Webb: Invest in Infrastructure to Stimulate the Economy

By: Lowell
Published On: 1/23/2008 5:48:43 PM

See below for a press release from Sen. Webb's office.  I like this approach overall, as it doesn't just throw money at people but actually INVESTS in our nation's future.  What a concept, I know. :)  But seriously, as I've said before, if a person is dying of kidney failure or whatever, you don't give them an adrenaline shot.  Right now, an adrenaline shot seems to be the only tool our "leaders" have to offer, and it's simply not going to work.  Unfortunately, the economy has fundamental, structural problems that an interest rate cut or a few-hundred-dollar giveaway/"adrenaline shot" is not going to solve.  Thus, Webb's approach makes sense.  My only quibble is that I'd invest in "clean tech" -- renewable energy, energy efficiency, "green collar" jobs -- not just "infrastructure" in general.

Webb: Invest in Infrastructure to Stimulate the Economy

Urges Senate Finance Committee to Invest in People and Job Creation by Investing in Vital Construction Projects

Washington, DC-Senator Jim Webb (D-VA) said today that the best way to spur job creation and economic growth is to prioritize investment in infrastructure projects. In a letter to Senate Finance Committee Chairman Max Baucus and Ranking Member Charles Grassley, Webb urged that a large portion of the stimulus package be devoted to infrastructure development, "putting people to work and at the same time benefiting the nation's capital needs."


Senator Webb also advocated the extension and expansion of unemployment insurance benefits, heating assistance for low income households, immediate rebates that target low- and moderate-wage earners, federal assistance to the states to help finance Medicaid, and the extension of the research and development tax credit for businesses.

"Many families in the United States are experiencing economic distress," said Webb. "The combination of a decline in housing prices, the sub-prime crisis, a slowdown in job growth, and an increase in unemployment are threatening low- and middle-wage earners. Congress needs to act on an urgent, bipartisan basis to protect hardworking Americans."

"The strongest tonic for economic stimulation is investment in infrastructure projects. We succeed both in terms of creating jobs and addressing our country's sagging transport and water systems," continued Webb. "Priority should be placed on projects that have been structured for quick expenditure and on expediting federal approval of outstanding projects."

A copy of Senator Webb's letter to Chairman Baucus and Ranking Member Grassley follows.
****************************
January 23, 2008

The Honorable Max Baucus                                         The Honorable Charles E. Grassley

Chairman                                                                      Ranking Member

Senate Finance Committee                                            
219 Dirksen Senate Office Building                              
Washington, D.C. 20510                                              

Dear Chairman Baucus and Ranking Member Grassley:

As the Senate Finance Committee considers legislation to address the threat of recession, I urge you to draft a bipartisan stimulus package that contains the following priorities:

1.  Infrastructure

A large portion of the stimulus package should be devoted to infrastructure development, putting people to work and at the same time benefiting the nation's capital needs.  Reliable estimates have shown that each $1 billion spent on construction and maintenance of our nation's infrastructure creates approximately 35,000 - 42,000 jobs.  The American Society of Civil Engineers estimates that $1.6 trillion is needed over a five-year period to bring the nation's infrastructure to a good condition.  Congestion in the Washington, D.C., metropolitan area costs commuters $1,212 per person per year in excess fuel and lost time.  Virginia alone has $3.52 billion in wastewater infrastructure needs.  

In order to ensure that funds reach people in need as soon as possible, I believe that priority must be placed on projects that have been structured for quick expenditure and on expediting federal approval of outstanding infrastructure projects, encompassing investment in construction for schools, highways, bridges, and water systems.

As an important example, Virginia and the Washington, D.C., metropolitan area are awaiting an imminent decision by the U.S. Department of Transportation's Federal Transit Administration regarding a multi-billion dollar extension of the Metrorail to Reston, Virginia, and ultimately to Dulles International Airport.  This project would have a national impact.  Its immediate approval would result in the expenditure of $700 million this year in Virginia alone, generating thousands of jobs that will be filled by residents across a four-state area and giving an enormous boost to the Mid-Atlantic economy.  

