On Power

On Government-Run Projects

“So then you get the argument, well, this is not a stimulus bill, this is a spending bill.  What do you think a stimulus is?  That's the whole point.  No, seriously. That's the point." President Barack Obama

Obama signing the American Recovery and Reinvestment Act of 2009. source: wikimedia

"[T]his plan will begin to end the tyranny of oil in our time -- doubles our capacity to generate alternative sources of energy, like wind and solar and biofuels.  And it does it in three years; saves taxpayers billions of dollars; makes federal buildings more efficient; saves the average working family hundreds of dollars on their energy bills.  After decades of empty rhetoric, that's the down payment that we need on energy independence.” President Barack Obama

Touted as the new New Deal, the American Recovery and Reinvestment Act (ARRA) could be the epitome of public sector investment in contemporary America.  It contains directives and funding from Washington, and it did so with the rhetoric of strong and swift leadership.  The ARRA is a stimulus packaged to embody the coordination and integration of the top-down action embraced in times of crisis.  And yet the ARRA is diffuse in its execution, as it directs stimulus funding to shovel-ready projects in the works by state and local governments. 

Its approach and promotion are premised on the need for urgency and the resulting need for centralized decision making. In a speech with Department of Energy Secretary Steven Chu in February of 2009, President Barack Obama impassioned: “This is the moment for leadership that matches the great test of our times.  And I know you want to work with me to get there. If we do not move swiftly to sign the American Recovery and Reinvestment Act into law, an economy that is already in crisis will be faced with catastrophe.  This is not my assessment.  This is not Nancy Pelosi's assessment.  This is the assessment of the best economists in the country. This is the assessment of some of the former advisors of some of the same folks who are making these criticisms right now. Millions more Americans will lose their jobs.  Homes will be lost. Families will go without health care. Our crippling dependence on foreign oil will continue.  That is the price of inaction.” President Barack Obama.  The need for comprehensive, swift, and decisive action from the top was supported against the risk of maintaining the economic status quo:  “With government making so many monumental decisions in such a short time, there will surely be unintended consequences…But policymakers’ most serious missteps so far have come from acting too slowly, too timidly, and in a seemingly scattershot way.” The Economic Impact of the American Recovery and Reinvestment Act

Energy-related measures in the ARRA involve both public-sector investments and private-sector incentives.  The improvements to government buildings may have a great effect on energy efficiency nationwide, given that the government has been estimated to be the largest energy consumer in the country.  While these effects may be substantial, the legislation mandates energy efficiency improvements in government-owned properties, leaving the private market to participate in such improvements voluntarily with the incentives presented by tax credits.  In addition to funding federal-level efficiency measures, the ARRA includes funding for state and local governments to improve the energy efficiency in their buildings.  Funds were allocated at the federal, state, and local levels for investment in energy-efficient vehicles. Other measures include: 

  • The ARRA created several funding measures for the improvement of energy efficiency of government buildings.  The legislation created an Office of Federal High-Performance Green Buildings within the General Services Administration and allocated funding for energy-efficiency improvements to federal buildings.  Further, $4 billion was invested toward improving energy efficiency in public housing.   
  • The ARRA provided funding for energy-related infrastructural improvements.  These investments included $11 billion in funding for an electric smart grid and $4.5 billion for the Office of Electricity and Energy Reliability to modernize the nation’s electrical grid.  Further, the ARRA also included $6 billion in loans for renewable energy and electric transmission technologies loan guarantees.  Additionally, the program provides $3.25 billion specifically for the Western Area Power Administration for power transmission system upgrades. 
  • The ARRA dedicated $3.2 billion toward Energy Efficiency and Conservation Block Grants.

While the ARRA has been rejected from the right as an over-inflation of state powers and deficits, it's scope is limited by its implementation structure: "But where the New Deal was designed around a series of monumental public works projects, ARRA is structured around investing in numerous smaller projects, upgrading existing structures and enhancing energy efficiency 'You won't see big iconic structures out of this plan, but the impact of new sustainable technologies society will be enormous', describes Andrew Goldberg, senior director of Federal Affairs at the American Institute of Architects in Washington, DC." Jaffer Kolb, Architectural Review Critics argue that the speed of the needed investment into the economy does not guarantee that the funding will go to the best projects or most qualified recipients.

The ARRA doesn't reach far enough, argues Nancy Levinson, editor of Places: "[I]t seems increasingly — depressingly — clear that the Great Recession is not (yet) sparking a new New Deal, a contemporary WPA. The New Deal was a big-scale, legacy-building, vision-to-burn public sector response to national crisis. But in 2010, unlike in the '30s, we confront our crisis in a social-political climate that's to a large degree contemptuous of public sector solutions, and more, hostile to the very idea of the public.” The Public Works

On Government Initiated Motivation

The ARRA included a $13 billion allocation to companies to extend tax credits for renewable energy production until 2014.

