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Getting the stimulus right

Local groups have lots of ideas on what’s needed to get the economy going.

Education and community leaders testified for federal and local officials at a hearing at the Chicago Urban League on January 9, calling for spending on youth employment and education in the economic stimulus package.

Andrea Kovack of the Shriver Center on Poverty Law backs a stimulus proposal that would boost federal Medicaid funds to Illinois by as much as $640 million a year for two years. She argues the temporary increase should be applied to the state’s nearly $5-billion backlog in reimbursements to health care providers, which is threatening their capacity to serve Medicaid patients (recently covered by Carol Marin).

]Illinois PIRG has called on the Illinois Department of Transportation to release the project list it has submitted in response to Congress’s call for ready-to-go transportation proposals for the stimulus bill.

The group released a report from its national affiliate analyzing the transportation stimulus “wish lists” that 19 states have made public, which finds that more than half of funding requests are for new or wider highways, with only 17 percent going to public transit or intercity rail projets.

The report calls on Congress and the Obama administration to devote half of transportation stimulus spending to public transit, intercity rail, and bicycle and pedestrian proposals, and to prioritize road funds toward maintaining and repairing existing infrastructure.

“There’s got to be a lot of transparency, and it needs to be focused on long-term goals, reducing traffic congestion, reducing oil dependence, reducing carbon emissions,” said Brian Imus of Illinois PIRG.

Dean Baker of the Center for Economic Policy and Research points out that there are ready-to-go highway projects that would have a negative effect on the economy and energy demand by promoting sprawl. “It is possible to prevent projects that are not just wasteful, but actually counterproductive, from being included in the stimulus package,” he said.

“If we continue to extend roads to transit-starved residential enclaves or to employment hubs far from workforce housing, we will lay the groundwork for the next economic downturn,” Mary Sue Barrett of the Metropolitian Planning Council writes. “By focusing on repairing and preserving what we have, near where most people live, we will reap the benefits of good jobs, reduced foreign oil dependency, cleaner air and water, and expanded choices for shopping, schools and getting around.”

With demand for passenger rail growing dramatically, the Midwest High Speed Rail Association says the $100 million reportedly being discussed for high-speed rail in the stimulus package is “pathetically small” and should be increased to $5 billion.

That level of spending would put people to work laying track and building railcars and strengthen the economy by reducing transportation costs, said Rick Harnish.

The group has identified hundreds of millions of dollars of ready-to-go rail projects in Illinois toward building a statewide rail network — starting with station upgrades and new service to Rockford and Galena and the the Quad Cities. Harnish said the most immediate need, with demand soaring, is for additional rolling stock.

The Nuclear Energy Information Service has joined a national coalition calling on Congress to focus stimulus spending on sustainable energy technologies and green jobs rather than nuclear power and fossil fuels. Dave Kraft notes that in addition to the environmental and health harms they entail, nuclear and fossil fuel projects can’t be done quickly and produce far fewer jobs per dollar spent.

The coalition argues that spending to reduce energy use in residential, commercial, industrial, and public buildings would be most effective in terms of timeliness, job creation, and carbon reduction.

Recent reports that the Obama team is considering increasing the portion of the stimulus going to tax cuts — to as high as 40 percent of the $775 billion total — raise the question of what areas of spending may be sacrificed, as well as how effective the stimulus will be. “Tax cuts come in a distant second to public investment in actually creating jobs,” points of Robert Borosage of the Campaign for America’s Future. He argues that much of last year’s stimulus tax rebates went to pay down credit card debt, and what was spent tended to support overseas manufacturing jobs. “Public investment will be spent here and is more likely to produce jobs here.”

But new reports that as much as $150 billion in business tax cuts are being considered are particularly troubling. These are designed to attract Republican support in Congress but will do little to create jobs, Borosage says. A proposal to increase corporate tax write-offs will mainly benefit Wall Street firms. Even tax credits to reward companies for creating jobs “will mostly reward companies for jobs that they would have created anyway” and are likely to “generate a tsunami of fraudulent maneuvers designed to qualify for the break.”

[UPDATED 1-12-09]

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Category: economy, energy, environment, green jobs, jobs, transition, youth

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