2.  Unemployment Insurance

I support the extension and expansion of unemployment insurance benefits.  I would also urge that funds be provided for the administration of unemployment insurance. Virginia, like many states, needs additional funds for the state offices administering unemployment insurance, particularly because a recession will only exacerbate an already difficult employment situation in rural areas of the state.

Beyond these priorities, other proposals that will help stimulate the economy and assist our nation's citizens include full funding of heating assistance programs for low-income households, an immediate, refundable rebate that targets low- and moderate-wage earners, federal assistance to the states to help finance Medicaid, and extending the research and development tax credit for businesses.

I appreciate your efforts to ensure that the Senate's fiscal stimulus package helps bolster the economy and assists the low- and middle-wage earners most in need of help.  I look forward to continuing to work with you and President Bush on this important issue.

   Sincerely,

   Jim Webb
   United States Senator

Comments



Clintonesqe (Albo Must Go - 1/23/2008 5:56:00 PM)
That's the exact same policy President Clinton pursued in 1993.

http://query.nytimes.com/gst/f...



Good infrastructure project (relawson - 1/23/2008 5:57:31 PM)
Getting high speed Internet/Fiber into every home in America.  Would solve several problems.  For one, it would be expensive and create jobs now.  Second, it would help bridge the digital divide.  Third, it would more enable e-commerce.  That would be a huge stimulus to the economy.

The Internet is the equivilent of the Interstate highways in terms of impact on society.

Another infrastructure project could be some sort of massive renewable energy project.

Another could be highspeed rail.



No. That is a receipe for another fleecing (Sui Juris - 1/25/2008 1:00:04 AM)
of taxpayers.  High speed internet has been promised many times over.  No more subsidies to the RBOCs.  (And believe me, you can't trust the Dems to do the right thing on this.)  You want the story?  Check out Bruce Kushnick's Teletruth site.  I can't vouch for the specific figures, but I can for the gist of it.


OMG (Silence Dogood - 1/23/2008 6:05:46 PM)
It's like he read my book or something.  Put me down this month as a "highly favorable," SurveyUSA!


filibuster question (skippy smooth - 1/23/2008 6:15:05 PM)
Is our senator supporting Dodds filibuster?


The only danger in your approach Lowell (True Blue - 1/23/2008 6:17:36 PM)

Is that these days infrastructure projects equal wasteful no-bid contracts with companies like Bechtel.

If we could get back to competitive bidding and high quality infrastructure projects, we could make a big difference.



one other problem (humanfont - 1/23/2008 6:54:09 PM)
Infastructure is a great long term solution and something we need to invest in.  However it does nothing for a short term stimulous.   The time required to get a big infrastructure project going is too far to have any meaningful impact on the economy this year.  To rescue the housing market I propose we triple the home interest deduction for the next 12 months.  The total cost to the treasury of the home interest deduction is about 76 billion a year, so we could triple it for a year to give folks breathing room and that would cost the same as the stimulous.


one more thing (humanfont - 1/23/2008 6:55:09 PM)
Eliminate the tax break for selling a home for a year at the same time.  This will shrink the inventory.


Err, no (Silence Dogood - 1/23/2008 7:08:14 PM)
Inventory is good.  The prices of homes on the market are supposed to fall because people bought houses they couldn't afford (and frankly, those people SHOULD be selling their homes and moving into more-affordable housing units; we should help them do that).  Demand has been reduced because prices are artificially high thanks to the money that flooded into the market with cheap credit.  Once those prices fall back to a range where people can responsibly purchase, we'll have both supply AND demand.  Which would be cool, cuz that would be sort of like an economy.


don't confuse short-term gimmicks with long term solutions (Glant - 1/23/2008 7:49:53 PM)
We did not get into this financial situation over night and we will not get out of it with one-time quick fixes like tax rebates.  

