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Obama stimulus plan critical for N.C.

Posted January 7, 2009
Updated March 9, 2009

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— President-elect Obama's $775 billion stimulus package currently in Congress could help the state Department of Transportation fund more projects and help ease a domino effect that could be disastrous on the state's economy.

"Without the stimulus, we're not going to see any sort of normalcy for the next couple of years," Mark Foster, the DOT's chief financial officer, said Wednesday.

The DOT has already postponed 75 percent of all projects – 100 percent of ones it considers to be major, Foster said. It has also laid off temporary workers to help make up for a projected budget shortfall of $320 million.

"We are ensuring that we continue projects, but we have cut back our lets almost 75 percent to ensure we don't hit that cash floor or go below it," Foster said.

As a result, businesses that rely on the DOT's business are already feeling the effect.

Although Democrats on Capitol Hill said Wednesday it is crucial they pass the national bailout by mid-February, some a plan could be weeks or months away.

If it's not approved within the next month or so, Berry Jenkins, with the Carolina Association of General Contractors, says the consequences could be disastrous.

"That's going to put a lot of companies out of business. They just can't survive that long," said Berry Jenkins with the Carolina Association of General Contractors.

Contractors, subcontractors, material suppliers and equipment dealers – the more obvious businesses associated with road construction – are the ones already affected, Jenkins said.

Less obvious businesses, such as banks, law firms, accountants and retail stores, are months, if not weeks away, from feeling the impact.

"The contractor is having to borrow money from a financial institution to finance the project, finance their operations," Jenkins said. "They obviously have accounting firms that manage their accounting process, and obviously, lawyers have to deal with the contracts to execute."

The stimulus plan, initially expected this month, would create and maintain jobs, Foster said, and that's good news for the economy. Every dollar the DOT spends has a multiplier effect, he said, with benefits up to $12.

"History will prove, just like in the Great Depression, that one of the best investments ever made was in infrastructure," he said. "It gets the country moving again. We're looking for the same thing today."

Economists have advised Obama for a $1 trillion or more economic jump-start, but the president-elect said at a news conference Wednesday that concerns of the rising national deficit prompted him to go for the lesser $775 billion package over the next two years.

The nonpartisan Congressional Budget Office has estimated the deficit for the 2009 budget year to be roughly $1.19 trillion. Last year's deficit was $355 billion.

Obama said he would have to juggle competing interests of economic stimulus and deficit control but that restoring general business health must come first.

"We have an economic situation that is dire, and we're going to have to jump start this economy with my economic recovery plan, creating 3 million jobs," Obama said.

"That's going to cost some money. And in the short term, we will actually see, potentially, additions to the deficit."

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  • Vietnam Vet Jan 8, 2009

    "Any bets on how fast the BO administration, the democrat controlled congress, and the RINO republicans will bankrupt America?"
    I've got news for you...America is already bankrupt!! And has been for many years. See how much gold is in Fort Knox and compare that to the amount of currency we've got in circulationd... Not to mention the dollar amount income from taxes etc. that this country generates each year compared to what is spent. Only the government can spend more than it earns and continues to do that year after year after year. Can a business or you or I do that?? Yes but not for very long!!

  • scientistjo Jan 8, 2009

    Did anyone see AAA magazine's piece on the NC DOT. AAA thinks they're as corrupt and dumb as we all do.

  • affirmativediversity Jan 8, 2009

    "They have never resurfaced our road in 35 years. I hope they dont get a dime!" - superman

    Secondary roads in the county I live in can be resurfaced every 60 years with the current funding. If DOT doesn't get money, it can't resurface your road. Sounds like a catch 22.

    What a bunch of garbage. NCDOT is rife with good ole boys and graft. How else do you explain 3 new multi million dollar road extensions to NOWHERE in Fayetteville (Bunce, Camden and Toys R Us) BUT no funds to expand STATE HWY 401 or 211 in Hoke county from 2 to 4 lanes. Those are STATE HIGHWAYS, HIGH VOLUME STATE HIGHWAYS but every year Hoke County is told, Sorry we don't have the money. THEY HAD THE MONEY FOR THOSE 3 USELESS, HARDLY EVER USED EXTENSIONS!!!!!

    NO MORE SPENDING. WE NEED MORE STIMILUS LIKED WE NEED THE ROOF TO BLOW OFF OF OUR HOMES

    OBAMA, 4 MORE YEARS OF THE SAME!!

  • nobama Jan 8, 2009

    Obama's new spending plan is not critical for NC. After they spend money they don't have they will have to tax us to pay for it. Say no to the new spending plan!!!

  • Gnathostomata Jan 8, 2009

    Alaska has a boom or bust economy that depends on two sources of income; oil and tourism. All other supportive businesses depend on these two markets. If times are good there are lots of specialty shops and choices of restaurants. When the revenue slumps, those merchants head back to the lower 48 states and only the die hard pioneer remain. North Carolina used to be very self sufficient with manufacturing and agriculture products until government began to pay farmers to let the fields remain idle and sent manufacturing overseas. We have left small towns abandoned while the Big City grows so large it cannot provide schools for the families that have been there for many generations. And the solution to any problem is to get more money from the government. We evidently cannot afford to maintain the roads we have already been taxed for, and the solution is to go deeper in debt so we can pave yet more land. Construction pays better than maintenance, but do we need more roads?

  • endless Jan 8, 2009

    really, "war of northern aggression"? Relly? Too funny. Hey, this stimulus plan is very important. Our economy needs it. Just look at what is happening to the porn industry! Jobs proomote other jobs.

  • killerkestrel Jan 8, 2009

    "They have never resurfaced our road in 35 years. I hope they dont get a dime!" - superman

    Secondary roads in the county I live in can be resurfaced every 60 years with the current funding. If DOT doesn't get money, it can't resurface your road. Sounds like a catch 22.

  • PaulRevere Jan 8, 2009

    I'm surprised NC didn't invade SC during the War of Northern Aggression when the Feds asked them to! Talk about sucking up to the Feds again...good grief! NC needs true leadership like SC has and has had. I'm not holding my breath.

  • veyor Jan 8, 2009

    hahahahahahahahahahahahaha

  • joco cruiser Jan 8, 2009

    DOT needs money and yet their employees make no effort to conserve. Any money that is received from a bailout will be spend wastefully and irresponsibly as it always it. Until NC is able to put a stranglehold on the legislative spending and hire management that will actually do the job they are hired for then we will always be in this situation.

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