GOP Stimulus Myths

The partisan fight over the $787 billion stimulus bill signed into law by President Barack Obama on Feb. 17, also known as the American Recovery and Reinvestment Act of 2009, rages on, with some Republican governors even vowing not to take all the funds to which their states are entitled.

There are serious concerns about this measure from serious people, conservative and liberal alike. Harvard economist Martin Feldstein, for example, a Republican who endorsed the idea of a stimulus, calls it an "$800 billion mistake," saying its spending measures are the wrong ones to "do much for employment." University of Texas economist James Galbraith, a liberal, predicts that the stimulus is too small to “really have an impact” and thinks larger steps will be necessary. The bipartisan Concord Coalition worries that "[c]ommitting to large and persistent deficit spending beyond the recession – even for apparently worthy purposes – would be detrimental to longer-term economic growth through reduced national saving." And as we pointed out in our Feb. 13 article, "Stimulus Bill Bravado," President Obama’s claim that the bill will produce millions of jobs rests on unusually uncertain economic assumptions.

However, many Republicans have been focusing their critiques not on the big issues, but on blaming the Democrats for allegedly stuffing the legislation with that lip-smacking, crowd-agitating snack of heathens: pork! As we detail below, some prominent claims of porcine characteristics are either untrue or wildly exaggerated.

American Issues Project TV Ad:
"Every Single Day"

 

 

[TET ]

Announcer: Congress just spent nearly $800 billion of your money. How much is that? Well, suppose you spent one million dollars every single day starting from the day Jesus was born – and kept spending through today. A million dollars a day for more than two thousand years. You would still have spent less money than Congress just did.

So what did you get? Economists say most of the money won’t help this year. The non-partisan Congressional Budget Office says the plan will actually hurt the economy in the long run.

On Screen: Billions for Pork and Pet Projects. Golf Carts. Fish Hatcheries. Remodeled Federal Offices.

Announcer: And what about the billions wasted on pork and pet projects?

On Screen: Sen. Charles Schumer (D-NY).

Announcer: Congressional Liberals say:

Schumer: Let me say this, to all of the chattering class that so much focuses on those little tiny, yes, porky amendments – the American people really don’t care.

Announcer: Is this change you can believe in? Tell Congress to stop the wasteful spending. [/TET]

What Would Jesus Spend?

Back on the scene is a group that made a splash in the 2008 election with an ad tying Obama to former Weather Underground radical Bill Ayers. (We wrote about Obama and Ayers back in October.) After disclosing at one point that most of its funds came from a Republican billionaire Texan, Harold Simmons, it has managed to keep its funding sources confidential.The group says its new ad will be running on FOX News, CNN, CNN Headline News, CNBC and FOX Business Network. The ad gets some things right. It’s correct, for example, that the stimulus package totals more than you would get by spending $1 million a day since the birth of Christ (2009 x 365 x 1 million = $733.3 billion).

And there is some truth – though not a lot – to the ad’s claim that the Congressional Budget Office says the bill "will actually hurt the economy in the long run." What the CBO said in a Feb. 4 letter to Republican Sen. Judd Gregg of New Hampshire was this:

CBO, Feb. 4: [T]he Senate legislation would reduce output slightly in the long run, CBO estimates, as would other similar proposals. The principal channel for this effect is that the legislation would result in an increase in government debt. To the extent that people hold their wealth as government bonds rather than in a form that can be used to finance private investment, the increased debt would tend to reduce the stock of
productive capital. In economic parlance, the debt would “crowd out” private investment.

 

 

 

But what the ad omits is that the CBO also said, in the same letter, that productive government investment could lead to increased output and that overall, the effect on output down the road would be quite small:

CBO, Feb. 4: Including the effects of both crowding out of private investment (which would reduce output in the long run) and possibly productive government investment (which could increase output), CBO estimates that by 2019 the Senate legislation would reduce GDP by 0.1 percent to 0.3 percent on net. H.R. 1, as passed by the House, would have similar long-run effects.

