Many effects of federal stimulus law in Iowa hard to see

Debate goes on as stimulus marks fifth anniversary

Published: March 2 2014 | 6:10 am - Updated: 1 April 2014 | 9:04 am in

Corridor residents only have to look at a number of their rehabilitated roadways to see the benefits of the 2009 federal stimulus bill.

But looking past that, to the bill’s other results, is much more difficult.

Five years after the American Recovery and Reinvestment Act (ARRA) was passed, there is still an open and vigorous debate about the bill that spent $787 billion — later revised to $831 billion — on a variety of infrastructure, energy, education, health and work force projects. The debate continues as President Barack Obama is believed set to ask for more money in his federal budget for roads and other infrastructure spending.

For politicians and pundits, it is the gift that keeps giving on both sides of the debate. For bureaucrats and officials tasked with its implementation, it has likewise been either a nightmare or a blessing.

For residents of Cedar Rapids and Marion, one direct example of the ARRA is near and in front of Lindale Mall, at Collins Road and First Avenue SE. The federal bill paid $2.8 million of the $12 million total cost to widen the area to ease traffic flow.

Cedar Rapids Public Works Director David Elgin said that project helped several businesses there survive and eased congestion as cars moved between Cedar Rapids and Marion.

But finding concrete examples of the 2009 stimulus bill is not always easy, as the majority of the money went to more abstract needs such as employment, education and health care. Only a small portion has been spent on roads and bridges.

Here in Iowa

According to numbers provided by Gov. Terry Branstad’s office and the Obama administration, Iowa received about $4.2 billion from the stimulus bill, $400 million of which was spent directly on transportation needs.

The city of Cedar Rapids received a little under $6 million.

But the largest other designation was a $1.3 million study on how to develop renewable energy for businesses downtown.

U.S. Sen. Tom Harkin, D-Iowa, who voted for the 2009 bill, said the ARRA kept the country from sliding into an even deeper recession — or even another depression. He also cited the tens of millions of dollars that were spent on job training, teachers, housing, technology needs and tax cuts.

“Prior to the passage of the act, we were losing hundreds of thousands of jobs a month. We stopped it and began to turn it around,” Harkin said. “Nationwide, it has done a tremendous amount in terms of job creation and infrastructure-building … .

“Keeping teachers in school is just as important as building a road.”

However, Harkin also noted that Democrats in Congress originally crafted a $1.5 trillion bill, which was only cut in half to appease Republicans who wouldn’t vote for such an expensive bill. That meant that some critical parts of the bill, such as infrastructure needs, were only partially funded.

“That’s why we compromised at $800 billion,” Harkin said. “If the Republicans feel we didn’t spend enough on infrastructure, well, look at their own votes. We wanted to put more in.”

Harkin’s colleague in the Senate, Republican Sen. Chuck Grassley, recalled that as his reason for voting against the bill. He said too little money in the bill was designated for infrastructure, and that the bill failed to boost employment.

“The vast amount of this money went for salaries for public employees,” he noted. “When it comes to how do I think it worked for Iowa, I can quantify that very simply — it was supposed to keep unemployment below 7 and a half percent, which it was at the time we passed the bill, and unemployment shot up to 10 and a half percent, and it’s only recently got down below 7 percent. So it was a total failure for what it was supposed to do.”

A week ago, the White House issued a statement on the fifth anniversary of the ARRA, claiming that the bill “saved or created an average of 1.6 million jobs a year between 2009 and 2012 ... .” Some 15,000 projects were generated for transportation alone, it noted.

A report about the bill by the White House’s own Council of Economic Advisers stated that the bill was originally intended to spend just 18 percent on infrastructure, while the largest slice, at 31 percent, went to individual tax cuts.

Groups such as the American Road Builders and Transportation Association agree with Iowa’s senators that the bill should have spent more on infrastructure needs. The ARBTA estimated that poor road conditions contribute to 53 percent of traffic accidents in Iowa alone, and that accidents are the leading cause of death for Iowans under the age of 21.

ARBTA’s chief economist, Alison Black, said only about $26 billion was distributed nationwide to state transportation departments for work to roads and bridges.

“But it really was absolutely crucial to the overall highway construction market. It did a lot to support the Iowa program,” she said.

“Infrastructure is something that is so tangible, it’s something people see every day. It impacts everybody’s life. And it did become a focal point of the stimulus bill, even though it was a very small part.”

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