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That's where the real waste is going to be. There's $30 billion for highways, which would be funneled through state transportation departments that love to build unsustainable sprawl roads to nowhere. There's $4.5 billion for the Army Corps, which loves to build water projects that destroy wetlands and induce development in vulnerable floodplains. There's $14 billion for school modernization, $2 billion for rural-business loans, $8.4 billion in "state and tribal assistance grants" and who can say how it would all be spent?
Well, Congress could say. For example, Commerce Committee chairman Henry Waxman inserted language into the House version of the package limiting energy grants to states that give their utilities incentives to promote energy efficiency. If the Federal Government is going to spend the money, it ought to promote federal priorities. And Congress could make sure the money is spent productively and isn't spent counterproductively by attaching a few general strings to the stimulus dollars. For instance, there should be "fix it first" provisions to prioritize repairs to highways, levees and other infrastructure over new construction, which would create jobs while reducing future federal obligations. We do need to rescue states to prevent them from raising taxes and firing workers, but just as it was crazy to let bailed-out banks and automakers spend our money however they pleased, it's just as crazy to give carte blanche to bailed-out states.
The real question, then, is not whether Obama should push to use the stimulus to promote his long-term priorities, but whether he will. He has said repeatedly that he wants to invest our children's money wisely, but he's also anxious to blast money into the economy quickly while attracting bipartisan support and letting Congress work its will, so it's not clear how hard he'll push to fund his long-term agenda. But Obama should ignore the partisan gripes about the stimulus becoming a "Christmas tree." Congress is about to toss almost $1 trillion into the economy, which means that any stimulus is going to be a Christmas tree, no matter where the gifts are hidden. And in November, America chose its Santa. This might be his best chance to decide who gets the goodies and who gets lumps of coal.