Obama wants to kick-start construction

Jan. 1, 2009
President Barack Obama and Congress propose to spend tens of billions of dollars on construction and repair of roads, bridges, transit systems, schools,

President Barack Obama and Congress propose to spend tens of billions of dollars on construction and repair of roads, bridges, transit systems, schools, federal buildings, and other infrastructure. The infrastructure program would be part of a massive economic stimulus package that is expected to cost roughly $800 billion over two years.

Unquestionably, the infrastructure stimulus would be good news for the construction industry. A recent survey by the Associated General Contractors of America found that 92% of building contractors, 93% of road builders, 77% of water resource contractors, and 83% of utility contractors are facing or experiencing declining activity. Two-thirds of these non-residential construction companies plan to cut their payrolls in 2009.

The Obama Administration estimates that infrastructure stimulus alone would create approximately 400,000 jobs. The full economic stimulus package should boost economic growth by 3.7% by the end of 2010 and create or save between 3.3 and 4.1 million jobs.

Governors and mayors across the United States are lobbying hard for infrastructure help. They are telling the Obama Administration that they have plenty of projects that are ready to go right now. For instance, more than 5,000 highway projects could be launched immediately, according to the American Association of State Highway and Transportation Officials.

Those projects would help more than just construction companies. Tank truck carriers and storage terminals that support the construction industry also would benefit as demand grows for the cement, asphalt, and the chemicals used in building materials.

President Obama has said that he wants quick Congressional passage of his stimulus package. He and his administration are counting on the stimulus plan as their primary tool for reviving the US economy.

Will the Obama stimulus plan work? Even some in Congress — Democrats and Republicans alike — are skeptical. Some worry about the enormous price tag and the implications for the future size of government. This stimulus program and the Bush Administration's bailout program enacted in late 2008 will leave the United States with a deficit in excess of $2 trillion. It is a debt that we may be passing to future generations, and it is a troubling legacy.

The new administration's White House Council of Economic Advisors addressed some of the stimulus program questions with a report acknowledging that the unemployment rate at the end of 2009 would still stand at about 7%, not much of an improvement over the 7.2% that the federal government reported at the end of 2008.

Still, the report defended the Obama stimulus program as critical for US economic recovery even if it doesn't create as many jobs as hoped. President Obama and his economists argue that if nothing is done, this recession could linger for years and the unemployment rate could reach double digits.

In an effort to reassure skeptics, President Obama has insisted that the stimulus package meet certain standards. Legislation must underwrite projects that will create jobs without delay; avoid lawmaker pet projects intended to reward special interests; fund programs based on objective evidence rather than on partisan considerations; and allow for public debate.

Clearly, we have some wild times ahead. We must hope that the new President and Congress will do what is right for the country. Failure simply is not an option.

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About the Author

Charles Wilson

Charles E. Wilson has spent 20 years covering the tank truck, tank container, and storage terminal industries throughout North, South, and Central America. He has been editor of Bulk Transporter since 1989. Prior to that, Wilson was managing editor of Bulk Transporter and Refrigerated Transporter and associate editor of Trailer/Body Builders. Before joining the three publications in Houston TX, he wrote for various food industry trade publications in other parts of the country. Wilson has a bachelor's degree in journalism from the University of Kansas and served three years in the U.S. Army.