For immediate release 6-15-2010

Large portions of Recovery Act spending fail to stimulate New Mexico's economy

Nuclear and military controlled funds generate few jobs and accrue benefits to a relatively small number of corporate contractors, institutions, and privileged communities

Recovery Act experience suggests need for broad-based, not centralized “trickle-down,” economic development path

Contact Darwin BondGraham or Greg Mello - 505-265-1200

Albuquerque — An analysis of American Recovery and Reinvestment Act (ARRA) contracts and grants in New Mexico reveals that the intended effects of the legislation —to stimulate the economy and protect communities hit hard by job losses— have been blunted by prevailing patterns of federal spending in the state.  Entitled "Nuclear and Military Maldistribution and Inefficient Use of Recovery Act Funds in New Mexico," the brief is available through the Los Alamos Study Group's web site.

The Study Group's brief examines the largest contracts and grants made under the ARRA in New Mexico and notes that a full quarter of these have been consumed by nuclear weapons and military contractors so far.  Four of the top-ten contract recipients are nuclear weapons laboratory contractors.  Thirty-six nuclear and military contractor recipients have consumed more than $504 million of New Mexico's ARRA allocation.   By examining the level of spending each federal agency has reported to create one job, the brief concludes: "compared to practically every other federal agency, nuclear and military spending of ARRA funds has proven so far to be a poor generator of jobs."

The report also notes the concentration of Recovery Act funds and projects in a few zip codes such as Los Alamos, Carlsbad (near the Waste Isolation Pilot Plant), or those proximate to Sandia Labs.  "Disproportionate amounts of federal stimulus money are being concentrated in affluent communities, and into the hands of corporate contractors linked to the labs," explains BondGraham.  "People living in these zip codes and working for these companies have not been as hard hit by the economic downturn as most other parts of the state, and most other sectors of the economy."  Meanwhile, BondGraham says that, "rural communities, tribes, and marginalized urban neighborhoods are suffering.  The irony though is that the zip codes representing Los Alamos National Laboratory (LANL), Sandia National Laboratories (SNL), and the Waste Isolation Pilot Plant (WIPP) are very inefficient at using stimulus dollars to create jobs, whereas places like Zuni or Silver City, where Recovery Act funds have been spent through the Education, Agriculture, and Health and Human Services Departments, have proven themselves to be incredibly efficient at creating jobs."

"The lesson here involves priorities," says Greg Mello, executive Director of the Los Alamos Study Group.  "How will New Mexico use the precious federal funds it receives over the coming decade?  This is a critical period, and we need to make sure we maximize the use of our tax dollars to create green jobs, protect the poor, and transition our economy away from environmentally disastrous forms of energy, particularly the burning of coal, and misguided and wasteful priorities like nuclear weapons.

“It is indeed important to clean up the nuclear waste that was disposed in shallow pits at Los Alamos.  Much more cleanup should be done, but it should be managed to involve less profit to out-of-state contractors, fewer overhead hours, and engage fewer people making six-figure salaries.  LANL’s “cleanup” – which often isn’t cleanup at all – has always been highly inefficient from the environmental standpoint.  The ARRA-funded cleanup may finally be real, but to the extent the reported rate of ARRA job creation is accurate, it is not producing the number of jobs it could and should.

“As it happens, the same old shallow land disposal practices are unfortunately still with us, and are even expected to grow with LANL’s proposed – and gratuitous – plutonium manufacturing mission.  NNSA and DOE are burying waste at taxpayer expense in one place and digging it up in another.  Municipal waste disposal is regulated more tightly than nuclear waste at LANL, which is not regulated at all.”

Mello and BondGraham point to a single federal capital project, one larger in budgetary terms than all ARRA contract and grant allocations in New Mexico put together —LANL's Chemistry and Metallurgy Research Replacement (CMRR) project.  "This is a $3.4 billion facility," explains Mello, "one that will create only a tiny fraction of the rewarding jobs and careers that would be created if the same amount of funds were used to leverage private or state and local investments in renewable energy production, or used to improve energy efficiency and security in homes and businesses across the state.  If New Mexico is to avoid further economic decline in the coming years it is necessary to break the lazy mindset that associates the DOE labs with positive economic outcomes, regionally or nationally.  There is no data supporting the idea that spending money at the labs helps New Mexico.”

"Worse still," says BondGraham, "is that this is a plutonium bunker they're building on the hill.  It has no positive multiplying impacts for our economy.  It's a giant sink for tax dollars.  It doesn't get used like public transportation.  It produces no social value like education.  It's a dead end for development."

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