x Abu Dhabi, UAEWednesday 26 July 2017

Critics claim stimulus bill is wasteful

The stimulus bill has been trimmed since it ballooned to more than $900bn in the Senate and it contains no traditional "earmarks".

Filipino veterans are among those who will benefit from the stimulus package, receiving some US$200 in compensation.
Filipino veterans are among those who will benefit from the stimulus package, receiving some US$200 in compensation.

WASHINGTON // A new high-speed rail line costing $8 billion (Dh29.4bn) and stretching from California's Disneyland to Las Vegas and a $200-million grant to pay Filipino military veterans are not exactly the kinds of projects and provisions that some expected to find in an emergency stimulus bill to spur industry, create jobs and help resuscitate the US economy. But they are among several line items in the $787bn package, signed this week by Barack Obama, that have many Republicans and some oversight groups accusing the newly empowered Democrats of reckless spending. Critics are already stockpiling examples of so-called "pork-barrel" projects, which they claim will only benefit a concentrated group of US residents and do little to jolt the economy. "It's probably the worst spending bill we have ever seen," said David Williams, vice president of policy for Citizens Against Government Waste (CAGW), a non-partisan group, who took issue with an array of projects and the bill's unspecific language, which he said makes it impossible to tell exactly how the money will be spent. "We are not going to know for four, five, six, maybe 12 months until the money goes out the door, exactly which projects will be funded, so this is a very dark, not transparent process." Mr Obama and his fellow Democrats, who overwhelmingly supported the package, disagree with such claims. The stimulus bill has been trimmed since it ballooned to more than $900bn in the Senate and it contains no traditional "earmarks". Earmarks are a common way for legislators to garner federal funding for local projects that benefit their constituents back home; often, they are inserted at the end of the bill-writing process and passed without any debate. There have been some egregious examples over the years, including $400m secured by the former Alaska senator, Ted Stevens, in 2005 to build what was called a "bridge to nowhere" in a remote corner of his state. Mr Obama has fiercely defended the legislation - which could very well define his first term - from allegations by Republicans that it is laden with pork. "When they start characterising this as pork without acknowledging that there are no earmarks in this package - something again that was pretty rare over the last eight years - then you get a feeling that maybe we're playing politics instead of actually trying to solve problems for the American people," he said last week, in his first presidential press conference, adding that spending on projects is "the point" of a stimulus bill. Still, critics of Mr Obama's massive spending plan, which in the end was more than 1,000 pages, contend it is full of needless initiatives. Tom Coburn, a Republican senator from Oklahoma and the consummate fiscal conservative, has taken aim at $1.5bn set aside for an experimental coal-fired, "zero emissions" power plant in Illinois known as FutureGen. On his Senate website, Mr Coburn refers to the facility as a "sci-fi" plant and "pet project" of Dick Durbin, a Democratic Illinois senator. Elsewhere in the bill, conservatives have decried $3bn set aside for "community development", $2bn being given to battery companies to support the manufacturing of "advanced vehicle batteries", and $200m for an overhaul of the department of homeland security's headquarters. The department, however, estimates the project will create some 33,000 construction and renovation jobs. Others have criticised a provision that sets aside money for Filipino veterans who fought under US command in the Second World War. Although the payout will end a six-decade struggle for benefits and pensions that they were promised at the end of the war, the measure is an awkward fit for a stimulus bill. Many have complained about the $8bn set aside for high-speed rail projects - a large chunk of which will likely go to a train that can travel faster than 500 kph between California and Nevada. The total funding for such projects jumped suddenly in the final draft of the bill, from the $300m in the House version and $2.2bn in the Senate version. "It's a legislative Christmas tree," said David Almasi, executive director of the National Center for Public Policy Research, a conservative think-tank in Washington. Mr Almasi, like many of the bill's critics, noted the difficulty his group had digesting such dense legislation in such a short amount of time. "As the days and weeks go on, we are going to be finding things in the bill that people didn't realise were there." Still, despite the criticism, Mr Obama's stimulus has many supporters, among them city mayors and state governors - including many Republican ones - who are struggling to pay for education and infrastructure projects and desperately need federal funds. States stand to get more than $135bn from the package. Chad Stone, chief economist at the liberal-leaning Center on Budget and Policy Priorities in Washington, said much of the spending makes sense, adding many of the bill's detractors are too focused on small provisions that represent just a fraction of the overall package. "For the most part, the stimulus is being spent wisely," he said, noting that the critics who call many of the projects wasteful are pursuing a "confused argument". "If it wasn't going to happen, and now it is happening, then it's stimulus." sstanek@thenational.ae