With the Obama team taking office and the Senate formally introducing the American Recovery and Reinvestment Act of 2009, momentum is building for the stimulus package. But with Americans taking a dim view of the bank bailout only months after it was approved, Congress and the new administration must ensure the stimulus bill really solves the problems. America needs more than an $875 billion morning-after pill for our fiscal difficulties: We need to redefine our infrastructure.
New York City offers a number of possibilities for the kinds of projects the stimulus package could fund. Here are some examples in three key areas.
With its dense population and old electricity transmission grid, the Northeast cries out for energy investment. As a large coastal city, New York offers a good road map to what many cities need: access to more renewable sources and investment in pathways and transmission to fix our failing grid.
Recycle Grease
President Barack Obama's proposal to "spend $150 billion over 10 years to advance the next generation of biofuels and fuel infrastructure" could help New York recycle the millions of gallons of waste grease generated in its nearly 1,000 school cafeterias, more than three dozen hospitals and scores of City University sites. Reclaiming this grease could create jobs and help power transit and school buses, ferries and much of the municipal vehicle fleet.
Investing in Wind
The more than 8.5 million residents on geographical Long Island (including Brooklyn and Queens, as well as Nassau and Suffolk counties) are precariously linked to the North American grid. Queens has suffered two major blackouts in the last five years. Yet, so far the whole island has done little to tap the resource of offshore wind.
As "Cape Wind" proposes, Queens, Brooklyn and the rest of New York City should be a primary beneficiary of large-scale investment in wind power. In addition to the massive construction needed to build and install the windmills, the investment in new and more reliable transmission capacity would boost places like Oak Point in the Bronx, making them a focal point of next generation of infrastructure.
Freight Connections
Nestled between Port Morris and Hunts Point, Oak Point is across the water and a bit northwest of LaGuardia Airport. This area of the Bronx is already the site of a number of key connections between Long Island and the continental United States, including the Triboro and Hell Gate Bridges and underwater transmission cables linking the Bronx and with power plants in Queens.
Now Oak Point could become a focal point for new Cross Harbor Freight Transportation investments under consideration by the Port Authority.
This underutilized railroad yard has been trapped in political fighting for more than a decade, but it should become a waterfront rail hub that could serve as a national model for other urban areas.
On the shore, it could include a barge-to-rail transfer facility for trucks, containers, and ferries to North Brother Island and even to Lower Manhattan. Below ground, power tubes and transmission lines would better connect Long Island and the rest of North America. This would help avoid the energy supply interruptions that hit seven states in 2003 and the grid failures that caused the Queens blackout of 2006.
A real infrastructure plan would build in redundancy and leave extra capacity for the next generation of communications and energy innovation.
The stimulus package calls for the creation of a National Infrastructure Reinvestment Bank, seeded with $50 billion over its first 10 years. A number of major arteries in New York City could be models for using these funds creatively.
Connecting Brooklyn to the World
Atlantic Avenue is a critical transportation link whose best days lie ahead. As Brooklyn Heights slides down to Red Hook, the avenue's 19th century rowhouses are still home to many small businesses and residents. Buses running along this busy corridor connect downtown Brooklyn to the waterfront.
Atlantic Avenue ends at Upper New York Bay. Across the harbor, lie the huge towers of Lower Manhattan and Jersey City. Atlantic Avenue could help link those centers and downtown Brooklyn and Long Island. Historic street cars could connect the New York City Transit Museum with Brooklyn Bridge Park.
With the Brooklyn Queens Expressway overhead, the foot of Atlantic Avenue could serve as a hub for cross-harbor shipping via truck ferry or barge to New Jersey ports. An all-water connection to Long Island from New Jersey would mean fewer trucks rumbling across Canal Street or the Staten Island Expressway.
With major rehabilitation planned for the Brooklyn Bridge in 2010, more traffic will use the already overburdened Manhattan Bridge. Plans to begin construction on a new Goethals Bridge in 2012 may also exacerbate congestion woes.