Not for Golfers

The ad then turns to what the narrator claims is "the billions wasted on pork and pet projects," while examples of these supposedly wasteful ventures appear on the screen, including "golf carts." Now there’s something to raise a skeptical taxpayer’s hackles – the prospect of a fleet of golf carts to zip members of Congress and other government officials around the links for their weekly nine holes.

 

 

But there’s nothing at all in the bill about golf carts. What is part of the stimulus package is $300 million for the acquisition of government vehicles with better fuel economy than the current fleet:

American Recovery and Reinvestment Act of 2009: For capital expenditures and necessary expenses of acquiring motor vehicles with higher fuel economy, including: hybrid vehicles; electric vehicles; and commercially-available, plug-in hybrid vehicles, $300,000,000, to remain available until September 30, 2011.

The "electric vehicles" mentioned in the legislation could include what are known as "neighborhood electric vehicles." Though described by some as "streamlined golf carts," NEVs are not actually for golfers. They are vehicles that can go up to 25 mph and are powered by batteries that plug into electrical outlets to recharge, thereby emitting no carbon dioxide. Some do resemble golf carts; others look more like mini-cars. 

As it turns out, NEVs are nothing new for the federal government. It already has hundreds of them deployed around the country, says General Services Administration spokesman Bob Lesino, including on military bases and at the government’s Solar Park in Denver, a collection of government facilities that are powered partly with solar energy. In fact, the U.S. Army announced last month that it will lease 4,000 NEVs over the next two years. According to the Army, the NEVs cost just $460 per year to power, versus $1,200 for a conventional gasoline-fed vehicle. The military is even working on developing hybrid vehicles that could be used on the battlefield.

The stimulus bill requires that the government come up with a plan within 90 days to replace its current fleet of vehicles with more fuel-efficient cars. Then it must spend the $300 million for hybrids, plug-in hybrids or electric vehicles (not just NEVs) by Sept. 30, 2011.

Fish Hatcheries

The AIP ad next mentions "fish hatcheries" as part of the alleged lard in the bill. There is money in the stimulus legislation for fish hatcheries, part of $165 million given to the Department of Interior’s U.S. Fish and Wildlife Service for “national wildlife refuges and national fish hatcheries and for high priority habitat restoration projects.” According to the USFWS Web site, the National Fish Hatchery System works on a number of habitat restoration projects including the recovery of fish listed as endangered species, the restoration of native aquatic populations, as well as providing fish to the National Wildlife Refuges. But contrary to some conservative characterizations of the $165 million, Fish and Wildlife Service spokesman Josh Winchell told us that the money "is not just for hatcheries." Winchell explained that these "resource management" funds could also be used for maintenance work like roofing and plumbing, as well as other projects. No specific projects have been identified for funding thus far.

So, there is no telling how much of that amount will actually be used for work on fish hatcheries. Interior Department spokesman Frank Quimby told us: "We have no specific information at this point." Winchell said that the emphasis would be on funding projects that create the most jobs in the shortest amount of time and provide value over a long period.

According to an Interior Department press release, the agency is developing a Web page through Recovery.gov for the public and will begin providing detailed information on its efforts by March 3.

Remodeled Offices

The AIP ad also mentions money for "remodeled federal offices," which is seriously misleading. The bill allots $5.5 billion to the Federal Buildings Fund of the Public Buildings Service, of which $4.5 billion is reserved for converting GSA facilities to "High-Performance Green Buildings." According to GSA’s acting administrator, Paul F. Prouty, this will allow the agency to comply with laws requiring it to reduce energy and fossil fuel consumption. Plans for making the buildings more environmentally friendly include thicker insulation, more efficient windows, dual flush toilets and LED lighting in parking garages – small changes, but GSA owns about 1,500 properties that would need to be updated. They also have bigger plans, such as installing energy-producing roofs and intelligent lighting systems.

Officials at the General Services Administration, the PBS’ parent, declined to discuss their proposed projects with us, because they are still finalizing plans. So we can’t say how much of the remaining $1 billion will go for new construction, and how much might go for upgrading existing government offices. But for the most part, the ad’s claim can be considered true only to the extent that anyone considers such things as weatherstripping and added insulation to be "remodeling."

