President Bush yesterday said he would oppose any attempts to enact a second economic stimulus package that includes funding for transportation projects after meeting with some of the nation's governors who support the idea.
"He didn't think he would be interested," Washington Gov. Christine Gregoire, who was at the meeting, said of Bush's reaction to the proposal.
Gregoire added that Bush said one reason for his opposition is that he wants to see how a recently enacted economic stimulus bill works. She spoke on the last day at the National Governors Association legislative meeting here.
White House officials could not be reached for comment.
The Economic Stimulus Act of 2008 was signed into law Feb. 13. It will provide a $600 tax rebate to low and middle income taxpayers, tax incentives to spur business investment, and an increase in the limits imposed on mortgages eligible for purchase by government-sponsored enterprises, or GSEs.
But many governors contend the law will not do enough to help the nation's flagging economy.
"I think the first stimulus package that was passed was woefully inadequate," New York Gov. Eliot Spitzer said at the NGA conference Sunday, adding that spending on transportation provides jobs immediately and improves highways and transit in the future.
Funding infrastructure projects "would and could begin an economic resurgence," Spitzer said. "There are many projects that could be taken off the shelf, the regulatory approval is there; all we need is the capital from [Congress and the administration] for us to move forward."
This week the Senate is expected to begin debate on a second stimulus bill geared toward providing aid to homeowners at risk of foreclosure. But it is unclear if Senate Majority Leader Harry Reid, D-Nev., who unveiled the bill Feb. 14, will support adding transportation provisions to the legislation. Democratic governors were to meet with House Speaker Nancy Pelosi, D-Calif., late yesterday and infrastructure was expected to be on the agenda.
Transportation Secretary Mary Peters, who addressed the governors Sunday, hinted at Bush's opposition to transportation spending as a way to boost the economy, after being asked by Spitzer if she would help support transportation funding in a second stimulus bill.
"Transportation dollars, even with projects that are on the shelf and are ready to go today with environmental approvals, spend out very slowly," Peters said. "In fact, during the first year of a project's authorization, they spend out at about 26% of the overall value of the project. In the first stimulus package we were looking at timely, targeted, and temporary means, [so] we ... elected not to put infrastructure on the table."
She added that, in any future stimulus plan, Congress should look at the most effective way to boost the economy, which may or may not consist of funding transportation projects.
"We have to look at the opportunity cost ... associated with every [tax] dollar ... and if those dollars could be put to a higher, better, faster economic stimulus opportunity," Peters said. "I would hope that we would explore those."
Spitzer argued that 26% in the first year is a "pretty good" compared to the first stimulus plan because the tax rebates won't be provided until June "where as these projects would go right into construction, right into jobs, right into local communities."
About "26% of the multibillion projects we are talking about would give us infrastructure at the end of the day rather than more consumer spending and really would be, in my view, a better economic investment," Spitzer said. "I encourage you to be an advocate for this."
In her remarks to the governors, Peters also urged them to join her in calling for Congress to loosen federal restrictions on tolling roads, in order to help attract $400 billion in available private investment and reduce congestion, as lawmakers begin looking into rewriting the current transportation funding bill, which expires on Sept. 30, 2009.
However, some of those present, includingArkansasGov. Mike Bebee and New Jersey Gov. Jon Corzine said they were concerned that Peters' advocacy of increased tolling and public-private partnerships would translate into a decrease in federal transportation funding to states.
Peters said rather than increasing federal funding, the nation should better allocate current transportation dollars and also tap into private financing through P3s. She also said a reduced federal role in the transportation program will give states and local governments more control.
But Corzine argued that tolling and P3s will not be enough to meet the nation's needs and an increase in federal funding will be needed.
Spitzer believes the Bush administration has used the promise of giving states more control in transportation decisions as an excuse to not provide needed additional funding.
"That is the sort of vision that is destroying the infrastructure of this nation," he said.