While a truck ferry may be somewhat expensive to operate, it could offer more consistent travel times than jammed road bridges. That means lower costs for fuel, fewer noxious truck emissions, and less wear and tear on bridges and highways.
If the vision for better mobility along the East Coast includes a network of freight ferries (often called "Short Sea Shipping") dozens of new ferry and barge transportation hubs will need to be created at places like 58th Street in Brooklyn along Newtown Creek in Queens and even 34th Street in Manhattan.
Infrastructure may be the backbone of development, but the muscle is all labor. While contractors and builders lobby for expansion and upgrade of bridges, highways and waterfronts, large-scale physical development takes time to ramp up. In the meantime, the glut of office space only grows as its value shrinks. But it doesn't have to be this way.
Cubicles to Classrooms
A labor force must be nourished with education and training. Professional, technical and vocational skills are all needed. In New York schools scramble for space.
So, let's convert commercial buildings into educational facilities. What once were offices can become classroom. Former trading floors can be school auditoriums.
The stimulus plan seeks to invest in "green technologies" such as energy efficiency, weatherization and renewable energy development. We could jumpstart the innovation by giving owners of private buildings grants to cover some portion of their retrofit costs, provided these buildings are adapted for schools that will provide related instruction, research and training.
Preparing for the New Economy
While it may take a while for Americans to get back to work, let's make it easy for them to go to school in the meantime, with grants and loans for promising fields of study. Labor unions and small businesses could receive payroll tax credits or grants to create or expand apprenticeship programs. After all, there is a good chance that the labor force we need 10 years from now may look very different than the one we have right now.
The stimulus will succeed only if it brings new funding mechanisms, both to seed its programs and to help maintain our public infrastructure and public institutions for the future.
With the sharp decline in gas prices, there is no better time to increase a federal tax on fuels to help fund the stimulus and better maintain our infrastructure in the future. According to the Energy Information Administration, U.S. cars and trucks consume close to 390 million gallons of gasoline per day. Every 15-cent a gallon increase in the federal gas tax would generate $20 billion in revenues a year. With a 50-cent tax increase, we could generate well over $600 billion in the first 10 years. After the stimulus is paid off, we could start to repeal the tax.
Ultimately our infrastructure isn't just concrete and steel embedded. It is also the power we generate and the people who keep it all moving forward. Together they enable us to enjoy one of the highest standards of living in the world. To keep that, though, requires hard work. And because our infrastructure has been so neglected - even in the good times - we have to be especially careful about the investments we make in the years ahead.
Carter Craft, a licensed U.S. Coast Guard captain, is an urban planner working in the private sector.
"What is good for GM is good for the country!" -- once the battle cry of U.S. capitalism is now a mumbled query that sounds something like, "What is good for the U.S.? What is good for GM?"
As America's auto manufacturers deal with the largest financial crisis in their history, officials are focusing on how to keep the industry afloat regardless of brand. Hence, the catchphrase, for some, now goes: "What is good for the automotive industry is good for America -- with or without GM."
America needs large scale investment by the federal government that will promote sustained development of public services and private enterprises. Simply lending funds to distressed companies, such as General Motors and Chrysler, to keep them operating will not stimulate economic growth. An innovative program of vouchers to promote mass transit, especially the manufacturing of clean and green buses, would spur investment while saving jobs and helping the environment.
Deteriorating economic conditions in the region have put New York's Metropolitan Transportation Authority in a financial bind. A December report on MTA financing by the Ravitch Commission, named for its chairman, Richard Ravitch, said the situation has become "calamitous."
The MTA faces significant gaps -- of a billion or more -- in its operating budgets for each of the next four years.
By law, the authority's budget must be balanced, meaning it has proposed substantial fare increases, major service reductions, lowering administrative costs, personnel cuts, longer maintenance cycles and an interagency loan.
Uncertainty about the MTA's funding creates uncertainty among the suppliers of the equipment the authority buys. Uncertainty about the capital projects the MTA can fund compounds the already severe uncertainty that investors have. This is exactly what the U.S. economy does not need right now.