For the record, a GSA press release on Feb. 20 quoted Anthony Costa, acting commissioner of PBS, explaining why an investment in federal buildings belongs in the stimulus bill. “We can help stimulate the economy by getting money flowing to the building industries – to construction workers, electricians, plumbers, air conditioning mechanics, carpenters, architects, and engineers,” Costa said. PBS owns and leases buildings and historic properties all over the U.S., meaning that the FBF appropriation could potentially provide jobs throughout the country.

Levitating Trains

A number of congressional Republicans, including Reps. Patrick McHenry (N.C.), Thaddeus McCotter (Mich.), Candice Miller (Mich.), and Sens. John McCain (Ariz.) and Jim DeMint (S.C.), have accused Senate Majority Leader Harry Reid, a Democrat from Nevada, of inserting an $8 billion "earmark" into the stimulus bill for a levitating train from Disneyland to Las Vegas. That’s a major distortion. No money is specifically set aside for such a train.

What the bill contains is $8 billion in funding for unspecified high speed rail projects (skip to p. 237 for the relevant section). The money is to be allocated by the secretary of transportation. A DOT spokesperson told us that it is “premature to speculate” about what exactly will be funded. Even vigilant pork-busting budget watchdogs agree that the "levitating train earmark" charge is without merit: Taxpayers for Common Sense, a nonpartisan group that scours legislation for earmarks, told us that there is "no way that this provision is an earmark for Sen. Reid."In truth, “levitating” trains really do exist – but they are properly called maglev trains, and they are high-tech marvels. The technology uses electromagnets to lift the train off the tracks. That reduces friction and allows trains to reach extremely high speeds; in 2003, an experimental Japanese maglev train reached a record speed of 581 kilometers (or about 361 miles) per hour. Here it is in action:

Officials in both Nevada and California, including California Gov. Arnold Schwarzenegger and Nevada Gov. Jim Gibbons (both Republicans) have agreed to back a maglev train between Anaheim (home of Disneyland) and Las Vegas. In June 2008, Reid did help to secure $45 million for an environmental study of the proposed route.

It’s possible the Anaheim-Las Vegas project will receive some of the stimulus funds, though how much remains uncertain. It’s not even clear how much Reid expects will go to it. On Feb. 12, the Associated Press reported that a statement from Reid’s office bragged that the Anaheim-Las Vegas project could receive what AP called "a big chunk of the money." But The Washington Post  later quoted a Reid spokesman as saying that while the project is “eligible" for funding, the transportation secretary, Ray LaHood – a former Republican congressman – "will have complete flexibility as to which program he uses to allocate the funds." We asked Reid’s office to explain the discrepancy – "big chunk" or merely "eligible" – but we received no response.

In any case, the weaker statement is more in line with the actual text of the legislation: 

American Recovery and Reinvestment Act of 2009: Within 60 days of the enactment of this Act, the Secretary shall submit to the House and Senate Committees on Appropriations a strategic plan that describes how the Secretary will use the funding provided under this heading to improve and deploy high speed passenger rail systems.

Is this pork? Taxpayers for Common Sense’s Ehrich Zimmermann told us: "Nothing about the bill indicates that maglev has a higher priority than other types of high speed rail." That is the DOT’s view as well. A spokesperson for the DOT told us: "The Secretary of Transportation is developing a comprehensive plan over the next 60 days to ensure the allocated high-speed rail funds are spent on projects that will have the highest-impact across the country."

The L.A.-to-Vegas project may well be under consideration for funding; according to a FAQ posted on the Federal Railroad Administration’s Web site, maglev projects are eligible for funding under ARRA. But that same FAQ also points to a 2005 Railroad Administration report to Congress that found that outside of the heavily populated northeast corridor (roughly D.C. through Boston) and a 527-mile section along California’s coast, maglev’s costs exceeded its benefits. That implies that the proposed Disneyland-to-Las Vegas route doesn’t make economic sense to the FRA.

