While President-Elect Barack Obama has directed his economic recovery team to develop a plan to invest in infrastructure nationwide, create millions of jobs, modernize schools, and make buildings more energy-efficient, both the details of the plan and the extent to which municipal bonds may play a role are unclear.
Obama announced the plan Saturday during a radio address on the economy from Chicago. He said he plans to further detail this initiative in the coming weeks, and hopes to work with Congress to pass it - likely as part of a comprehensive economic stimulus package - as soon as he takes office in January.
Several members of the president-elect's transition team could not be reached for comment on the plan yesterday. Observers and market participants said details probably are not available, as the plan is still being developed.
"I'm not even sure if the president-elect has finally settled on what he wants to do," said G. Edward DeSeve, a government professor at the University of Pennsylvania. "I think they have a menu, and at this point, what they have to do is decide what they're going to have for dinner."
In his radio address, Obama emphasized that state and local governments receiving government funding need to be prepared to allocate it quickly to ready-to-go projects.
"We'll set a simple rule - use it or lose it," he said. "If a state doesn't act quickly to invest in roads and bridges in their communities, they'll lose the money."
Meanwhile, Manny Diaz, the president of the U.S. Conference of Mayors and the mayor of Miami - who is under consideration to head the Department of Housing and Urban Development - as well as New York City Mayor Michael Bloomberg, Chicago Mayor Richard Daley, and Los Angeles Mayor Antonio Villaraigosa, yesterday called on Obama and Congress to provide funding for ready-to-go infrastructure projects.
The mayors released a report from 427 cities detailing a total of 11,391 infrastructure projects with a $73 billion price tag, which they said would create 847,641 jobs.
That compares to $136 billion of ready-to-go infrastructure projects that were cited by Pennsylvania Gov. Ed Rendell and Vermont Gov. Jim Douglas last week at their meeting with House Speaker Nancy Pelosi, D-Calif., and Rep. George Miller, D-Calif., chairman of the House Democratic Policy Committee. Obama met with them and other members of the National Governors Association at a meeting in Philadelphia the next day.
The mayors joined House Ways and Means Committee chairman Charles Rangel, D-N.Y., House Transportation and Infrastructure Committee chairman James Oberstar, D-Minn., and Congressional Urban Caucus chair Chaka Fattah, D-Pa., to release their report on projects they say could be started and completed within two calendar years if emergency federal funds are made available.
The projects are from 10 different sectors including community development block grants, transit, highway infrastructure, green jobs, school modernization, public safety, and public housing.
Bloomberg said that because cities have projects ready to move that have been locally vetted, the economy would see real growth if federal funds are made available.
"Monies invested through programs like infrastructure generate $1.50 or more per dollar spent. That's a welcome figure for anyone concerned about balancing a budget, making a payroll, funding needed services, or any combination of the three," Bloomberg said.