We need more, better paying jobs.  It may take 12 - 18 months before the effect of some of Senator Webb's suggestions are felt, but unless we start now next year will be no better than this year.

Re-building our infrastructure, investing in green jobs, will all have long term benefits.  It is a good place to use our resources.



You totally "get it" (Lowell - 1/23/2008 7:59:15 PM)
Unfortunately, most CongressCritters do NOT get it; to the contrary, all they're focused on is surviving the November elections.  It's that type of short-sighted thinking that got us into this mess in the first place.  The ridiculous Bush "rebate" (ponies for everyone!) is certainly not going to get us out of it, given the complex structural problems facing our economy.  


No, no, that's a chicken in every pot (Teddy - 1/23/2008 11:58:37 PM)
and it sure worked for Herbert Hoover didn't it.

If Webb's ideas are implemented it will be a magnificent effort to reverse some 60 years of neglect of our infrastructure... and the mal-investment created by our 60 years of excessive military-industrial complex spending, which absorbed so much of our capital over the past 60 years, exactly part of the point in my new diary Flat Broke in the Year of the Bear.



short and long term fixes are required (Alter of Freedom - 1/25/2008 12:52:17 AM)
I only take issue with the "rescue" of the housing market. we need to be realistic about the situation of most homeowners though there are areas of the country that are experiencing large numbers of defaults/foreclosures but in Virginia assessments and home values had risen virtually unabated for five plus years without any one reaching for the alarms.  Even with the current declining underlying prices throughout Virginia most homes are still valued well above the 2002 levels. Of course the sub-prime market is a severe issue and Clinton's, though honestly not a supporter, plan for a 90 day period for reconcilation with lender seems appropriate. It is afterall an issue of personal responsibility regarding these contracts unless one can prove fradulent lending practices in my opinion. This period may give homeowner options like refinancing now that rates are being reduced. Still prefer Obama's plan for stimulus though Edwrads as some good points as well.
The infrastructure is a key point. 1/3 of the US population lives right along I95 and Virginia is in dire need of transportation funding relief so would not the long term plan Webb proposes not only benefit the economy but Virginia as well. Expanding interstates and bringing bridges up to modernization would not only provide jobs but allow Virginia the opportunity to shift toward other areas within its budget like healthcare for all Virginians, and paying for it.


Reminds me of my father... (legacyofmarshall - 1/24/2008 1:25:22 AM)
My daddy always taught me well when it came to fiscal policy.  I grew up in a somewhat liberal area, McLean, but everyone around there loves Reagan and his economic "independence" movement.  So sometimes I'd say "Dad, why should we pay taxes" and he'd point to the street outside the house and say "because that street wouldn't be there if we didn't pay taxes."

And when my friends convinced me of the great old myth that 'War is good for the economy.'  I took it again to my beloved father.  He told me my friends were confused because World War II was a great economic boom, but that was because people saved money during the war and started spending it like crazy afterwards, fueling a huge growth.  But I stood by the theory and said "but war encourages the government to spend money on American manufacturing" and he just said "you can't keep anything in war.  The government spends money on bombs that explode, bullets that get wasted, and airplanes that get shot down or scrapped.  The government can spend money whenever it wants, and if it spent that sort of money on the infrastructure, it would simply fuel a greater economy."

Just as a note: My dad is in no way a Democrat, he's actually very independent (having at times voted for Perot, Bush Sr., and whoever ran against Bush Jr. in a given year).   That and he's a military contractor...



The missing color: green (Kindler - 1/24/2008 9:26:38 PM)
I certainly appreciate the need for rebuilding infrastructure -- decaying roads, bridges, sewer lines, etc.  But I strongly second Lowell's quibble -- would it have killed Webb to have added the word "green" somewhere within his statement?  Just paving over the country blindly has its flaws as a strategy.

Clinton, Obama, Edwards, even McCain are talking about green investment, so it's not like Jim Webb would've had to do more than read the day's paper to get the idea.  Just because he is a Virginia politician doesn't mean he has to ignore the environment.