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March 05, 2009

The Challenge of Stimulus

Have spent the last week immersed in ARRA – the American Recovery and Reinvestment Act, better known as the stimulus bill. You'll find the one meg PDF here if you want to help make sure I haven't missed anything. As Vermont's Chief Recovery Officer it's a part of my job to make sure we don't miss anything that we could reasonably use.

The short term part of the challenge is that we don't yet know what most of the bill means. Like most law, it leaves the fine detail to regulation writing in various federal agencies. Since there's been turnover at the top of all these agencies and some don't even have their new leaders yet let alone the second echelon, it's going to be tough to get sensible regulations out at warp speed. Until we have regulations, we don't know what the rules are for getting the money – but, once the rules are out, there'll be a mad scramble. In many cases there is no guarantee that a particular state will get anything. So we have to make some guesses and get prepared.

The more interesting part of the challenge is the long term impact. How do we use this short term flood of money (it'll stop in a couple of years) to make a long term difference for Vermont? How do we take umpteen different programs with umpteen different objectives and rules written by umpteen different agencies and combine them to produce a coherent result? It's not even that all the money comes to the State and we can disperse and send it according to our vision. Non-profits, for-profits, coops, towns, etc. etc. can also apply for many programs. We can attempt to coordinate; we can cajole; in some cases the bill says that the states will be consulted so we get some authority from that. But we are certainly not in full control.

This is the problem and the opportunity nationwide. We've got to take this money – almost a trillion dollars – and build the infrastructure for the future. Actually, not anywhere near a trillion dollars is available for infrastructure; much goes for tax relief; expanded unemployment insurance; help to the states with Medicaid and a bunch of counter-cyclical stuff, most of which is necessary to keep the patient alive while we're getting ready for rehabilitation.

With what is available for infrastructure, we've got to do smart stuff. We have to make sure that all Americans (although my job is just Vermonters) actually have broadband, not just the availability of broadband. Why? Because when we build applications like Smart Grid to save on energy bills or electronic medical records to improve health care, we need to know that everyone is going to be able to access those applications. If not, we end up building parallel systems for those who are still offline. Money for Smart Grid and electronic medical records is in the bill. So is money for broadband. We have to make sure that the communications layer is there when the applications come online and that the applications are built assuming the communications layer will be there.

Similarly we need to make sure job training money in the bill gives workers the skills they need not just for the two year stimulus program – although that is important – but also the skills they'll need for the jobs that'll be created when the new infrastructure is in place.

So back to my reading.

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