Democrats' new jobs bill evades Wall Street, but sprawls away from Main Street

Congress of New Urbanism CEO John Norquist gives President Obama and congressional Democrats higher marks for not patronizing Wall Street as they did with the stimulus, but he also explains how federal money still won't make it to the local communities that need it most:

It's progress this time that the funds will be flowing away from, not toward, Wall Street. And the legislation will keep some people working, especially in local and state government. But will funds from this bill really reach Main Street, as its name implies? Well, not so much. When it comes to the largest spending item in the bill — $27.5 billion in highway spending — Main Street is missing.

The $27.5 billion isn't targeted to rebuild streets at the heart of older cities and towns, the cherished settings for Memorial Day parades and holiday light displays. No, the money will primarily go to projects that government knows best —the expansion of wide, motor-vehicle-only highways that go hand-in-hand with energy-wasting sprawl. This follows the earlier stimulus bill that favored massive highway projects, including a batch of expensive "highways to nowhere" that an examination by the Infrastructurist website concluded "make no sense."

The new bill does reserve $8.4 billion for transit and $800 million for Amtrak. But just when U.S. real estate markets are turning to Main Street and traditional neighborhood design, Congress throws $27.5 billion at the infrastructure — road widening — that supports sprawl.

Inasmuch as Republicans are generally heartless toward Main Street, their Democratic counterparts are generally clueless about it.

Nashville PR firm still not converting federal recovery funds into public benefit

Two months ago, I broadcast information from Recovery.gov that Nashville's McNeely, Pigott, & Fox had received stimulus funds for a green initiative for which they had created zero jobs. Via Post Politics, Stimulus Watch continues to note the lack of progress with taxpayers money by McNeely, Pigott, & Fox:



How much longer do we have to wait to see tangible community benefits from this award?

Shell-shocked Short-shrift Stimulus

According to a Nobel Prize-winning economist:

There was a lot of talk about health care being Obama’s Waterloo. It won’t, I think and hope. But stimulus is starting to look like Obama’s Anzio — the battle in which the American commander got himself into terrible trouble by being too cautious.

And right now Obama is pinned down in his too-small beachhead, taking heavy casualties.

UPDATE: It's slow-moving stimulus, too:

Stimulus money for transportation projects is being spent far more slowly than expected.

When the economic stimulus act passed in February, the nonpartisan Congressional Budget Office estimated that the U.S. Department of Transportation would spend about $5 billion by the end of the fiscal year, which was Wednesday.

But Transportation Secretary Ray LaHood said Thursday that only $3.4 billion has been spent so far – about a third less than forecast.

High-Price Presence of AT&T & Comcast Disqualifies Underserved Cities for Broadband Stimulus

The presence of giants usually limits the options of peasants. Despite stereotypes of accessibility, it is especially true for underserved urban areas:

the rules governing the grants are stacked against cities like San Francisco, even though urban areas are among the places least reached by broadband and most in need of efforts like the one under way.

"I don't want to be seen as criticizing the Administration's efforts on the broadband problem around the country," Vein says. "I applaud its efforts. But the rules are written in such a way that it's difficult for a city like San Francisco to meet the requirements." An Aug. 14 deadline for applicants for the first wave of funds was extended by six days after technical glitches snagged the application process.

To qualify for funding, applicants need to prove they're catering to an "underserved" area. Yet the National Telecommunications & Information Administration (NTIA), which is overseeing the program, defines underserved as one where at least half of all households lack broadband, or where fewer than 40% of households subscribe to broadband, or a place where no service provider advertises broadband speeds of at least 3 megabits per second. In a densely populated city like San Francisco, where telecom providers like AT&T (T) and Comcast (CMCSA) widely advertise residential broadband all over the city, it's hard to point to a place that technically meets the "underserved" definition.

According to BusinessWeek a small town near Nashville has the same problem as San Francisco:

In 2007, the local power utility, Pulaski Electric, built its own fiber-optic network to serve homes and local businesses. The service, which has about 1,500 customers, is called Energize and offers 10 megabits per second plus TV and voice calling for $99 per month. Pulaski Electric CEO Wes Kelley says he'd like to expand the service to some 2,500 households in outlying rural communities.

But Pulaski runs afoul of the same "underserved" definition as San Francisco does. A patchwork of local phone, cable, and wireless companies offer varying levels of DSL and fixed wireless services, making it difficult to argue in a grant application that these areas are "underserved," Kelly says, even though some of them have no broadband service at all. "There's a combination of hit-and-miss providers in these communities that made it too complicated, so we decided to sit out the first round and wait," Kelley says.

