If you’ve done much driving in recent months, you’ve probably seen road signs proclaiming: “This project funded by the American Recovery and Reinvestment Act.” You might be surprised to learn how much money tied to that federal legislation has been used to pay for the signs. Carolina Journal Managing Editor Rick Henderson discussed the topic with Donna Martinez for Carolina Journal Radio. (Click here to find a station near you or to learn about the weekly CJ Radio podcast.)
Martinez: First of all, the name on the signs sounds very official. What does it actually mean?
Henderson: Well, it’s the high-priced version of “your tax dollars at work.” These are signs that have been posted at the locations of all the infrastructure projects that are being funded by the stimulus bill. Typically speaking, you see these sorts of things around, but it turns out that in this case, a lot of money was spent on these signs — a lot more in some states than you would think would be appropriate for such a project. There is a congressman from Illinois — his name is Aaron Schock, he’s a Republican — and he actually did some studies, asked states what are they spending on the signage.
Martinez: It was pretty incredible information.
Henderson: His take so far is that $20 million has been spent on the signage.
Martinez: Let’s stop for a moment — $20 million on signs?
Henderson: Right, yes, exactly — on signs. And, that if indeed every project that was supposed to get one of these signs got one, by the time the stimulus money ran out, it would be closer to $200 million.
Martinez: You’ve got to be kidding me.
Henderson: Just on signs. Believe it or not, there are liberals who say this is a good use of the money because it’s paying people to work. You’re paying people to paint signs. You might use prison labor.
Martinez: OK.
Henderson: You’ve got prison labor stamping out license plates. Why can’t they make road signs? I think they actually do in some states. But yes, this is sort of the idea of paying people to dig a hole and fill it up, because at least you’re paying them to do something. The value of labor — rather than the value of labor being something to produce an item that people want to consume, the value of labor is just simply paying people to do something.
Martinez: Now to be fair, I think it’s reasonable to have a sign posted to let people know what is going on when they see a big construction site. I don’t have a problem with that, but it seems pretty amazing about actually how much is being spent on some of these signs. Incredible amounts of money — are they gold-plated or something?
Henderson: Well, they’re very, very fancy. And, in fact, the story that I did for Carolina Journal, I actually went down, I was driving to Wilmington to an event, and I remembered seeing this sign, so I went and took a photograph of it because I’d actually seen some reporting about the concerns about the cost of these things. It’s a very fancy sign. I gotta tell you, it’s really nice. Virginia Foxx, who is the 5th District representative, her office says that they’ve found the average cost of the majority of the signs up in North Carolina is about $2,500 a piece. Now you can compare that. In Tennessee, for instance, they use signs that look like speed-limit signs, and they cost about $40.
Martinez: So it can be done for $40, but we’re spending more?
Henderson: You could do this for less. The biggest one of all — this is something ABC News pointed out — was one that’s near Washington Dulles International Airport. This sign cost $10,000.
Martinez: How is that even possible?
Henderson: The justification was that they wanted it to be really, really stable because of all the wake of the jets and all that. They wanted to make sure that it didn’t get knocked down by the weather or by the jets. But again, this is Monopoly money. They’re treating taxpayer dollars like Monopoly money. They think, “We’ll spend it because we’re essentially advertising for our wonderful stimulus package” — which, by the way, hasn’t really created any jobs, but we’ll at least advertise that fact.
Martinez: What’s interesting as well, Rick, is in your story — which is available at CarolinaJournal.com — you talk about the fact that this whole issue has created a testy debate during floor debate from different members of Congress. So that tells me that maybe some members of Congress don’t think this is a problem.
