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Administration Tries to Knock Down AP Report

The Obama administration and the construction industry have pushed back hard against an Associated Press investigation that found that stimulus road projects aren't going to the communities hardest hit by unemployment. Transportation Secretary Ray LaHood said the analysis was "misguided" because it included projects from state lists that hadn't been approved by federal officials. "Basically, their work amounts to nothing more than an academic exercise," he wrote on his DOT blog. (Official name of Secretary LaHood's blog: Welcome to the Fast Lane.) 

Ken Simonson, chief economist for the trade group Associated General Contractors of America, said in a statement that construction jobs aren't tied to project sites because workers travel from site to site and because materials, such as concrete and steel, are produced elsewhere. In other words, projects in places where unemployment is low might be done by workers from towns where unemployment is high.

The AP analyzed the 2,800 projects the DOT had already approved, plus 2,700 other projects that states have said would receive stimulus money. Whether the projects will help areas with high job losses is a key question about the success of the stimulus package. According to congressional estimates, the highway projects are expected to create 765,000 jobs, about a fifth of all the 3.5 million jobs in the  administration's stimulus estimate. (See our previous reporting on how those estimates involve a lot of guesswork.)

Also, the Washington Post reported this morning that many states still have to lay off thousands of public employees and cut back social services despite receiving tens of billions of dollars from the stimulus package. In addition to a $53.6 billion fund to help states plug budget gaps, states are receiving $87 billion in Medicaid assistance and other funding for education and child development programs. The continuing shortfalls have caused some to wonder if the stimulus is enough.

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