Transportation chief defends stimulus spending efforts

Transportation Secretary Ray LaHood Thursday denounced criticism that economic stimulus spending on transportation projects has failed to make a dent in unemployment.

Testifying before the House Transportation and Infrastructure Committee, LaHood said the transportation component of the stimulus program provided a huge boost for construction jobs.

"We are driving down (construction) unemployment; a lot of people are working in good-paying jobs," the secretary said under questioning from House Transportation and Infrastructure Committee ranking member John Mica, R-Fla.

Mica challenged the job-creation record of the infrastructure spending, noting that since the stimulus package was signed in February, jobless rates of the 10 highest unemployment states had stayed the same or risen, with the exception of South Carolina, which received the smallest amount of funding for transportation projects.

"The whole purpose of the stimulus program was to get people working." said Mica, suggesting that Transportation Department recalibrate its program to speed up and better target the infrastructure spending. "If you are trying to lay off all the unemployment on us ... for not getting the money out faster, I just don't think that's accurate," LaHood shot back.

He said his department has obligated $29.4 billion of the $48.1 billion in stimulus funding allocated for highway, transit, rail and maritime infrastructure. "We've followed every guideline" in the stimulus legislation, he said. "The money is out the door."

House Transportation and Infrastructure Committee Chairman James Oberstar, D-Minn., also defended the effectiveness of the transportation stimulus spending. He said the program had launched 5,279 highway and transit projects and created 122,000 jobs.

LaHood touted as "wildly successful" the recent "Cash for Clunkers" program. He said 694,877 vehicles had been sold in 21,208 dealerships in the program, and the Transportation Department had paid out $2.8 billion in rebates, with an additional 7,098 applications worth a possible $28.8 million in final review. He said the program was a major factor in the increase in overall consumer spending during the third quarter and the 2.7 percent rise in retail sales in August.

LaHood said the administration stood by its call for an 18-month delay in congressional action on a reauthorization of all transportation programs. He said more time was needed to fine-tune and figure out how to pay for the measure. Its cost is expected to exceed $500 billion.