programs to expand broadband Internet access, to make government buildings more energy efficient, to improve information technology at hospitals and doctors' offices, and to upgrade computers in schools.

    "It is unacceptable that the United States ranks 15th in the world in broadband adoption," Mr. Obama said. "Here, in the country that invented the Internet, every child should have the chance to get online."

    President Bush and many conservative economists have opposed such large-scale government intervention in the economy because it supports enterprises that might not survive in a free market. That is the crux of the argument against a government bailout of the auto industry.

    But Mr. Obama proposes to charge ahead, asserting that extensive government support is needed to preserve and create jobs while building the latticework of a 21st century economy.

    Although Mr. Obama put no price tag on his plan, he said he would invest record amounts of money in the vast infrastructure program, which also includes work on schools, sewer systems, mass transit, electrical grids, dams and other public utilities. The green jobs would include various categories, including jobs dedicated to creating alternative fuels, windmills and solar panels; building energy efficient appliances, or installing fuel-efficient heating or cooling systems.

    Paul Bledsoe, a former Clinton White House energy adviser, said that Mr. Obama had now settled whatever debate there was in his transition team and among Democrats in Congress over how to lift the economy in the short term and over a longer horizon.

    "It's now clear that Obama intends to stimulate the economy through large direct government spending on infrastructure projects as well as through business and individual tax cuts," said Mr. Bledsoe, now an official of the National Commission on Energy Policy, a nonpartisan research group in Washington. "He is advocating things like guaranteeing every American a college education, wiring the entire country for Internet, putting in a smart electric grid. If he can do it, these will be major systemic advantages for the United States in the competitive global economy."

    Although Mr. Obama is weeks away from taking office, Friday's grim jobs report heightened pressure on him to assert leadership before his inauguration.

    Mr. Obama and his team are working with Congressional leaders to devise a spending package that some lawmakers suggest could total $400 billion to $700 billion. Some analysts forecast even higher costs. Mr. Obama has said he would direct his team to come up with a plan to save or create 2.5 million jobs in the first two years of his administration.

    A big part of that will be public works spending. "We will create millions of jobs by making the single largest new investment in our national infrastructure since the creation of the federal highway system in the 1950s," Mr. Obama said. He did not estimate how much he would devote to that purpose, but when he met with the nation's governors last week, they said the states had $136 billion worth of road, bridge, water and other projects ready to go as soon as money became available. They estimated that each billion dollars spent would create up to 40,000 jobs.

    Local and regional transit systems have $8 billion more in projects that could begin immediately, like buying hybrid buses and expanding light rail systems, creating thousands of jobs.

    "He hasn't given us any commitment, but we are fairly certain it's going to be large," Gov. Edward G. Rendell of Pennsylvania, a Democrat and chairman of the National Governors Association, said in an interview Saturday. "I think he understands if you're trying to reverse the economy and turn it around, this is not the time to do it on the cheap. This is not the time to do it in small doses."

    Mr. Bush and other Republicans have resisted such an approach in part out of concern for the already soaring federal budget deficit, which could easily hit $1 trillion this year. Borrowing hundreds of billions of dollars today to try to fix the economy, they argue, will leave a huge bill for the next generation.

    Conservative economists have also long derided public works spending as a poor response to tough economic times, saying it has not been a reliable catalyst for short-term growth and instead is more about politicians gaining points with constituents.

    Alan D. Viard, an economist at the American Enterprise Institute, told the House Ways and Means Committee recently that public works spending should not be authorized out of the "illusory hope of job gains or economic stabilization."

    "If more money is spent on infrastructure, more workers will be employed in that sector," Mr. Viard added. "In the long run, however, an increase in infrastructure spending requires a reduction in public or private spending for other goods and services. As a result, fewer workers are employed in other sectors of the economy."

    Mr. Obama implicitly tried to counter such arguments by invoking the federal interstate highway program, seen as one of the most successful public works efforts in American history.

    President Dwight D. Eisenhower signed the Federal Aid Highway Act in 1956, ultimately resulting in the construction of 42,795 miles of roads. In 1991, the government concluded that the total cost came to $128.9 billion, with the federal government paying $114.3 billion and the states picking up the rest.

    Mr. Obama also responded to criticism of waste and inefficiency in such programs by promising new spending rules, like a requirement that states act quickly to invest in roads and bridges or sacrifice federal money.

    "We'll measure progress by the reforms we make," Mr. Obama said, "and the results we achieve by the jobs we create, by the energy we save, by whether America is more competitive in the world."

    The green jobs portion of the economic package could run as high as $100 billion over two years, according to an aide familiar with the discussions.

    A blueprint for such spending can be found in a study financed by the Political Economy Research Institute at the University of Massachusetts and the Center for American Progress, a Washington research organization founded by John D. Podesta, who is a co-chairman of Mr. Obama's transition team.

