Show us the money: shovel-ready projects set to go

By Nick Carey - Analysis

CHICAGO (Reuters) - If President-elect Barack Obama's economic stimulus plan makes it through the U.S. Congress, money designated for infrastructure could start flowing within months into scores of "shovel-ready" projects stalled due to a lack of funds.

But accessing cash is just the first step. Industry experts warned that a lasting solution to America's infrastructure problems -- an aging, congested highway system, for starters -- will take far longer to implement.

"We must save the patient first, then think about long-term strategy," said Richard Little, director at the University of Southern California's Keston Institute for Public Finance and Infrastructure Policy. "If the objective is to create jobs, we should focus on projects that are ready to go.

"But, within a year, we'll start to see demands for a comprehensive national approach to infrastructure," he added.

Before any money can be spent, however, Obama's stimulus plan -- up to $775 billion including as much as $310 billion in tax breaks for businesses and the middle class -- must make it through Congress.

A large portion would go toward infrastructure -- highways, bridges, railways -- which would make this the largest such plan since the U.S. Interstate highway system was created under President Dwight Eisenhower in the 1950s.

Obama has said he wants to sign a bill approving his plan shortly after taking office on January 20.

As the Democrats are a few votes short of the 60 required in the 100-seat Senate to advance legislation, the Republicans could slow passage of the bill and have raised concerns about waste, warning the cost could reach $1 trillion.

"Can the Republicans hold things up for a while? Maybe," said Polly Trottenberg, executive director of Building America's Future, a group founded by New York Mayor Michael Bloomberg, Pennsylvania Governor Edward Rendell and California Governor Arnold Schwarzenegger. "But the competing pressure is Americans are scared, so we'll see how long opposition lasts."

THE 'NOT VERY SEXY' OPTION

Once the stimulus makes it through Congress, there is no shortage of municipalities and states around the country already looking for money for infrastructure projects.

A report released by the U.S. Conference of Mayors entitled "Ready to Go" in early December listed more than 11,000 projects in 427 cities, many of which already have local approval.

The total cost for the projects -- everything from a $100,000 driving simulator for Goodyear, Arizona to a $20 million expansion of a housing complex for the elderly in West Hartford, Connecticut -- would be nearly $73.2 billion and they would create more than 800,000 jobs, according to the group.

Another term often used for projects that are approved, but need money is "shovel-ready."

"I am sure there are plenty of shovel-ready projects out there, but where I would invest in is repairing and maintaining existing highways and transit systems," Lance Grenzeback, senior vice president at Cambridge, Massachusetts-based transportation consulting firm Cambridge Systematics Inc.