Obama Stimulus Will Rain Billions on State
Maryland is an island of relative prosperity in a sea of economic gloom. That, at least, is how economist Mark Zandi of Moody’s Economy.com depicts it.
In a recent map of the coast-to-coast recession, he ranked the state as one of the few not in recession, though still “at risk.” In December, the state’s unemployment rate was the 14th lowest in the country, significantly below the national average.
What’s helped keep Maryland from sinking deeper has been spending by the federal government, which is about to start pumping a whole lot more money in.. Billions in new spending could help cushion the pain over the next year or two, though perhaps not quickly enough to keep the state from falling into the national recession that began well over a year ago.
Private economists say the stimulus package will help save jobs across the country, but they criticize White House officials for being overly optimistic about the impact.
When it comes to Maryland, though, the administration’s predictions may not be optimistic enough.
According to President Barack Obama’s economic advisers, a total of 66,000 jobs will be created or saved in Maryland over the next two years. The figure is only a rough guess, however. It was based on economic models and population statistics, not the nitty gritty details of the $787 billion deal Congress and the administration hammered out.
For example, there could be as much as $3 billion—and possibly even more--in new construction work in or near Maryland, once money from the stimulus package starts to flow, according to congressional sources and documents released by Congress late last week.
That government spending alone could generate as many as 85,000 jobs, largely in the construction industry. An industry lobby, the Associated General Contractors, estimates that each $1 billion in spending creates 32,800 jobs.
Additional jobs will be saved or created from the roughly $814 million the state government receives in direct financial aid, which could prevent planned layoffs at the state or local level.
There will be new grants, too, for local governments to hire police officers (which, in reality, may end up being used to keep existing cops on the job). A total of $3 billion worth of research money will go to the National Science Foundation, some of which will filter into Maryland labs. The National Institutes of Health, based in Maryland, will be getting another $9 billion. Most of that is for research, but $500 million is for construction work at the Bethesda campus.
There is new money to lay rural broadband lines, some $400 million for bridge and highway repair, $240 million for improving mass transit, $27 million for drinking water projects, and so on.
Nationwide, the government will have $4.5 billion to help make federal buildings more energy efficient. It will be up to agency officials to target the funds, but a significant amount of the money will be spent in this region. The Food and Drug Administration facility at White Oak is already on the list, according to Sen. Barbara A. Mikulski’s office.
Mikulski, a senior member of the Senate Appropriations Committee, had a direct hand in providing additional funding for NASA, some of which will go to the Goddard Space Flight Center in Greenbelt. Industry officials credit her with single-handedly getting $400 million to speed development of the space shuttle. NASA’s mid-Atlantic regional spaceport at Wallops Island, just across the Virginia line from Worcester County, will be a shuttle resupply center.
Mikulski describes the various federal facilities in the state—the military bases, labs and office complexes--as a “cornucopia.”
"Every time the federal government spends a dollar, a lot of it is being administered in Maryland," the Democratic senator said.
Recently, the state has become a “real world” backdrop for senior Obama administration officials, who have used the area between Baltimore and Washington to highlight new spending during the debate over the stimulus measure.
Vice President Joe Biden stood in the sub-freezing chill outside an ancient MARC train station
in Laurel to promote an $2.9 million repair project. Interior Secretary Ken Salazar toured the Patuxent Research Refuge, which is getting $15 million for restoration and repair work.
But those figures are dwarfed by major area projects in the package: a new $500 million National Computer Center for the Social Security Administration at Woodlawn, for example. Social Security will receive $1 billion in all, with $500 million going to reduce the agency’s processing backlog.
The National Institute of Standards and Technology in Gaithersburg will get much of the 360 million allotted for construction and maintenance work at the agency, which also has facilities in Colorado. The National Oceanic and Atmospheric Administration, headquartered at Camp Springs, will get $230 million, some of which will go to operations in the state.
A total of $650 million is earmarked for initial construction of a new $3.4 billion Department of Homeland Security headquarters in Washington, the largest building project since the Pentagon was erected more than 60 years ago. Construction work will employ 32,800 people in the capital region, the government estimates.
Add to these figures the hundreds of millions in direct aid to citizens in the form of tax cuts, help for those who have lost their jobs or fallen deeper into poverty across the country.
Obama will open that spigot when he signs the largest single slug of new federal spending and tax cuts in history into law this week. At the same time, he may well offer soothing words about how things will begin turning around soon across America.
The sad truth, however, is that nobody knows how much spark those billions will give the beaten-down national economy.
The impact of any government spending and tax-cut plan is “very uncertain,” Douglas Elmendorf, director of the nonpartisan Congressional Budget Office, advised the other day.
Private economists, including Zandi, forecast that the stimulus package will generate or preserve about 2.2 million jobs. That would be barely half of Obama’s rosier target of 4 million.]
But Maryland, once again, may stand out as an exception.