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A Project of The Annenberg Public Policy Center

Trump Distorts Stimulus

While calling for new infrastructure investments, President Donald Trump distorted the facts about President Barack Obama’s 2009 stimulus bill. Trump described it as an “infrastructure bill” but “[n]obody ever saw anything being built” and most of the money was used on “social programs.”

Although the Obama administration promoted the bill’s infrastructure projects, the overriding goal of the stimulus package — which Trump praised at the time — was to jump-start the economy through a combination of tax cuts to spur spending, federal contracts and grants to create private-sector jobs, and federal aid to local and state governments to ease the effects of the Great Recession.

It’s true that about a third of the $840 billion stimulus package went toward social programs such as unemployment benefits, food stamps and Medicaid assistance to states. But it would take a tortured definition of “social programs” to get to “most.” Fully a third of the spending in the bill was for tax cuts.

And while Trump may not have heard of any of them, there were thousands of infrastructure projects funded by the bill.

Trump’s dig at the American Recovery and Reinvestment Act, commonly known as the stimulus bill, came during remarks at a CEO town hall on the American business climate. As he did during the campaign, Trump promised “a very major infrastructure bill of a trillion dollars, perhaps even more” to rebuild such things as roads and highways. It would, he said, be very different from the stimulus package approved by Obama.

Trump, April 4: You know, there was a very large infrastructure bill that was approved during the Obama administration, a trillion dollars. Nobody ever saw anything being built. I mean, to this day, I haven’t heard of anything that’s been built. They used most of that money — it went and they used it on social programs and we want this to be on infrastructure.

As we said, Obama and his team often touted infrastructure projects in the stimulus bill, but it was not strictly, or even primarily, an infrastructure bill. In a press conference on Feb. 9, 2009, a week before he signed the bill, Obama framed it as an attempt to “break the cycle and get our economy moving.”

Obama, Feb. 9, 2009: And that is why the single most important part of this Economic Recovery and Reinvestment Plan is the fact that it will save or create up to 4 million jobs — because that’s what America needs most right now.

Obama first highlighted tax relief for the middle class, and then discussed investments in health care, energy, education and infrastructure. According to the archived ARRA website, the total funds allocated from the legislation came to $840 billion and broke down like this: $290.7 billion to tax relief; $261.2 billion to “contracts grants and loans”; and $264.4 billion to entitlements (including Medicaid and Medicare and unemployment benefits).

According to the White House’s ARRA website, $33.8 billion was spent on “infrastructure,” which included broadband, highway construction, and water and sewer projects. But there was other infrastructure money in other parts of the bill, such as the $39.2 billion spent on transportation, including highway infrastructure, high-speed rail corridors, and grants for railroads and airports.

Michael Grabell, a reporter for ProPublica and author of the book “Money Well Spent?” about the stimulus package, estimated about $80 billion in the stimulus went to infrastructure.

“It’s accurate to say that President Obama and his team promoted the stimulus as an infrastructure bill,” Grabell told us in an email. “But in the end, there was very little in the stimulus for infrastructure. I estimated that only about $80 billion, a tenth of the Recovery Act, was devoted to infrastructure. That’s a broad estimate that includes roads and bridges as well as more modern infrastructure, like smart grid and broadband. Of that, about $27 billion was reserved for roads and bridges.”

Trump’s claim that “[n]obody ever saw anything being built” is just silly.

The Department of Transportation reported that the ARRA “initiated more than 13,000 projects through the Federal Highway Administration, improving more than 42,000 miles of road and more than 2,700 bridges.” It also was used to help purchase “more than 11,500 buses and 665 rail cars, construct or rehabilitate more than 850 transit facilities nationwide” and helped fund the construction or repair of “thousands of corridor miles of track,” the upgrade of more than 30 stations and the purchase of new passenger cars and locomotives.

The stimulus bill also helped to fund aviation infrastructure, such as $35 million toward a new air traffic control tower in Oakland, California, and runway rehabilitation at airports around the country. The Transportation Department website lists dozens and dozens of projects fully or partially funded by the ARRA.

Here’s how ProPublica’s Grabell put it in his book:

Michael Grabell: Generations from now, there will be countless projects that communities can point to as the enduring legacy of the American Recovery and Reinvestment Act. The $80 billion towards roads, runways, waterworks, rails, federal buildings, and parks was one of the largest investments in the nation’s infrastructure since President Eisenhower established the Interstate Highway System in the 1950s.

The Recovery Act helped build major highways like the $1 billion DFW Connector, clearing a traffic mess in the Dallas-Fort Worth suburbs, and a $650 million elevated truck route easing access to the Port of Tampa. It raised bridges like the new Cleveland Innerbelt Bridge and it drilled tunnels like the fourth bore to the Caldecott Tunnel through the hills separating Oakland and Contra Costa County, California. The Recovery Act invested in new light rail lines in Salt Lake City and Dallas and upgraded tracks to extend Amtrak’s Downeaster train to Brunswick, Maine. It built a new eight-story federal courthouse in Austin, Texas, a 500,000-square-foot hospital at Camp Pendleton in California, and a “warriors in transition” complex to help wounded veterans at Fort Bliss in El Paso. And the stimulus money finally replaced a century-old drawbridge over Connecticut’s Niantic River that in 2009 got stuck shut, trapping boats for hours.

“It’s absolutely not true that we have nothing to show for it,” Grabell told us. “The reality though is that megaprojects are now financed by multiple funding sources, so it clouds our understanding – especially when we compare it to the heavily mythologized [Great Depression-era] PWA and WPA, which are often mixed up and received similar criticism at the time.”

It’s also a stretch for Trump to claim that “most of that money — it went and they used it on social programs.” A sizeable chunk of stimulus spending went toward social programs like unemployment benefits ($61 billion) and food stamps ($48 billion). But it would take a tortured definition of “social programs” to get to “most.”

As we said earlier, about a third went to tax breaks, the biggest being $104 billion for the temporary Making Work Pay credit, which provided a refundable tax credit of up to $800 for eligible working couples in 2009 and 2010. There were also $131 billion worth of individual tax credits, including for first-time homebuyers, education expenses and earned income tax credits.

There was also about $54 billion in aid to states to prevent teacher layoffs. In all, $94 billion was spent on education. Is education a social program?

As we said, the government’s ARRA website lists $264.4 billion spent on “entitlements,” including Medicaid assistance to states, unemployment insurance, family services and housing. But that only comes to a third of the overall spending.

Trump himself was well aware that the stimulus was not primarily an infrastructure bill. As BuzzFeed notes, after the Feb. 9, 2009, Obama press conference we cited earlier, Trump went on Fox News to sing the praises of the plan, saying, “this is what we need.”

“Well, I think taxes are very good. I think it goes quickly. It is easily done, and etc., etc.,” Trump said, “but building infrastructure, building great projects, putting people to work in that sense is also very good, so I think you have a combination of both plus he is doing a rebate system and I think that is good also.”

Host Greta Van Susteren asked Trump if “the breakdown between spending projects and taxes” was appropriate.

“Well, I have analyzed the bill as closely as it can be analyzed in this quick a period of time, but he’s really got a combination of both,” Trump said. “He is doing the taxes, he is doing rebates, and he is also doing lots of public works.”

We should also note that later in his presidency, Obama repeatedly pushed for more, major government investment in infrastructure. But his plans were rebuffed by Republicans. For example, in November 2011, the Senate shot down a $60 billion infrastructure bill that was part of a larger jobs plan promoted by Obama. The bill failed after a vote that fell largely along partisan lines.