    Daniel J. Weiss, an environmental analyst at Mr. Podesta's center, said Washington should invest more money in existing programs that create work while cutting energy use, like home weatherization programs that have been chronically underfinanced.

  

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Comments

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This will be a welcome

This will be a welcome change from 8 years of Corporate Welfare. It is laughable at times to listen to the Shrub expound on the evils of Governmental intervention into the Business World. Yet, when their Ponzi schemes collapse, he is right there with our money to save them from bankruptcy. Meanwhile the Country itself is ignored as are the ordinary citizens. Ordinary citizens being those who don't donate $50,000 or much more to RNC or selected lobbyists/Congress Critters.

Agreed. The so-called

Agreed. The so-called economist from the Enterprise Institute may have a background in economics, but his job is to peruade policy and thought. I'd like to hear his market justification for Blackwater.

Geez, I can't wait for my

Geez, I can't wait for my taxes to " improve information technology at hospitals and doctors' offices, and to upgrade computers in schools." The list goes on and on, just like the exhibits at Disney World. My only question is: where is the money to pay for project where "lawmakers and administration officials pick winners and losers among private projects and rain large amounts of taxpayer money on them." Note to Mr. Obama: DUDE, WE ARE FREAKIN TOTALLY BROKE AND HOPELESSLY IN DEBT!!! How do you "spend" your way out of debt? But it's OK with me. As the US dollar collapses, I will be making big bucks on FOREX. Instead of promising a free lunch, Mr. Obama, why don't you start a realistic program of cutting government expenses? Like ending the wars, cutting the military by 75%, etc. Oh, because they'd do you like they did JFK? Sorry, I forgot about that. Oh well, at least you'll by blowing the dough here in the US.

The problem with public

The problem with public works projects today is the construction industry and its unions. My experience has been that mega companies like Bechtel, Parson Brinckerhof, Turner Construction, and Halliburton control mega projects because they can afford to carry the insurance. However, as we witnessed in Iraq with the $100 million no-bid contracts, there is significant corruption, premeditated cost over-runs, thievery through the change order process because of the lack of oversight or collusion with local authorities. At the union level, nepotism is rampant. There are some who believe that public construction jobs belong to their families alone and not to others, especially minorities. Following this path, of course, continues to demonstrate that Barack Obama is disengaging himself from progressives and shoring up his flanks on the right to get re-elected. At best, it shows he does not have a clue about the myriad of ways "the system" is broken. Consequently, he does not demonstrate a savvy intelligence about how to fix it. What he has shown to this point that he could win an election. "It will get worse before it gets better," he warns. My question to Obama is this, one that has not been asked by the media: what policies will your administration put in place to protect all the American people when this happens, not just those with stolen national resources? Because if there is no safety net in place, those on the bottom will exercise their right to survival and it will not be pretty. The poor and underclass of this nation cannot be asked to sacrifice what they do no have. Barack Obama may become the second president to enforce the Patriot Act in a degree several times greater than George Bush. Expect those prisons that Halliburton is constructing to become an administration solution to widespread social unrest, a direct inheritance from the Bush and the neoliberals. Worst, is Obama's early readiness to bundle billions to the financial services industry rather than to the states to prop up credit and local communities.

The myth of free markets has

The myth of free markets has to end. What difference does it make who runs the enterprises that provide employment and services to the American people? A mix might provide more stability. An example would be Renault in France where the French government owns 15% of the company. The US lags behind broad brand connection for the same reasons farmers lacked electricity before the New Deal took on the private utilities with programs such as the TVA. Further more there would be no inter net if the government hadn't paid for the development costs. The same goes for medical research. The time has come for a real look at how the economy works free of stupid dogmas.

It is amazing how

It is amazing how Republicans are now concerned about the deficit. For 8 years (because even with the Dems in charge they didn't change their tune) they ran up deficits faster than ever in history, pissed away money on war, refused to raise taxes, kept their stupid inflated weapons programs (the Crusader and F-22 come to mind) open, and the like and now that we regular people are losing our jobs, homes and the basic essentials for life they are suddenly concerned about balancing the budget. If those so-and-sos had lived up to their ideology we would have a balanced budget (or at least nearly so) and we wouldn't have to go into such explosively high debt to do these programs. Conservative economists are likely right that public works programs don't boost the economy short-term, but what they do is keep some money in workers' pockets and help set the stage for future growth once we get out of our hole. They also provide chances to fundamentally restructure our economy. The Highway program of the 50s helped wipe out our railways (a short sighted move but whatever), and maybe the green program can help wipe out our greenhouse gas transport system in 20 years or so. It is a shame these conservative economists weren't beating down the door of Congress for the previous 8 years because they might have beaten some sense into the Republicans who were presiding. As Ted Rall said, the problem is not conservatism, which is a welcome check on excess, it is a party, the Republican party, which completely abandoned all of their economic principles while continuing to perpetuate the myth that they were fiscal conservatives. What we need are honest politicians who do not let power go to their heads and who remember the ideals which they say motivated their entry into politics in the first place. Power became the goal and means and we are a weaker, poorer nation as a result.

