Obama to Call for $50 Billion Spending on Public Works

Obama to Call for $50 Billion Spending on Public Works
By SHERYL GAY STOLBERG
Copyright by The New York Times
Published: September 6, 2010
http://www.nytimes.com/2010/09/07/us/politics/07obama.html?hp


WASHINGTON – President Obama on Monday is to call for as much as $50 billion in government spending to start up a long-term public works plan emphasizing transportation projects – roads, rail and airport runways – over the next six years.

Mr. Obama will lay out the plan, which is intended to promote the creation of construction jobs over the coming year and beyond, during a trip to Milwaukee on Monday afternoon, where he will observe Labor Day by attending a union festival. It would require Congressional approval, as it envisions extending and revising a broad transportation policy bill that is usually renewed every five years or so, but has been stalled in Congress.

Despite its uncertain prospects, the White House is highlighting its proposal as one part of a broader economic recovery package that Mr. Obama is to unveil during a speech in Cleveland on Wednesday.

With Democrats looking at a bleak election season, in large part because of high unemployment, the White House has been scrambling to find ways to jump-start the sagging economy.

Mr. Obama’s plan would call for investment over six years, the White House says it would be front-loaded with an initial investment of $50 billion in taxpayer money, to help create jobs in as early as next year. The administration says it would work with Congress to find ways to pay for the plan, so that it would not add to the nation’s rising deficit. One possibility would be to cut existing subsidies for oil and gas exploration and production. Historically, transportation projects have been paid for largely with dedicated taxes such as those on gasoline.

White House officials said Mr. Obama wanted to rebuild 15,000 miles of roads, construct and maintain 4,000 miles of railway – enough track to span the continent — and rehabilitate or reconstruct 150 miles of airport runways while putting in place a system that would reduce travel time and airport delays.

The president will also call for what the White House is describing as an “infrastructure bank” that would focus on paying for national and regional transportation projects.

The $787 billion economic recovery act passed by Congress at the beginning of Mr. Obama’s presidency already included considerable spending on roads and other transportation infrastructure. But the White House says Mr. Obama’s new plan is different, because it would focus on a “long-term vision” as well as create jobs in the near term.

Since the end of last year, when the long-term surface transportation legislation expired, infrastructure investments have been continued on a temporary basis, even as a trust fund that finances them has fallen into insolvency, the White House said. Mr. Obama’s plan would call on Congress to enact a long-term reauthorization of that bill.

The idea for an infrastructure initiative, and in particular an infrastructure bank to leverage public money for private investment, is one that the White House chief of staff, Rahm Emanuel, has been promoting for some time within the West Wing. It was not included in the original $787 billion stimulus program in early 2009 because the administration and Congressional Democratic leaders wanted to pass that package as quickly as possible given how fast the economy was sinking in the weeks before Mr. Obama took office; changes in the way public projects are determined and financed would have met resistance in the large committees of Congress that have jurisdiction.

Lately the White House has been consulting with Representative James L. Oberstar, the Democrat from Minnesota who is chairman of the House Transportation and Infrastructure Committee and who has been developing legislation of his own.

The administration also has consulted with an influential, tri-partisan trio – Ed Rendell, the Democratic governor of Pennsylvania; Arnold Schwarzenegger, the Republican governor of California; and Michael R. Bloomberg, the independent who is mayor of New York -- that recently formed a group called Building America’s Future to press for more public and private partnerships to invest in and modernize roads and bridges, air traffic control systems, waterways, electricity grids and more.

The White House offered only sketchy details of the plan during a background briefing for reporters Monday. Senior administration officials said they have no estimate for how many jobs would be created, but that it would be a ‘’a substantial number.” And they declined to specify the total cost of the transportation package, beyond saying that the initial $50 billion would represent a substantial chunk of it.

The officials said that, under the best case scenario, if Congress acts quickly, the plan could start creating jobs over the course of 2011. But the officials emphasized that the White House does not view the proposal as a “stimulus, immediate jobs plan,” calling it instead a “six-year reauthorization that’s front-loaded.”

With only a few weeks of this year’s Congressional session left before lawmakers head home to campaign for re-election, the White House concedes it may face an uphill battle in getting the plan passed this fall, either before lawmakers break for the mid-terms or afterward, in a lame-duck session. Typically, transportation measures do get bipartisan support, but they often require months of work.