President Barack Obama’s economic stimulus program spends heavily on infrastructure, which is fitting since the construction industry has spent heavily on politics.
Dozens of well-connected industries won billions of dollars in the American Recovery and Reinvestment Act signed this week by Obama—borrowed money that will be repaid by future generations—and they all lobbied heavily for their handouts and for the bill’s passage. The construction industry deserves special attention because it got special consideration in the bill.
While every corner of the construction industry pushed hard for the stimulus and will profit greatly from it, a good place to begin is with the Portland Cement Association (PCA), the Capitol Hill-based trade association for the makers and sellers of Portland cement, the key ingredient in mortar and concrete.
It’s pretty obvious what sort of stake the cement industry has in a bill that borrows an unprecedented sum of money and dedicates large chunks to infrastructure spending. By official estimates, the stimulus bill spends $87.9 billion on infrastructure and sends another $144 billion to state and local governments, which are the No. 1 customers of concrete makers, amounting to nearly half their business.
The PCA found that the stimulus projects requested by the National Conference of Mayors would use more than 10 million metric tons of cement. The PCA, rejecting more optimistic forecasts by other economists, also estimated that this bill alone would provide more than 20% of their business by 2010, not counting additional ongoing federal, state, and local spending on infrastructure.
With so much new business at stake, it’s no wonder the cement lobby ramped up its efforts. As of last year, the PCA was already spending $1.4 million per year on lobbying with a team that includes former assistant secretary of Energy John Shaw, and Chad Bradley, the former chief of staff for Sen. Jim Inhofe, R-OK, the top Republican on the Senate Environment and Public Works Committee (EPW).
This year, the day after the new Congress was sworn in, the PCA hired lobbyist Edmund Graber, specifically to lobby on the stimulus bill. Graber is a prolific political donor, in this last cycle lining the pockets of 23 lawmakers, including all the crucial infrastructure lawmakers. Of course, PCA also has its own political action committee.
Between PCA’s lobbyists, employees, and PAC, politicians brought in $128,600 in the last election alone. Recipients among EPW members include Inhofe and chairwoman Barbara Boxer, D-CA, and a top Senate appropriator, Sen. Dick Durbin, D-IL. And this is just the trade association. PCA’s members—the cement companies themselves—have their own lobbyists, PACs, and employees who fund politicians’ campaigns.
Then there is the rest of the construction industry, all of which is now set for a pretty healthy payday at the expense of future taxpayers. Of course, the stimulus program isn’t a simple transfer of wealth from taxpayers to cement makers and road builders.
These industries do real work for the money—work that it is certainly more useful than most government expenditures. But why should they win the lion’s share of the largest single spending bill in the history of the world?
The argument is that infrastructure spending, especially road-building, is uniquely stimulative. More roads and more lanes, we’re told, make us more efficient by reducing time and fuel wasted in traffic.
But look at who, besides the road builders, always lobbies for more roads – developers. In Northern Virginia, for example, homebuilders funded most of the 2002 and 2004 campaigns to raise taxes to pay for more roads.
If they build more homes out in Loudon Co., and we pay for more roads, there’s no less traffic. And everytime we build more roads, they will build more homes.
The demand for living in outer suburbs while working in the city is not inelastic—it is affected by traffic. Without more roads, people who work in DC will move closer in, or people who live farther out will work farther out.
Subsidizing roads doesn’t really alleviate traffic, it mostly modifies behavior—and subsidizes the developers, road builders, and cement makers (cement is a more durable substance than asphalt for roads).
Yes, many roads and bridges need repair, but are 12-figure spending sprees on infrastructure—in addition to the standard highway and sewer bills Congress will pass later this year—really about stimulating the economy, or are they about subsidizing the well-connected?
Examiner columnist Timothy P. Carney is author of “The Big Ripoff: How Big Business and Big Government Steal Your Money.”
