Advice to Obama: How to Make the Recovery Plan Accountable and Strategic

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To: President-Elect Barack Obama
From: Greg LeRoy, Good Jobs First ~ 1/8/09
Re: The American Recovery and Reinvestment Plan

While honing plans for the biggest recovery stimulus since the New Deal, you and your team have sent some great signals. You’ve said it cannot be structured as patronage “pork,” and that it must not include earmarks. You spoke of transparency today and Vice President-Elect Joe Biden has reportedly said you want a Web-based disclosure system to track the spending.

I applaud such change, and offer here some specific ways—drawn from proven state and local precedents—you can really scrape the rust off of Uncle Sam’s economic toolkit.

Make Spending Hyper-Transparent on the Web: I assume that you really don’t want the public a year from now to hold your Recovery Plan in the same contempt they have for Treasury Secretary Paulson’s bailout debacle. The solution: a Web-based disclosure system that reports where the money is going and what states and localities doing with it.

You can do this by simply augmenting the existing platform at www.usaspending.gov. That’s the website created by a bill you co-sponsored in 2006 with John McCain and others. For the Recovery Plan, disclosure needs to go deeper into sub-grantees and sub-contractors, and it needs to cover outcomes: jobs created, wages and benefits paid, and the demographics and neighborhood locations of the workers who get the jobs. Look to Illinois for a model website; it was created by a 2003 bill that you voted for as a state senator—and that Gov. Rod Blagojevich signed, for free!

Let’s face it: some of the governors and mayors you’ll be writing large checks to are not exactly known as good-government types. A web-based system enabling taxpayers to see where their money is going will empower citizen watchdogs to keep the pressure on state and local officials who will control much of the money—and on private contractors.

Give People the Transit They Demand: Americans are stampeding with their feet—and their bond-vote dollars—to demand more and better public transportation. Since the Recovery Plan won’t be funded with gasoline-tax money, you are not bound to have road-building take up more than four-fifths of the Plan’s transportation budget. Spending a third or more on transit, bikeways and pedestrian improvements will give people what they want—while reducing greenhouse gas emissions and improving America’s physical fitness.

It’s also a potent strategy for economic opportunity: too many carless families (who are disproportionately of color) are prevented from competing for jobs located beyond transit lines. And with the cost of owning a car approaching the cost of housing for lower-income families, making more jobs transit-accessible will be a huge cost-of-living benefit.

Build and Retrofit Everything Green, Public and Private: About two-fifths of greenhouse gas emissions come from the built environment, so building and retrofitting public facilities to green standards offers more job creation and climate change benefits. To their credit, some federal agencies are already building to the U.S. Green Building Council’s Leadership in Environmental and Energy Design (LEED) standards and you’ve set a new goal of modernizing three-fourths of federal buildings.

But for real progress, you need to use the leverage of Recovery dollars to green private-sector construction: every private structure that gets subsidized in any way by Recovery Plan dollars should be built or retrofitted to LEED (or equivalent) standards. This is hardly radical; it is simply getting private property owners to act in their own self-interest (and the planet’s). Green Building Council members report break-even on retrofit costs in just two to three years.

Retrofitting is the lowest-hanging fruit for energy efficiency. Just ask Larry Summers: his Harvard revolving loan fund to retrofit campus buildings returned a whopping 35 percent annually—more than twice the University’s endowment!

Fix It First and Favor Mixed Use: All infrastructure spending is not equal. A “Fix It First” agenda that gives top priority to repairing existing roads, schools, and bridges will create many more construction jobs than building new ones. When you partially demolish something and then rebuild it, without having to buy new land, you devote much more money to work-hours. And in the case of highway repairs, the Transportation Equity Network has also shown that you can create more jobs for African-Americans who have been historically underrepresented in construction workforces.

You should structure some of the Recovery funds as a competitive pot explicitly designed to favor mixed use, affordable housing, and transit access. Take as a model California’s Infrastructure and Economic Development Bank. It rates applications to its Infrastructure Revolving Fund to give strong preference to projects that are located in already-developed areas with high unemployment or low income, include affordable housing and services such as day care or health care, and are accessible by public transit.

By forging a truly accountable and strategic Recovery and Reinvestment Plan, you can prepare America for major improvements in all the federal jobs, housing and transportation programs to be reauthorized over the next four years.

Greg LeRoy directs Good Jobs First, www.goodjobsfirst.org, and co-authored its “Uncle Sam’s Rusty Toolkit” and 2003 study that informed the Illinois disclosure law.

One Response to “Advice to Obama: How to Make the Recovery Plan Accountable and Strategic”

  1. Brent Pittman Says:

    Why will these strategies not solve economic and jobs problems?

    No need for more taxpayer bailouts and economic stimulus, if politicians would do the following: First, repeal all sales taxes and replace the lost revenue with an import tax/tariff on imported labor and manufactured goods. Second, repeal all local tax incentives that shift business costs to taxpayers and that create poverty wage jobs; or change these incentives to pay a living wage, minimum wage of $14/hour (parent with one child). Third, re-regulate banks and financial corporations. Fourth, enact a windfall profits tax on oil and gas companies; but, rebate this money through tax incentives for drilling and building refineries (including ethanol ones in other countries) as well as eliminating the $.54/gallon import tax on sugar cane ethanol. This strategy will slow these companies from using excess profits to enrich executives and to buy company stock. Fifth, increase taxes on fuel guzzling vehicles, wealthy individuals and corporations (eliminating corporate welfare and tax loopholes) to pay for the Wall Street bailout, the Iraq war and to pump more oil in Iraq for export. These strategies will lower the $11 TRILLION taxpayer debt leading to a stronger dollar that will reduce inflation and increase the number of good paying jobs with benefits for American citizens.

    Brent Pittman Brownsburg, IN

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