On Territory

On Expanded Infrastructures

ARRA: Total Spending on Transportation. data source: www.fhwa.dot.gov

A Vision for High Speed Rail in America. source: whitehouse.gov

Of the ARRA's total $819 billion budget, $48.1 billion are earmarked for transportation infrastructure.  In September 2010, the Obama Adminstration prompted Congress to adopt a new plan calling for an additional $50 billion to the federal transportation budget for roads, railways, and air infrastructure.  Such investments, the Obama Administration argues, are necessary to create jobs, stimulate the economy, and allow for the distribution of goods, services, and information necessary to keep the country competitive.   

"We can put Americans to work today building the infrastructure of tomorrow. From the first railroads to the interstate highway system, our nation has always been built to compete. There's no reason Europe or China should have the fastest trains, or the new factories that manufacture clean energy products.... Tomorrow, I'll visit Tampa, Florida, where workers will soon break ground on a new high-speed railroad funded by the Recovery Act. There are projects like that all across this country that will create jobs and help our nation move goods, services, and information. ." President Barack Obama, State of the Union, Jan 2010

Among the questions facing the ARRA is one of scale. "The biggest question mark hovering over the future of high-speed rail in the United States is funding. The $8 billion allocated in the stimulus package [designated for high speed rail] is not nearly enough, particularly because it is spread across a range of projects around the country. California’s new system alone could cost $40 billion. State governments will shoulder a substantial share of the costs, and they are grappling with budget deficits." The New York Times

The ARRA is met with criticisms that it is doing both too much, and too little.  The Obama Administration's labor day proposals for a new transportation bill are unlikely to see any progress before the 2010 election.  But to others, stimulus actions are just laying the foundation for overhauls to planning and infrastructure necessary for job creation and strong energy policy. “A green stimulus is no replacement for comprehensive climate and energy policy.  Even the most aggressive short-term spending will have only a modest impact on US greenhouse gas emissions and dependence on foreign sources of energy... Although green recovery efforts alone will not achieve broader climate and energy objectives, they can reduce the cost of comprehensive climate and energy policy.  The most successful programs will be those that can be implemented quickly and can complement, rather than seek to replace, future energy and climate-specific legislation.” Green Global Recovery?

The ARRA's reach has been greatly influenced by the need for quick response, and its dependency on shovel-ready projects. Government projects must go through a process of public review under the 1969 National Environmental Policy Act.  A critic of this process, Vishaan Chakrabarti argues: "The rubber really hits the road on this when you talk to people in Washington about why there wasn't more infrastructure placed into the stimulus bill. And the answer is really simple: they tried. Actually, the White House did take a run at NEPA early on and was completely beat back by the environmental lobby in Congress who said, “You cannot. It is a sacred cow. You can't touch it.” And as soon as that happened, the White House then realized infrastructure is basically off the table, except for some roadway projects, because there’s no way you can argue it's stimulative. How's it going to be stimulative if it takes years to do?" Underdome Interview with Vishaan Chakrabarti

The emphasis on highway projects raises questions about the urban, rural, and suburban impact of the bill.  With $27.5 billion going to highway and bridge construction projects, the "most sweeping investment in our infrastructure since President Eisenhower built the Interstate Highway System in the 1950s" President Barack Obama on High Speed Rail is building on Eisenhower's extensive suburban and rural highway network.  And yet, while investments in urban infrastructure are significantly smaller, with $8.4 billion alloted for public transportation (for maintenance, new construction, and new equipment), these investments go hand in hand with housing assistance programs, community development grants, and the newly created Office of Urban Affairs led by former Bronx Borough President in New York and urban planner Adolfo Carrion.  

The Stimulus Bill also invested $9.3 in Amtrak and regional rail programs, shifting the relationship between urban and suburban territories by connecting urban regions spanning across city and state boundaries: "The high-speed rail corridors we've identified so far would connect areas like the cities of the Pacific Northwest; southern and central Florida; the Gulf Coast to the Southeast to our nation's capital; the breadth of Pennsylvania and New York to the cities of New England; and something close to my heart, a central hub network that draws the cities of our industrial heartland closer to Chicago and one another. Or California, where voters have already chosen to move forward with their own high-speed rail system, a system of new stations and 220 mile-per-hour trains that links big cities to inland towns; that alleviates crippling congestion on highways and at airports; and that makes travel from San Francisco to Los Angeles possible in two and a half hours." President Barack Obama on High Speed Rail