Keep in mind that New York's population of 8.2 million is expected to grow to 9.2 million by the year 2034. The Ravitch report, while not advocating specific capital projects, argues for an expanded bus system based on Bus Rapid Transit, which attempts to move passengers more quickly and comfortably through a system of buses-only lanes and other improvements. "Expanding the bus network is the only realistic approach," the commission said.
Clean buses that operate in a rapid transit mode will be the key to the commercial viability of the New York region. The problem is finding the money to purchase them.
To help surmount this obstacle, I suggest the federal government issue $25 billion of Clean Fuel Vouchers that municipal and state authorities could use to buy cleanly powered buses over the next five years.
The $25 billion figure is a quick calculation of what it would cost to replace the 64,350 gasoline powered transit buses on the road at the end of 2006 with alternative fuel buses, with $500,000 as the cost of each new bus. Twenty-five billion dollars over five years ($5 billion per year) would be a significant increase in the slightly more than $1 billion nationwide the Federal Transit Administration has currently budgeted for capital spending on transit buses.
It also would build on an existing commitment by federal, state and municipal governments. Between 1995 and 2006, the number of transit buses using alternative fuels increased from 2.8 percent to 16 percent. In its 2009 budget, the Federal Transit Administration said it is "striving to increase by 2 percent per year the deployment of energy efficient and low emission technology vehicles in the transit industry." This kind of fiscal stimulus package would significantly ramp up the 2 percent growth in clean fuel buses on the road.
As of 2007, about 21 percent of transit buses operating in New York City were powered by either compressed natural gas or diesel/electric. The MTA's proposed capital program calls for the purchase of 2,492 new buses. Of those, 1,544 will use clean fuel technology.
A commitment to these buses would create investment opportunities for manufacturers and jobs for the unemployed.
Nationally, the voucher program would employ autoworkers and activate plants now idled by a precipitous drop in car and truck sales. It would spur banks to loan money for mass transit production. Replacing diesel powered buses with hybrid/electric ones or vehicles fueled by compressed natural gas also would reduce carbon monoxide and nitrogen oxide emissions.
This is how the voucher plan would work: Transit authorities would receive vouchers they could use to buy clean fuel transit buses within five years. Once a transit authority places the order for a bus, the voucher would be pledged to the bus manufacturer. The bus manufacturer could use the vouchers as very high quality collateral to raise working capital during the production stages.
The vouchers could also be bought and sold. If the MTA, for example, decided it valued operating income over an expansion of its clean fuel bus fleet, it could sell some or all of its vouchers. Because the vouchers would be federal obligations, there is no risk they wouldn't be honored.
Once sold, the voucher could be used for any hybrid/electric, electric or fuel cell vehicle, not only transit buses. Those buying the vouchers might be other municipalities, rental car companies, taxi fleet operators, trucking companies, equipment-leasing companies, and school bus operators. The secondary market for vouchers would help those governments that cannot effectively use their vouchers. It also would broaden the fiscal stimulus while keeping it focused on demand for automotive products.
The vouchers will create a flow of private capital to the sector of the automotive industry that designs, builds and maintains green machines. This could help General Motors.
Why does that matter? The survival of many firms is linked to GM's ability to buy and pay for the goods and services they produce. GM, Ford and Chrysler currently owe about $60 billion to their suppliers. Not only must these receivables be secure, but suppliers must be able to expect timely payment for future sales to the auto companies. Trying to stimulate the U.S. economy while the core of our manufacturing base is in financial distress would be like bailing out a leaking ship with a Dixie cup.
GM has valuable technologies, products, designs, processes and patents along with engineering talent and a skilled labor force. Unfortunately, all of this is trapped in an ossified enterprise. For the company to survive, these assets must be redeployed.
When an earthquake destroys cities and villages, governments around the world mobilize resources to save lives and rebuild wells, schools and hospitals. A financial quake has struck and now is the time for a massive financial lift. To emerge from this worsening global recession each of the world's economically powerful countries must make a commitment to invest significant public funds in sustainable development.
