Heavy Spending on Infrastructure Likely

Massive new spending to improve the security of the nation's hospitals, highways, water supplies and utility grids is emerging as a likely component of an economic stimulus package.

As President Bush seeks an accord With congressional leaders on a measure to strengthen the economy, all sides are coming to the conclusion that beefing up the nation's antiterrorism defenses will itself carry a big price tag-possibly large enough to dominate the anticipated plan.

Much of the debate over economic stimulus in the wake of the Sept. 11 attacks has revolved around whether-and how-to cut taxes. But as Mr. Bush prepares to meet with congressional leaders, momentum is building among Senate Democrats for a huge spending package focused on highways, bridges, water projects, hospitals and power grids. It could also call for one of the largest expansions of passenger rail service in recent history as a way to make the country less dependent on air travel.

A spokesman for Senate Majority Leader Tom Daschle of South Dakota said he expects the package to include help for jobless workers as well as "investment spending on infrastructure that helps stimulate economic activity, but also responds to the terrorist threat." Likely targets include public-health and transportation programs, said spokesman Doug Hattaway.

Congressional Republicans also are signaling their willingness to consider broad new domestic-security spending. Meanwhile, business groups, including the U.S. Chamber of Commerce, also are arguing for more aggressive spending on infrastructure, including highways, airports and energy transmission.

The Bush administration is considering additional spending as part of its creation of an Office of Homeland Security. Mr. Bush's budget director, Mitchell Daniels Jr., said yesterday that the new homeland-security czar, Pennsylvania Gov. Tom Ridge, is conducting an inventory of current programs. Mr. Daniels cautioned, however, that numerous proposals for pork-barrel spending were being revived in the name of national security. "You can characterize anything you want as stimulus with a little imagination," he said.

Mr. Daschle also believes that spending shouldn't be so large that it sacrifices fiscal discipline altogether and drives up long-term interest rates.

An emerging budget deal between the White House and congressional leaders sets the new spending target for fiscal 2002 at $686 billion. That should leave about $52 billion in surplus funds for fiscal stimulus measures providing increased opportunities for A/E/C firms.

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