On Distributed Development

ARRA-funded sidewalk installation Middletown, Rhode Island. source: UpstateNYer

With $27.5 billion going to highway and bridge construction projects, the "most sweeping investment in our infrastructure since President Eisenhower built the Interstate Highway System in the 1950s" (President Barack Obama on High Speed Rail) is building on Eisenhower's extensive suburban and rural highway network.  (see also NETWORK: Distributed Infrastructures)

On Dense Urban Development

The ARRA has alloted $8.4 billion for public transportation (for maintenance, new construction, and new equipment).  While investments in urban infrastructure are significantly smaller than those in highway construction and maintenance, these investments go hand in hand with housing assistance programs, community development grants, and the newly created Office of Urban Affairs led by former Bronx Borough President in New York and urban planner Adolfo Carrion.   (see also NETWORK: Distributed Infrastructures)

On Lifestyle

On Owner-Occupation

The ARRA provided $4.3 billion in tax credit incentives to homeowners, not available to renters,  for home energy efficiency improvements in 2009 and 2010.  Homeowners could receive 30 percent of the cost of various energy-efficiency-related projects up to $1,500.  

In addition to this tax credit, the ARRA allotted $5 billion to the Federal Weatherization Assistance program  (see Federal Weatherization Program

On Tenancy

The ARRA allotted $5 billion to the Federal Weatherization Assistance program  (see Federal Weatherization Program

On Risk

On Mutual Benefit

"The boost to GDP from every dollar spent on public infrastructure is large – an estimated $1.59." Zandi

Taking Apart the $819 billion Stimulus Package. Source: Washington Post 

The American Recovery and Reinvestment Act of 2009 is fundamentally an economic stimulus policy. As such, its priorities are to produce a boost to the economy and job creation.  Regarding energy issues, most of the funds directed by the ARRA provided for the creation of new jobs, many of which are in the energy sectors.  The legislation also included $500 million for job training through the Department of Labor for “green-collar” workers.  

"Then there's the argument, well, this is full of pet projects.  When was the last time that we saw a bill of this magnitude move out with no earmarks in it?  Not one."President Barack Obama Because of its focus on economic stimulus and its immediate need, critics argue that the trade-off for economic benefit may be the quality of many funded projects.  The speed of the needed investment into the economy may not guarantee that the funding will go to the best projects or the most qualified recipients.
 
Many proponents of the ARRA argue that the investment in energy-efficiency measures ultimately lead to economic stimulus by providing valuable cost savings with myriad benefits: “Investments in energy efficiency will reduce costs immediately, as cheaper gas and power bills enable households to keep more of their income and the government to offset new debt obligations with lower energy expenditures. To the extent that foregone energy spending is channeled elsewhere in the economy, efficiency investments combine the employment benefits of both building infrastructure and cutting taxes. These benefits continue long after the initial construction work has been completed and make repaying money borrowed to finance the recovery more  manageable. Targeted investments in low-carbon energy technology and infrastructure can add to this by making long-term emissions reduction and energy security goals more affordable and achievable.” A Green Global Recovery?

“Well, you know, you want to replace the federal fleet with hybrid cars.  Well, why wouldn't we want to do that?  That creates jobs for people who make those cars.  It saves the federal government energy.  It saves the taxpayers energy.”President Barack Obama

 

Background

At its core, the American Recovery and Reinvestment Act (ARRA) is an economic stimulus measure aimed at supporting and developing the county’s economy.  In so doing, it aims to develop that economy in climate-conscious, energy-efficient ways, by supporting industries and research in green sectors and providing green jobs.  Beyond “climate-consciousness,” this investment is seen as smart development in the long term with the expectation that these sectors will only grow with time and necessity.

In total, it is estimated that the bill would “create or save 3 million to 3.5 million jobs” in its first two years.” (Goldilocks and the Recovery Act)  Further, “[w]ell-tailored, green components of a recovery effort can create jobs and stimulate the economy while achieving significant energy cost savings for businesses, consumers, and the government.  On average, for every billion dollars invested our green recovery scenarios create 30,100 jobs and save the economy $450 million per year in energy costs.” (A Green Global Recovery?)

The primary criticism of the ARRA is the scale of government spending associated and the resulting federal debt.  These critics argue that the short-term stimulus to the economy will not last and do not justify the longer-term effects.  A Congressional Budget Office estimate stated that a potential result of the debt will be to produce a GDP “between 0% and 0.2% smaller in 2015 and later than it would be absent the stimulus package.” (Analysis of the American Recovery and Reinvestment Act)

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