Emergency stimulus requires an emergency board
Cross-posted from the NDN blog.
Clean infrastructure stimulus is coming and it is coming fast, perhaps as soon as Jan. 20, given the new accelerated timetable of President-elect Obama and the Congressional leadership. For us at NDN, this is an exciting moment, as we have been advocating on behalf of a large green stimulus package that works for the long term as well as the short term for quite some time.
Clean infrastructure stimulus has the ability not only to create jobs in the near term — particularly in sectors and regions hard hit by the now official recession, the manufacturing belt and the construction industry — but also to create the clean, modernized physical plant and infrastructure that America needs to ensure our future prosperity.
However, how the stimulus is structured and carried out is as critical as the dollar amount. On Tuesday, the nation’s governors presented President-elect Obama with a list of $176 billion in infrastructure projects ready to go. However, to get the money out onto the street quickly, moving it through the usual government channels won’t work. Rather, we need to create a new process and structure to get the money out quickly and efficiently.
Dick Ravitch, the former New York City MTA Chairman and head of New York Governor Paterson’s new infrastructure commission, knows more about how federal funds flow to the states under ordinary circumstances than most. Funds normally move slowly. He argues this is no time for business as usual and his recommendation, an emergency infrastructure board, well supervised, with proper auditing controls and carefully monitored by Congress, is critical to getting funds flowing and jobs starting quickly.
Rather than allocate money to agencies, Congress should authorize a board to fund valid projects. Infrastructure projects that get funded should be ones teed up and ready to go with all their zoning and permitting in place so that the only thing missing is funding. This is a far better way to move the funds out quickly than the usual funding channels that generally go through the Department of Transportation. At the same time, money should be allocated according to sound, consistent principles to ensure orderly dispensation of funds. The interests of the people can be adequately addressed by states identifying those that are high priority.
Projects with a green advantage such as public transportation projects, projects that employ green building, water projects, and others that move us toward a low carbon economy should go to the head of the line.
As excited as we at NDN are about the speed with which green stimulus is now moving forward, moving money out quickly but also responsibly is vital to making this historic stimulus work. If the money is spent wastefully, or perceived as being spent wastefully according to political expediency, it will not only be a tragic missed opportunity but also reduce its impact and undermine market confidence.
Indeed, just yesterday, China’s sovereign wealth fund announced it would no longer invest in American banks because of the erratic changes in U.S. policy. I wrote recently about the problem with the Treasury managing the bailout fund like a hedge fund. What we need is structure and consistency but a streamlined process to move money out onto the street where it is needed quickly and effectively.
At the same time, we cannot let red tape or ordinary bureaucratic lethargy slow funding when a key purpose of stimulus is to get the money out quickly to create jobs and get the economy moving again.
We don’t have that much time to get this right, but we do have a great deal of will as we face up to the severe economic challenges facing the country. An emergency board with emergency powers but also the proper rules in force to guarantee the judicious but expeditious spending of the tax payer’s money is a good idea that the incoming Administration and Congress should embrace.
Following are links to some of NDN’s work on a clean infrastructure stimulus: