March 06, 2003

Budget Amendment to Provide Economic Stimulus Through Transportation Funds

Tuesday, when the Senate begins the process of writing the Federal budget for next year, I'm going to propose an economic stimulus that will quickly create 200,000 jobs and won't wreck the budget for years to come. I've been watching the sparring for months about corporate tax dividends. I'm going to try to break this gridlock with a dividend that can benefit every American community.My proposal would provide a dividend to the American people of 200,000 jobs for transportation projects across America during the heavy late spring and summer construction season. Four billion dollars would be made available to the states for much-needed highway repair and road maintenance projects that the states have ready to go, but which have been on hold for lack of funds. In addition, the states would receive, under my proposal, $700 million dollars for transit projects. According to the U.S. Department of Transportation, a billion dollars spent on transportation projects directly creates nearly 50,000 jobs - employment that is desperately needed with so much of America ravaged by recent layoffs.In addition to the tangible economic benefits of this proposal, it is fiscally responsible to use the funds in this manner. The $4 billion I want to put to work during the spring and summer construction season is just a fraction of the $20 billion that is now owed to the states under the Surface Transportation law (TEA-21) that will soon expire. This money is now in the coffers of the Federal government. The states are supposed to have it, and Washington, D.C. should stop sitting on what rightfully should have been used a long time ago to rebuild our infrastructure and put Americans to work. Next week in the Budget Committee, I'm going to say, if not now, when? When unemployment surges once more? When even more of the potholes turn into craters? The proposal I'm making hopefully will serve as a wakeup call that it's time to act, to stop the bickering, and give our hurting economy a responsible, effective boost. Here's how the country got in this fix. The Federal government collects a gas tax. Under a formula that's written in the existing TEA-21 law, that money is supposed to go to the states for transportation. But the Federal government limits how much of that money states can obligate through contracts, or plan to spend. Even after the states have obligated all the money they're allowed to obligate, there's 20 to 30 billion more dollars in unobligated contract authority out there.What my amendment proposes, plain and simple, is that the Federal government raise the limit on unobligated contract authority. Let's give them more of the money they're owed under the formula. Let's add in $700 million for transit projects. In this time of tight budgets, let's also be reasonable, and waive the 20 percent in matching funds required for this extra funding.This funding will provide a real shot in the arm to the states, and it won't just make the climate better for transportation. If states have the money they need for highways and transit, hopefully that will ease the burden somewhat on education and health care, and other critical issues.There are some other positive consequences here. For instance, raising the obligation limits in 2003 gives the states a better number to start from in the FY2004 budget. But the key is to stimulate the American economy immediately, by getting money on the ground now for the states and creating jobs nationwide. This isn't a wildly radical idea. It's just one that makes sense. Congress has allowed states to use their unobligated contract authority before, as an interim measure when the ISTEA law expired and TEA-21 had not yet been enacted.Rather than wait for TEA-21 to expire this time, Congress should act now:o to allow states to use an extra $4 billion of unobligated contract authority before this summer to take advantage of the heavy summer construction seasono to provide $700 million of additional transit funding; and o to waive state match requirements for this extra funding.This is an economic stimulus idea that won't wreck the budget for years to come. This is short term. It's targeted. It will create jobs. And it's a chance for the Federal government to hold up its end of the bargain with our states. I'm going to work to see this amendment passed and these funds in the mail this spring.