A massive investment in clean fuel mass transit would be consistent with stimulating the U.S. economy, improving air quality, lowering urban road congestion, increasing opportunities for mobility in and outside of the cites, and making U.S. cities the premier showcase for green urban transit. Vouchers can help accomplish that. At the same time, they will increase demand in a key sector of our economy.
Charles A Stone is a professor of finance at Brooklyn College.
While the economic picture is grim across the country, New York City has been especially hard hit in recent months. The city's heavy dependence on Wall Street revenues has left us facing a projected budget shortfall of nearly $4 billion. Adding to the city's crisis, a quarter of the shortfall is due to state cuts resulting from Albany's crippling financial difficulties.
The crisis highlights the danger of the city's economic over-reliance on Wall Street. Even when times are good, only a few New Yorkers reap economic windfalls. When times are bad, the entire city suffers.
For all the pain it is causing, though, the sagging economy presents us with the chance to rebuild our economy in a way that prevents similar economic crises in the future. The federal economic stimulus package before Congress presents an opportunity to build a greener and more equitable economy. Urban Agenda, convener of the New York City Apollo Alliance, urges Congress to fund projects that will create high-quality, "green collar" jobs and help make New York City more environmentally sustainable.
A stimulus package for New York City must focus on increasing investments in public infrastructure -- rehabilitating and retrofitting schools, buildings and mass transit systems - not on giving tax breaks. Currently, the Obama administration is proposing $150 billion in tax cuts for businesses. However, prominent economists, including an advisor to Republican presidential candidate John McCain, note that every dollar spent on public infrastructure projects generates $1.50 in economic activity, while tax breaks lack this "multiplier effect." Every $1 in tax cuts produces less than $1-- and sometimes as little as 30 cents -- of economic activity.
While we need to act quickly, we must also act responsibly. It is not enough to just create "green" jobs. Instead, we must create "green collar" jobs that pay well, provide health benefits and offer opportunities for career advancement while improving our environment.
This is key. Creating jobs that pay poorly and do not provide health benefits or pathways out of poverty will lead to an underclass of workers employed in green jobs but unable to make their way into the middle class. If we consider both environmental benefits and wage and job standards, we can have jobs that will help the resurgence of the middle class, strengthen our economy and make New York City a leader in sustainability.
The NYC Apollo Alliance has compiled a list of recommendations for evaluating projects to ensure that we maximize the potential of our green collar workforce. (The full document can be found here.). Projects funded with stimulus dollars should:
Using these criteria to evaluate projects proposals will help rebuild our economy and create a greener, more sustainable city. For instance, using federal stimulus funds to create an "Efficiency Matching Fund" providing a 100 percent federal match for state-approved energy efficiency programs would help quickly channel funds to green job development. Every $1 invested in such programs saves $2 to $4 in energy costs for consumers, freeing up additional consumer purchasing power. Energy efficiency programs also bring us closer to environmental sustainability.
The economic stimulus must fund training and readiness programs to ensure there are enough skilled workers ready to do these tasks. The Consortium for Worker Education, the Association for Energy Affordability and the New York Industrial Retention Network developed a plan to integrate economic development and workforce development to promote energy efficiency. With funding, this proposed Green Jobs Center would include a training center to assess, train and place over 2,700 workers in the energy efficiency industry. The center also would provide business services for over 900 businesses seeking to expand or enter the energy efficiency market over a three-year period.
Finally, to ensure that stimulus spending creates jobs in the near future and new industries in the long term, it must include language that allows cities and states to give preference to local companies when they purchase goods and materials used in federally funded capital projects. This will nurture local green manufacturing and reduce the carbon footprint of projects by removing the need to transport products long distances.
The Wall Street disaster offers us the opportunity to build a new economic future. Wisely invested, the federal stimulus can generate the green collar jobs that will rebuild our middle class and create a more sustainable environment for generations to come.
J. Mijin Cha is director of campaign research at Urban Agenda, convener of the Apollo Alliance. The alliance is holding a public forum on Feb. 2nd to discuss the New Apollo Plan, the economic stimulus and New York City. For more information, visit www.urbanagenda.org