Obama plan depends on swiftly spending cash

Many parts of Obama's plan would infuse money quickly into the economy, according to budget experts. These include $200 billion for recession-hit state governments to avoid layoffs, cutbacks in services and raising their own taxes. Federal tax cuts delivered by withholding less from paychecks can take effect almost immediately. Expanded food stamp and unemployment benefits would arrive mostly in 2009.

All of those ideas are poised to get funding — lots of it. But many economists say even more must be pumped into the economy to jolt it out of its doldrums.

That means massive spending on infrastructure projects such as road and bridge repairs, flood control and sewer systems, upgrading schools and public housing, and new runways and other airport improvements. Those projects typically take years. Depending on the length of the recession, much of the spending may not occur until after the economy is expanding. That could result in inflation, economists warn.

A Congressional Budget Office analysis of a $61 billion economic stimulus measure that passed the House in September — only to fail in the Senate — shows that just 27 percent of the plan's $37 billion in infrastructure spending would have occurred as the economy struggles through 2009. Another third would have been spent in 2010 and the final third wouldn't have been spent until 2011 and after.

And those were projects that lawmakers say are ready to go right now. House Transportation and Infrastructure Committee Chairman James Oberstar recently unveiled a $45 billion spending plan for highways, mass transit, water projects and airport improvements. More than that wouldn't create many jobs right away, he cautioned.

"If we're going to have a quick hit — get in, create jobs within 90 days, people working — then there is a finite list of projects that fall into the category," Oberstar, D-Minn., said recently. "So we have to be very careful about how much we grow the list."

Obama and allies like House Speaker Nancy Pelosi, D-Calif., stress that much of the economic recovery plan will have a longer-term focus. Such elements include delivering broadband communications to underserved areas, developing and improving energy efficiency technologies, updating the nation's electrical grid and modernizing schools.

"This is not a 1930s public works project," Pelosi says.

Nonetheless, there's a lot of focus on pushing money out on dams and highway projects already underway and, up until now, financed in bits and pieces.

"There's a huge backlog of demands out there on a number of different fronts," an Obama transition official said. The "real challenge is to make sure money isn't spent willy-nilly," the official said, speaking on condition of anonymity because he was not authorized to speak with the reporters.

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