The economic plan that

The economic plan that identifies 2.5 million Americans out of work. Should identify and include the 3 million veterans that will be looking for work over the next 3 years. If we are going to create a green economy with a new work force, let us not forget the veterans who defend the freedoms to choose this new direction. With sustainable goals and training support veterans will want to be participants in the change and see a sustainable future for themselves and their families in it. http://www.veteransgreenjobs.org

Very well! As long as we do

Very well! As long as we do productive investments we will be fine. Lets not forget direct expensing of investments for tax purposes. A word to "conservative" economists: How viable are military and weapons contractors in a free and peaceful economic system? Excessive military spending is THE most wasteful and unproductive spending. It did Rome, England, and the Soviet Union in and it will do us in if we don't reverse course radically! We desperately need to rebuild the home base and productive investments are the way to go! We will either have a deflationary collapse or we reflate with a massive spending program, financed by the FED. I prefer the later any time!

"He is advocating things

"He is advocating things like guaranteeing every American a college education..." My guess is no more than 10% of the US population is capable of college-level work. Is this kind of wishful thinking representative of BO's worldview?

Only 10% of us capable of

Only 10% of us capable of college-level work? Are you kidding me? I think that might be true for the jocks they recruit to play football but the majority of college students that I have come in contact with were very diligent. Maybe that holds true for state universities (I go to BSU) but not for the elite schools. Maybe having Daddy pay the bills for school isn't the brightest idea because then the one's who are born wealthiest get into the best schools as opposed to those most qualified getting into those schools. The Germans have a great system for that. College is free, but attendance is merit based. I read something recently about some writer stating what you just said about 10% of people being worthy of college. The guy who wrote about that also wrote "the bell curve" and his analysis has been thoroughly discredited; he is a guy who seems to believe in the old-school aristocratic thinking that says that only the rich should make decisions and that their children will naturally be the 10% who deserve schooling. Wake up and smell the catfood.

I say, don't bail out any

I say, don't bail out any large corporation, do the public works projects as Obama described and let the corporations fend for themselves. If people have money to buy, then they can buy the new cars if they want to. If they don't want to buy them, what good are the car companies that produce them?

To Mike in NY: Your doubt

To Mike in NY: Your doubt that most folks can handle college is an elitist view that denies folks even the chance to excel. If lower education and schools are improved, more people really will be ready for the college education that modern life now demands. It's being done in other countries in Asia and Europe. Why should the United States maintain their inferiority complex?

@Brian: The student

@Brian: The student population of the state schools is much more representative of the population as a whole than the elite institutions, so that part of your response actually supports what I wrote. “Diligence” may be an admirable quality, but it does not equal “ability.” Intelligence does indeed follow a bell curve a/k/a a normal distribution, like many other parameters, and Murray and Herrnstein’s analysis has only been “thoroughly discredited” in the wishful thinking of those who clearly weren’t going to accept their conclusions to begin with. And no, they didn’t think the rich should be running things, just the most intelligent. Really, it’s hard to argue against that. BTW, “jocks … Daddy … wealthiest … aristocratic …rich” is pure leftist boilerplate. I probably should be used to it by now, after repeated descents into the Truthout echo chambers, but it’s still boring.

Clipping Corporate "Works

Clipping Corporate "Works Coupons" in the GM Chilean Redoubt: >They might nuke us. >>Ya think so? >Mebbe. >>What's our card to play? >Well, we can threaten to sell to the Japanese, but we should have a backup plan set up in Chile. >>Chile? >Yes boss, that's , you know, the typical place for fascists to go hide out. It's safe, they never did anything at all to Pinochet, and heck in Winter they still have great sales of fruit and veg to the U.S. So our strategy should be this: We pick up and move to Chile and start selling armor plated SUV's out of a Chilean plant. >>Sounds like a plan. So what about this Washington show? >Shine it on, boss!

The economy having left him

The economy having left him with many lemons, Obama is making the best of a bad situation by making lemonade. The WPA and CCC served us well during the Great Depression years--right down to the small-town level where I lived then, and live now. A well-built sidewalk on my block bears the clear imprint: "WPA, 1935."

Investing in our

Investing in our infrastructure is the best first choice in resuscitating and stabilizing our economy. I much prefer seeing my tax dollar spent on projects that cut overall costs in the long run, such as with more public access to alternative energy. When compared to our taxes sent to and lost in the mideast, a direct and large investment in our own concerns (jobs, alternative energy, increased internet access, and, what I think of as greater free market access - real choices (as opposed to subsidizing corporations), is as bright as gold. Better actually, since an investment in our infrastructure means long-lasting results that could well open up more sustainable investments.