We can’t predict the future, and it’s certainly within the realm of possibility that the Republican who is Obama’s transportation secretary will decide to devote the entire $8 billion to a project that is nowhere near shovel-ready and that the Federal Railroad Administration says is not cost-effective – all for the benefit of the Democratic majority leader. But we wouldn’t bet on it.

There are several more supposedly frivolous, not-so-stimulative projects that Republican members of Congress have criticized for being part of the economic recovery act. None of them are actually mentioned in the legislation, either.

In a form letter to constituents (e-mailed to one of our readers on Feb. 20), Rep. Erik Paulsen of Minnesota claimed that the bill (now law) "contains a huge amount of spending on many things that are unrelated to saving or creating jobs." He said that it "will fund requests such as $2 million for neon signs in Las Vegas, $4.5 million for an eco park featuring butterfly gardens and gopher tortoises, $500,000 for a dog park, $3 million for a municipal golf course clubhouse, $886,000 for a 36-hole disc golf course, $1.8 million for replacement tennis courts, $6 million for three aquatic centers with water slides … the list goes on and on."

None of these projects are specified in the American Recovery and Reinvestment Act. In fact, golf courses, and many other recreational projects, simply can’t get funding under the law, which stipulates:

The items Paulsen cites instead are taken from a lengthy wish list of infrastructure projects that the U.S. Conference of Mayors says are “ready to go” and could be funded quickly with federal dollars. The mayors’ report, dated Jan. 17, was compiled to demonstrate to Congress that localities should get a good amount of whatever stimulus money was approved, according to the city of Austin, Texas. In other words, the mayors were lobbying for federal money to come to them. The seven projects Paulsen singles out for ridicule are among 18,750 that the Conference of Mayors compiled through four surveys of U.S. cities conducted over three months. In an e-mail, the Conference of Mayors tells us that "we didn’t make any editing to the information [cities] provided us," adding that these were just examples and that "the Government will decide what to fund, not us."

All of Paulsen’s picks are also in a Wall Street Journal article highlighting these seemingly less-than-necessary requests. The Journal said "the bulk of proposals are roads, sewers and similar projects." But "some localities," it noted, "are using a kitchen-sink strategy."

That was indeed the strategy of Chula Vista, Calif., which listed more than 50 projects totaling half a billion dollars, including one historic property project that actually needed a kitchen sink. “We threw everything that was shovel ready onto a list and submitted it to the Conference of Mayors,” says Chula Vista Director of Communications Liz Pursell, adding that "we did throw on the kitchen sink."

Chula Vista also included a $500,000 dog park as a project worthy of possible federal funding, but Pursell says it “was never a priority” on the stimulus list and any of the proposed projects still would need to be vetted by the city council. So far Chula Vista hasn’t received a penny of stimulus funds.

The city of Austin said it could use $886,000 for a 36-hole “disc golf course” (that’s a Frisbee disc golf course), according to the Conference of Mayor’s report. But Austin government relations officer John Hrncir told us that he didn’t think the project would qualify for any funding under the ARRA. “And regardless,” he said, “I don’t think it will be on the list of city priorities.”

On its Web site, the city of Austin goes into greater detail of how this "disc golf course" seemed to be on a list of requests for stimulus money. It says that in October the Conference of Mayors asked cities for a list of "ready-to-go" projects. The city says that it didn’t have time to prioritize any of the projects, which "were not necessarily intended to be submitted to any federal agency for funding."

Austin has compiled another, more serious list of programs that it believes actually could receive stimulus funds. That one was submitted to Texas’ Capital Area Metropolitan Planning Organization (CAMPO), which, according to the city, has said the only projects likely to get federal funds through ARRA are transportation improvement projects.

A Paulsen aide admitted to us that no funds are specifically allocated for the projects the congressman mentioned in his letter.  "We didn’t say they were in the bill," said Legislative Assistant Desiree Westby. But "inappropriate requests such as these will be considered for funding." Maybe so, but Paulsen’s letter didn’t say they would be "considered," he said they "will" be funded. 

— by Viveca Novak, Joe Miller, Lori Robertson, Jess Henig and D’Angelo Gore