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Stimulus plan for Michigan worth about $1.2 billion

Date Posted: January 30 2009

President Barack Obama's $825 billion economic stimulus plan, still a work in progress in Congress, would net Michigan about $1.2 billion in immediate construction work, according to the Congressional Research Service.

The Michigan-specific information was released last week to various media outlets around the state. While hardly final - Congress has not voted on the stimulus - numbers in the package show Michigan would get about $875 million in road work, $121 million for "transit capital," and $250 million for water and sewer work.

The report also says Michigan would separately get about $1.4 billion for education in the bill, and a large portion of that would help the construction industry by paying for school repairs.

Other portions of the "American Recovery & Reinvestment Bill of 2009" would fund science facilities and research, educational programs, extend jobless benefits, increase the availability of food stamps, and provide some $275 billion in tax cuts.

There was also $54 billion mentioned in the package to fund the development of alternative energies, upgrade the nation's electrical transmission grid, and for "green" energy purposes, but the information was not state-specific.

Some Democrats have argued that not enough money is being earmarked for construction work or for purposes that would immediately put people to work. Some Republicans argue that the package is too large and there is not enough accountability in the spending.

The proposal reportedly would save or create 158,190 jobs in Michigan, although those numbers are very hard to quantify. The Detroit Free Press reported that Michigan's share of $1.2 billion would be more than all but nine states would get, which would make proportionally in line with the state's population rank.

Overall in the U.S., the proposed infrastructure and public building investments would create or support almost two million jobs throughout the entire economy in part because of the economic slowdown and massive construction layoffs that have occurred, George Mason University economist Stephen Fuller testified before Congress on Jan. 22.

Fuller, who made the arguments during Congressional testimony on behalf of the Associated General Contractors of America, noted that the current stimulus plan's proposed infrastructure investments would create or support more than 1.85 million new jobs between now and the end of 2010. He said that would include over 620,000 construction jobs, 300,000 jobs in supplying industries and 930,000 jobs throughout the broader economy.

"The sharp decline in construction employment and activity we have seen over the past two years mean that the sector has plenty of capacity to quickly take on new projects," Fuller told the House Committee on Transportation and Infrastructure. "Two years ago these kinds of investments might have trickled out the door, but in today's climate, they are going to flood out into the economy."

The report said "spin-off" work associated with the spending could bring about the creation of 600,000 new jobs. Manufacturing in particular would benefit from such an infrastructure stimulus, seeing an increase of 252,000 jobs nationally. Domestically sourcing all manufactured materials in the new infrastructure investment would increase manufacturing job creation by one-third, the study added.

Terry O'Sullivan, general president of the Laborers International Union, said the $825 billion is thinking too small. "Any step forward is progress, but this level of investment falls far short of needs and fails to fully take advantage of the opportunity to put America back to work building the essential and long-neglected basics of our country," he said.