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December 7, 2008

Obama Pledges Public Works on a Vast Scale


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

With unemployment on the rise and no end to the recession in sight, 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.

Mr. Obama’s remarks sought to expand the definition of traditional work programs for the middle class, like infrastructure projects to repair roads and bridges, while also pushing a federal effort to bring in new-era jobs in technology and so-called green jobs.

Although he put no price tag on it, he said he would invest record amounts of money in the vast infrastructure program, which also includes work on schools, sewer systems, mass transit, electric grids, dams and other public utilities. He vowed to upgrade computers in schools, expand broadband Internet access, make government buildings more energy efficient and improve information technology at hospitals and doctors’ offices.

“We need action — and action now,” Mr. Obama, said in an address taped for broadcast Saturday morning on radio and YouTube.

The address followed the latest grim economic report indicating that the country lost 533,000 jobs in November alone, bringing the total job loss over the past year to nearly 2 million. Although Mr. Obama remains weeks away from taking office, the 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 have suggested could total $400 billion to $700 billion. Some analysts forecast even higher costs.

A big part of that will be public works spending, particularly on projects aimed at conserving or expanding energy supplies and cleaning up the environment. “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 and other projects approved ready to go as soon as money became available. They estimated that each billion dollars spent would create 40,000 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. It’s got to be big.”

President 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 Congress 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 told the House Ways and Means Committee. “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, widely 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 rules to govern spending, like a “use it or lose it” requirement that states act quickly to invest in roads and bridges or sacrifice federal money.

“We won’t do it the old Washington way,” Mr. Obama said. “We won’t just throw money at the problem. We’ll measure progress by the reforms we make and the results we achieve — by the jobs we create, by the energy we save, by whether America is more competitive in the world.”

Mr. Rendell said such rules would help get people to work right away. In his state, he said, contractors generally have 120 days to turn in bids for projects, but he will cite these rules to cut it to 30 days. “If they complain and moan and whine,” he said, “I’m going to say, ‘use it or lose it.’ ”

A substantial part of the proposed economic package will go toward creating so-called green jobs, those that benefit the environment or save energy. That part of the 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.

The study, released in November after months of work, found that a $100 billion investment in clean energy could create 2 million jobs over two years.

Daniel J. Weiss, an environmental analyst at Mr. Podesta’s center, said the government should start by providing fresh money to the beleaguered automakers, preserving hundreds of thousands of jobs, on the condition that they commit to cleaner and more fuel-efficient cars, like plug-in hybrids.

Then, Mr. Weiss said, Washington should invest money in existing programs that create work while cutting energy use, like home weatherization programs that have been chronically underfinanced. Congress authorized $900 million for the federal weatherization assistance program this year but only a third of that has been spent.

Mr. Obama has also spoken of retrofitting schools, post offices and other public buildings with high-efficiency heating and cooling systems and cool-burning fluorescent lighting. Money could also go to mass transit and solar, wind and biofuels projects.

A senior Obama adviser said the transition team was trying to translate his campaign promises into a legislative blueprint. “Part of what we’re doing is taking a look at that entire proposal and seeing what elements could be accelerated and what could be done as a down payment on the larger plan,” the adviser said. “We are also looking for things to the greatest degree possible that would spend out over two years and be a natural short-term investment.”

Several Congressional committees are planning hearings, including one next week by the Senate Energy and Natural Resources Committee. Senator Jeff Bingaman, Democrat of New Mexico and the panel chairman, said in an interview that he would focus on energy-saving projects that could be financed quickly and create jobs.

Mr. Bingaman noted a huge backlog of maintenance projects at national parks and other federal lands. Such a program would be similar to Franklin D. Roosevelt’s Civilian Conservation Corps, which built many of the original roads, bridges, trails and buildings on public lands in the 1930s.

“We have a queue of projects that are ready to go immediately if we can get the funding,” said Gov. James E. Doyle of Wisconsin, a Democrat. “These could produce large numbers of jobs here in Wisconsin, from Ph.D. researchers in our labs to people working in manufacturing, agriculture and forestry. We’re not trying to resurrect the past, but we’re looking to the kinds of jobs we’ll have in the future.”

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