The stimulus: One year later
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This story was written by Harrisburg Bureau Chief Tom Barnes based on his reporting and that of Eleanor Chute, Rich Lord, Karamagi Rujumba and Bill Toland.
CARLISLE -- As he shivered in a cold wind, standing by snow piled on the side of the rebuilt Route 34 bridge, contractor David Maugle said that as far as he's concerned, the first year of President Barack Obama's federal stimulus program has produced impressive results.
The $787 billion economic recovery program, which turned 1 year old last week, has funneled $1 billion to Pennsylvania to rebuild 326 roads and bridges, including this 200-foot-long bridge over the Conodoguinet Creek in Cumberland County, 20 miles southwest of Harrisburg. A year ago, the 80-year-old structure was in urgent need of repairs.
Mr. Maugle is vice president of J.D. Eckman Construction Co., which is doing seven projects in Pennsylvania. The 34 employees who worked on this bridge for nine months in 2009 were part of a total of 6,400 workers who were on road/bridge jobs in October, the high point of infrastructure employment in Pennsylvania before winter weather curtailed much of the work.
He said that not only has his workforce grown by 10 percent over the last year, but Pennsylvania-based subcontractors and companies that sell him materials like concrete, steel and asphalt also have benefited.
The federal stimulus program was the first major initiative of Democrat Obama, who took office just a month before it went into effect on Feb. 17, 2009. Mr. Obama said he had to do something strong to try to resurrect the national economy after it hit bottom in the fall of 2008, with thousands of people losing their jobs and their homes and many large banks verging on collapse after making bad loans.
Overall, $26 billion of the federal pie is being spent in Pennsylvania.
Not surprisingly, Gov. Ed Rendell, an outspoken Democrat, praised the president last week for pushing for the stimulus program, which Mr. Rendell gave an overall rating of B+ in Pennsylvania.
The infrastructure segment of the program deserved an A rating, Mr. Rendell contended. All 362 projects have been bid (one must be rebid this week), many are under way and some completed, such as the Route 34 span. About $800 million has been spent so far.
"We could do better, but I think we've done well overall," he said Wednesday.
He gave the state "an A or A-" on stimulus funds used to improve education, though not as good a rating on wastewater projects. The state got $1.3 billion for infrastructure work, with $200 million for sewer systems and $100 million for mass transit, in addition to the road and bridge funding.
"The U.S. House Transportation and Infrastructure Committee has ranked Pennsylvania as sixth best in the nation for getting stimulus projects going, and the highest-ranking big state," said PennDOT spokesman Rich Kirkpatrick.
State and national Republican leaders have panned the Democratic stimulus initiative.
"When faced with an extreme economic downturn, President Obama used the crisis as a means to his liberal ends, and with the help of his Congressional allies, forced his failed stimulus package on America," charged GOP National Chairman Michael Steele.
Pennsylvania GOP Chairman Robert Gleason attacked U.S. Sen. Arlen Specter, who is now a Democrat, for voting for the Obama stimulus bill a year ago -- when he was still a Republican. Mr. Gleason criticized the stimulus as "a chance for Sen. Specter and Democrats to go on a spending binge under the false premise of economic relief," and claimed it hasn't produced nearly as many jobs as it was supposed to do.
Mr. Gleason is hoping Republican Senate candidate Pat Toomey will win the Specter seat in November.
Republican gubernatorial candidate Tom Corbett said that in 2008, there were 344,000 Pennsylvanians out of work, with a jobless rate of 5.4 percent. In 2009 unemployment had risen to 527,000 in Pennsylvania and the rate had jumped to 8.3 percent, he said, questioning the plan's effectiveness in putting people back to work.
But the combative Mr. Rendell dismissed such GOP comments as "a political attack." He praised Mr. Specter for voting for the program, saying state and national unemployment rates would have been much worse without the stimulus. He said it put a high of 11,000 people to work in Pennsylvania during October, before bad weather put a lot of construction on hold.
The New York Times last week cited three prominent economic research firms as agreeing the year-old program was producing many jobs nationally. IHS Global Insight (which state officials use for economic projections), Macroeconomic Advisers and Moody's Economy.com all estimated the program has added 1.6 million to 1.8 million new jobs so far and ultimately could add up to 2.5 million jobs before it ends late this year.
Mr. Rendell said the Eckman crews finished work more than 100 days early on the Route 34 bridge, which he nicknamed the "Biden Bridge," because Vice President Joe Biden traveled to Carlisle last February to mark the start of the rebuilding job.
PennDOT District 11 last week gave an update on some projects in its three counties -- Allegheny, Beaver and Lawrence:
• Fort Duquesne Bridge rehab, Allegheny County -- a $23 million project with $5.8 million spent so far, work done by Trumbull Corp. of Pittsburgh.
• Route 51 Beaver-Rochester Bridge, Beaver County -- a $10 million project, now 35 percent complete, work being done by Mascaro Co. of Pittsburgh.
• Route 22/30/60 interchange, Allegheny County -- cost of $13.7 million, now about half done, work led by Gulisek Construction of Mt. Pleasant.