Henderson: Well, there was actually an amendment to a telecommuting bill that was added. Rep. Schock had originally introduced a stand-alone piece of legislation to essentially cut out funding for these signs. And that wasn’t going anywhere. So instead, he got this amended on the floor to this telecommuting bill. There was a debate about whether or not this was a good plan. Democrats were saying, “Yes, this is worthy. This is worthwhile. We’re putting people to work. We’re having them make signs. This is a good thing. We’re not paying them to sit around at home, paying them unemployment benefits. We are instead paying them to make signs.” There were objections from Republicans and some Democrats [as] to how profligate the spending was, and the amendment actually did not pass. So the signage funding will continue, but the nature of the debate — and you can look at it online in the Congressional Record — was just remarkable. The debate centered around two factors from the Democrat side. First of all, that this was good spending because it’s fine to have signs that tout our wonderful spending projects. And second, none of this would have been necessary if it weren’t for all the evil policies of the Bush administration. It was Bush bashing on the floor for something over signs for a piece of legislation that of course was drafted and passed after President Bush left office. So it was remarkable.
Martinez: Fascinating. Washington politics is always pretty amazing to watch, and this is yet another example. Let’s talk a little more seriously about this issue of the stimulus money because we can chuckle about this, [but] there is serious money being spent here. But this issue of whether or not the so-called stimulus package has created jobs is very interesting. We keep hearing this phrase “saved or created” — that this money has saved or created “X” amount of jobs. What is “saved or created”? How would you prove that any spending actually saved or didn’t save a job?
Henderson: Well, you can’t. That’s the problem with this whole designation. The argument that’s being brought out by defenders of the stimulus is that if we did not spend this money, unemployment would be worse than it is right now. So spending the money prevented people from losing jobs. Or there would’ve been more people who would have lost jobs if the money hadn’t been spent. Now, it’s impossible to identify these sorts of factors. What you can say is that for specific public-works projects that have been funded by the stimulus package that might not have been funded yet, then there were jobs that were ongoing or that were created that might not have existed. There is some way you can say that because that was what we were told the stimulus package was supposed to be about to begin with. But if you’re saying we saved or created jobs, it’s almost a meaningless term. It’s a propaganda term in a lot of ways. Now what we also know about the stimulus package is that a lot of the money did not go to fund these so-called shovel-ready projects. One analysis puts it [that] about 35 percent of the money went to state and local governments. And of that, 85 percent of that 35 percent went to actually fund ongoing government operations. So they were used — as they were used in North Carolina to the tune of close to $2.5 billion over the past two fiscal years —they were used to essentially bail out the legislature for failing to do its job and pass a balanced budget.
Martinez: Now there also have been issues of the accounting for the spending of this money, and, in fact, Carolina Journal reporters have written a couple of stories about this. Is there any way for the taxpayer to feel that they know exactly where this money is going and what it’s being spent on?
Henderson: There was a website that was created that was called Recovery.gov, which was designed to be fully transparent and allow any individual to look and see what funding was spent in their ZIP code, in their state. It was supposed to be traceable both ways — you could see who got the money, and you can also see what department provided the money. So this was supposed to be a way to show that the money was being spent properly. One of our associate editors, Sara Burrows, actually discovered that the website itself had a lot of holes in it. In fact, it was designating money going to phony ZIP codes. There were nonexistent ZIP codes that were getting funding. There were monies that were supposed to be going to different areas in North Carolina that actually were not ZIP codes that could have existed in North Carolina. Because of the way the post office draws the geographic map, there were numbers [that] the first three digits would have been in other states. And then there were other ZIP codes that just didn’t exist, period. It was attributed to being a glitch in the software. When that story ran, folks in Washington were very defensive about this. “Oh, no, this isn’t a problem at all. This money has all been accounted for.” Well, we couldn’t account for millions of dollars.
Martinez: The money has actually been sent out from the federal government, but at this point, do we know where some of that has gone then?
Henderson: We were able to eventually find out where it went. And a lot of it went to defense contractors. That’s really one of the problems — that you have a military contractor who has headquarters in multiple states, but the money may go to Ft. Bragg, for instance. But still, even so, the website was not nearly as transparent as it was touted to be.