With Stimulus Going to States, Cities Often Operate without a Safety Net

One DMI blogger underscores the hit cities take when stimulus dollars trickle down from the federal government through state governments:

While the stimulus package directed about $140 billion to state governments, the recovery act sent very little money directly to cities: much city aid was funneled through state governments. Providing money directly to cities in a subsequent stimulus package would not only mitigate procyclical state fiscal policies, but would generate longer-term dividends for federalism.

Targeting aid directly at cities would free up state money to balance budgets in the exact same way that aid to states would prevent cuts in state funds for city schools and other urban programs. The countercyclical effect is the same: federal funds prevent service cuts at a time when they are most needed. In fact, the effect is even enhanced if state governments - which ... are disproportionately influenced by rural areas - enact more severe cuts for more populated urban areas than for suburban and rural ones ....

Directing stimulus funds to cities would make mayors and city governments less captive to their state governments, which currently hold cities' budgeting - and thus policymaking - processes hostage. One of the worst examples of this came when Mayor Bloomberg budgeted 14,000 teacher layoffs in case significant state education funding was withheld.

Another DMI blogger explains how the trickle plays out in west coast cities:

Unfortunately, the sacrifices that statehouses are asking city and county governments to make will only prolong the country's economic slump and hinder long-term growth. California is planning on keeping $900 million in gas tax revenue from cities and counties, keeping construction crews out of work and prolonging critical repair work that will lead to deteriorating transportation infrastructure. The state is also looking to keep $1.3 in property taxes that was set to go towards local redevelopment agencies. While most private construction has hit a standstill, these public-private partnerships are still supporting construction projects. In Los Angeles, this would mean putting 2,300 construction jobs at risk.

Two of Tennessee's Neighbors Wasted Stimulus by Juicing the Competition

The need for federal oversight and regulation continues. Progressive States Network's Nathan Newman cites the worst examples of states using federal assistance to overpay for jobs and steal them from other states:

• A multi-state bidding war for a battery production consortium ended up with Kentucky offering $200 million to subsidize a 2,000-worker facility at a cost of $100,000 per job.
• Georgia paid $100 million to NCR to move its 1250-person headquarters from Dayton, Ohio - its home for 125 years - down to an Atlanta suburb.

In the absence of fiscal restraint at the state level, it would be nice if federal regulators would step in to stop the carnage. It is federal money, after all.

Is the Stimulus Passing over Cities in Favor of Exurbs and Rurburbs?

ProPublica's Amanda Michel writes that, despite appearances to the contrary, metropolitan stimulus money may still be in the pipeline:

States had a June 29 deadline to obligate, or decide how to spend, 50 percent of their transportation money. But my colleagues here at ProPublica discovered that there’s more than one way to meet the deadline. By June 30, they found, “13 (states) still hadn’t obligated 50 percent of their total highway funds ....” It turns out that states had to obligate only the money controlled by the state governments, not the funds transferred to big cities and urban areas. So cities may not have fully reported their spending projects yet; we’ve put in a call to the U.S. Conference of Mayors to ask about it.

He Warned Us

Paul Krugman on how President Obama hedged his bets on the stimulus and now the Republicans are going all in early in the poker game to fill the void where White House boldness should have been:

It’s only June, but Republicans are already claiming that the Obama economic plan has failed. (Yes, that’s insane — hardly any of the money has flowed to the economy yet — but this was predictable.) Meanwhile, unemployment is already above 9 percent. And the green shoots are looking browner by the week, especially on the jobs front: new claims for unemployment insurance are stubbornly running at more than 600,000 a week, far above the 350,000 or so that would be consistent with a stable unemployment rate.

We really do need a bigger stimulus. But it’s going to be hard slogging.

Red Flags and Flares When Fundees Report Whatever They Want To

We can never say the Government Accountability Office did not warn us that there be rocks here:

In the GAO’s opinion, the system for making sure that stimulus dollars are spent properly simply isn’t up to snuff. The report goes on to note that state auditors—whose job is to make sure that public dollars are appropriately spent—don’t have the funding to exercise their own responsibilities under the stimulus bill ....

The GAO reported that “significant questions have been raised about the reliability of the data on www.USAspending.gov,” which is mandated by law to track financial information about who gets federal funds. The GAO points out that because the numbers on the site come from those receiving funds, the quality of their data can’t easily be verified.