• Route 422 project, Lawrence County -- cost of $2.36 million, almost all spent, work done by Lindy Paving Inc. of New Castle.
The stimulus isn't just for road and bridge projects, although they have the highest profile. Mr. Rendell said another aspect is a federal tax cut, $400 for an individual in 2009 and $800 for married couples; 4.7 million households in Pennsylvania got a tax cut.
Some funds are going for "safety net" extensions, such as added money for food stamps and unemployment compensation for jobless workers, he said. A million people in Pennsylvania have received a total of $1.7 billion in this category.
And the 2009-10 state budget has benefited with $2.7 billion in stimulus funds, the governor said. If not for that money, as many as 37,000 state workers would have had to be laid off, state taxes seriously increased or the state's basic education subsidy for school districts cut in half, which would have led to thousands of teachers being laid off.
In addition to money going to states, the stimulus is providing research grants for which universities can compete. University of Pittsburgh Vice Chancellor Paul Supowitz said Pitt has gotten $125 million in such grants.
Without it, "We would have had a huge hole in our budget," he said last week. Stimulus funds, combined with a salary freeze, helped keep tuition increases low and stop layoffs, he added. Stimulus funds also have expanded Pell grants, which help students pay their higher education bills.
The city of Pittsburgh also has benefited, with $20 million in stimulus money. The funds have gone for street resurfacing, repairs to walls and steps, ballfield lighting, work to repair and prevent landslides, an energy audit for the City-County Building, summer jobs for youths and refitting 33 trash trucks to use biodiesel fuel.
Allegheny County has received funds also, $54 million, going for prevention of homelessness, workforce investment and roads/bridges.
"From what we see, [the stimulus] is meeting its goals," said county spokesman Kevin Evanto. "It was set up to create and preserve jobs and assist people who need help in the economic downturn, and it is doing that. The federal government has specific rules to track how the money is being used, and our goal is to make sure we are playing by the rules."
Much of the stimulus money went to universities and public agencies, to be filtered then to private businesses. The program also sent millions directly to a number of Western Pennsylvania businesses, including labor and construction firms, engineering companies and high-tech research partnerships, primarily.
The money sent to the high-tech companies has been especially valuable, as these firms operate on a shoestring budget with small staffs, relying heavily on grant money to fund research and development.
One of those tech firms was CMU spinoff Blue Belt Technologies, which received $150,000 toward the development of a new handheld bone-cutting medical saw.
"The recently awarded stimulus funding is being directed toward technical development and validation for our core product," said Craig S. Markovitz, CEO of Blue Belt. "We have been able to use the funds to support salaries as well as fund the purchase of new equipment, testing services and contract manufacturing."
Another CMU spinoff to see Recovery and Reinvestment Act monies was Oakland-based ATRP Solutions, a company that designs custom-made polymers for industrial applications. The process it uses -- atom transfer radical polymerization, the process for which the company is named -- can be done on a small scale for now.
"As with every new technology, implementing the technology at an optimal scale" is the end goal, said company CEO Patrick McCarthy. "We need to scale it another thousand-fold."
Bayer MaterialScience LLC was the beneficiary of a $750,000 stimulus fund grant doled out by the U.S. Department of Energy, which will go toward ongoing research into high-tech wind turbine blades.
"The wind industry has indicated that development of stronger, lightweight composite technology could lead to as much as a 35 percent increase in turbine energy output," said Mike Gallagher, director of the government services group at Bayer MaterialScience.
Some of the biggest local projects are benefiting out-of-state companies. A number of contractors, for example, were hired to participate in the continuing reconstruction of the Charleroi Locks and Dam on the Monongahela River, an $84 million project being coordinated by the U.S. Army Corps of Engineers.
To date, the biggest winner is C.J. Mahan Construction Co. of Grove City, Ohio, which took home $28.3 million to design the new walls. A civil engineering firm from Washington state was hired to do riverbed sampling and analysis, while Bergman Associates Inc. of Rochester, N.Y., is planning the construction of a dam gate.
Locally, Trumbull Corp. of West Mifflin and Brayman Construction of Pittsburgh are sharing in a $17.4 million excavation and construction contract at the Charleroi site.
There are other, lesser publicized types of stimulus grants as well, such as:
• $22.8 million for wind turbine development, including a Cambria County company that had to lay off 79 people in November when new orders fell. It will hire them back and add 50 more workers thanks to stimulus funds, Mr. Rendell said.
• $253 million in home weatherization funds. Mr. Rendell traveled to Carnegie last week to meet with Jim and Bernice Culligan, who are receiving funds to make their home more energy efficient.
• $128 million for the Keystone Initiative for Network-Based Education and Research, a coalition of Pennsylvania colleges, health care groups and economic development agencies seeking to improve broadband service in the state. When completed, the fiber-optic cable network will extend 1,700 miles through 39 counties in the state, including 22 counties that are now unserved or underserved by affordable broadband Internet service.
"Fast, reliable Internet can help keep communities safer, open doors for small business and provide job training and skills to more Americans," U.S. Commerce Secretary Gary Locke said in a visit to Pittsburgh last week.
First Published February 21, 2010 12:00 am