White House and Congress Take Issue With AP’s Transport Stimulus Claims

The Associated Press published a piece today that, after putting "economists and statisticians" to work on analyzing $21 billion in federal stimulus money for transportation, reached a volatile conclusion:

(Photo: WBEZ)

Local unemployment rates rose and fell regardless of how much stimulus
money Washington poured out for transportation, raising questions about
Obama's argument that more road money would address an "urgent need to
accelerate job growth."

The very idea of measuring the immediate effects of transportation stimulus spending on joblessness is highly dubious, for two reasons underscored by the U.S. DOT's quickly blogged pushback to the AP story.

Firstly, for all the White House's talk of "shovel-readiness," the need to put transport projects out to bid, sign contracts, and hire workers means that stimulus dollars take some time to affect broader local economies. The latest congressional data shows that work has started on 57 percent, or $19.7 billion, of the stimulus law's $34.3 billion in road and transit funding.

That ripple effect for transport spending ironically could end up helping states, such as Florida, that were slow out of the gate in allocating stimulus money but continue to struggle with high unemployment.

Secondly (despite the best efforts of some senior Democrats) transportation only accounted for 6 percent of the stimulus' $787 billion in total spending. Why expect such a small slice of the legislation to have a major impact on unemployment rates? House transport committee chairman Jim Oberstar (D-MN) and his top lieutenant, Rep. Pete DeFazio (D-OR), today compared the AP's assumptions to "saying it is a waste of time to feed a
homeless family because that one act does not cure poverty."

Also from Oberstar and DeFazio's rebuttal to the AP:

Perhaps the most curious of the AP reporters' rhetorical flourishes was this sentence:

It's true that the transportation represents a small sector of the broader construction industry. But that industry is dominated by home building, which is still coming down from an unprecedented bubble-bursting.

And expecting the industry as a whole to benefit from transport-specific spending that was funneled through state DOTs is rather like expecting the industry to benefit from more spending on military aircraft; after all, Boeing works on construction as well ...

Even transport reform advocates who found the stimulus bill something of a letdown emerged today to scratch their heads at the AP's work. Laura Barrett, executive director of the Transportation Equity Network, said in a statement: