RHINELANDER DAILY NEWS

Scoring the Stimulus Plan
By Giles Morris
Daily News Staff

08/15/2009

As leaders of both parties in Washington continue to debate the efficacy of the federal stimulus package, its impact on the local workforce is difficult to measure. That’s not to say the Northwoods has not benefited from an influx of federal dollars.

Concrete finishers smooth out the new taxiway at the Rhinelander - Oneida County Airport on Thursday afternoon. Luke Laggis/Daily News 

Congressman Dave Obey, one of the architects of the American Recovery and Reinvestment Act of 2009 (ARRA), visited Rhinelander recently to defend stimulus spending and ask for patience. His message to Rhinelander was clear.

“I don’t know of a city in the country that has come out better than Rhinelander from the stimulus package,” Obey said.

Obey’s visit came two days after Governor Jim Doyle’s office announced that Rhinelander would receive over $16 million in grants for its approximately $32 million wastewater treatment facility. In April, the Rhinelander/Oneida County Airport was awarded $1.6 million — $1 million of which came directly from ARRA — to upgrade its runway system. The city has also received $460,000 in ARRA money in the form of a Community Development Block Grant (CDBG) for its expansion into EMS services.

Regionally, the Chequamegon-Nicolet National Forest (CNNF) has announced $4.67 million in ARRA awards; the 12th Senate district has gotten approximately $10 million for three road improvement projects — a $7 million road resurfacing project on Hwy. 45 between Eagle River and Land O’Lakes, a $1.2 million preventative maintenance project on Hwy. 52 in Forest County, and a $1.7 million project on Hwy. 51 between Merrill and Tomahawk; and both Nicolet College and the School District of Rhinelander have received significant bumps in funding in their existing federally-funded programs.

The bottom line is the fear that stimulus money wouldn’t make it to Rhinelander is gone, but there are still doubts about whether the money is really creating jobs.

Obey believes those criticisms are premature.

“I would simply point out that this is supposed to be a 30-month program and we’re in the fifth month of it,” Obey said. “Criticizing the bill when it’s just starting is like screaming at a baseball manager in the second inning.”

Obey said in February and again last week that ARRA was designed to fill part of an estimated $3.5 trillion hole in the economy caused by the recession and accentuated by the country’s loss of about $10 trillion in assets.

“The stimulus package is a hole-filling operation,” Obey said. “We’re trying to fill about half of the hole that’s been created in the economy.”

Obey pointed out that only 37 percent of the dollars earmarked in ARRA have been allocated in the first year and many of the projects they have funded are not yet under way. He reiterated that the task of turning the national economy around can’t be accomplished over night and there’s no way to judge yet whether the stimulus package is doing what it was designed to do.

“We’ve been dealing with the most severe economic crash since the 1930s. It’s going to take time for the economy to recover,” said Obey. “No one is in the position make those judgments yet because we’re just beginning.”

As for the way the money has been spread around in states, Obey said the package has allowed governors flexibility.

“In terms of the way funds are being distributed, we gave governors a great deal of discretion about how the money would be spent,” said Obey. “Obviously, I would like some of that money to come back to my district and I think we’ve had some good results so far.”

Obey said the stimulus package will be judged on its ability to accomplish two principal aims — stabilize the economy over the short-term and create investment in long-term infrastructure that will generate a healthy economy in the future.

“We’ve got to keep that going to make up for the fact that the private sector is still on its heels and we’ve got to continue to invest in the longer term,” Obey said.

Obey also said the country cannot fix its economic difficulties without reducing its reliance on foreign oil and fixing its healthcare system, because in both areas the country is spending more money than it can afford. One of Obey’s principal messages during his visit was that Republican criticism of the Democrats’ spending shows a backward approach to the country’s predicament.

Citing the historical example of Franklin Delano Roosevelt’s decision to pull back on spending in the 1930s and the personal example of the Jimmy Carter administration’s attempts to cut the deficit in the 1970s, Obey said you have to spend to get out of structural deficits.

“If you think you can cut the deficit by putting on a green eye-shade, you’re out of luck because the economy is too dynamic for that,” Obey said.

One of the criticisms of the stimulus package is that it puts communities in direct competition for money they all need equally.

State Senator Jim Holperin has a good view of that aspect of the stimulus program, but he also believes it’s too early to judge ARRA.

“Like Obey said, it’s still fairly early in the process,” said Holperin. “I think if you look at the Rhinelander area, they’ve gotten some good projects funded. Have those been in competition with other applications in the 12th District? In some cases yes.”

Holperin disagrees with Obey that the states have had a major role in allocating the money.

“I still think that most of the money — by far the largest portion of it — is going right into existing programs,” said Holperin.

The Legislature’s Joint Finance Committee is the only body of state-level elected officials, outside of the governor, that gets to review stimulus program spending, but Holperin said the committee’s role is limited.

“It is having the effect of getting these projects bid on, awarded, and started in most cases much earlier than they would have,” said Holperin.

“Most of us are trying to help our local community when we can but often times it’s federal money coming into existing programs with narrow guidelines and there’s not an awful lot we can do,” Holperin said. “The Feds did not intend for state policy-makers to be involved because that would have slowed things down.”

“Is the way the money is being awarded fair because a project that’s ready to go gets the money instead of one that may in some cases be more needed? I don’t know,” Holperin said. “The way it’s set up the chronology and the speed of a project has in many cases been the mitigating factor.”

While most of the money from ARRA that has already been awarded has come through existing federal programs, the money coming directly into communities like Rhinelander has largely been the result of competitive state grant funds.

City Administrator Bill Bell is pleased with how Rhinelander has positioned itself in the big money grab.

“Right now we’re very happy with the stimulus package. It’s going to make a huge impact on our community,” Bell said. “Yes, there have been hurdles in terms of the application process, but we are thrilled with what we’ve gotten on the whole.”

Bell said Mayor Dick Johns, Sen. Holperin, and Congressman Obey have worked closely on the city’s grant applications and he credits that cooperation with the successful outcomes.

In the case of the city’s wastewater treatment project, Bell said the city took a risk that paid off.

“We see it as we took a risk. We fronted the money for the engineers to speed up the projects and it paid off,” said Bell.

Bell said the city still has its sights on more stimulus money, particularly money that could speed the process of redeveloping the downtown waterfront. Amongst the community of city administrators around the state, Bell said the competition for grant money made available through ARRA has been friendly, at least so far.

“We e-mail each other. It’s not winners and losers. We’re all on the same team. We’re all Wisconsin communities, but I guess when you win one there is a sense of accomplishment,” Bell said.

The most recent numbers show that the national unemployment rate has dropped slightly–– from 9.5 to 9.4 percent–– and that Oneida County’s jobless rate has dropped from 8.8 percent to 8.7 percent. Some economists have argued the drop is the result of people giving up their search for work, rather than getting hired.

With the $787 billion of ARRA only just beginning to seep into the country’s economy, Obey’s defense of the program as a job-saver is dogged.

“All I can say is there are a lot of people who are going to have jobs because we’re doing these things who would not have had them had we not done them,” Obey said.