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Factbox: Obama proposes $50 billion for road, rail, airways

(Reuters circulated the following on September 6, 2010.)

MILWAUKEE — President Barack Obama would spend $50 billion on revamping highways, rails and airport runways to create jobs in the near term and improve the long-term U.S. transportation network.

The $50 billion would be spent in the first year and be part of a six-year transportation bill that must be passed by Congress, an administration official said.

An infrastructure bank would be created under the plan to leverage federal funds with state, local and private funding for important projects.

Following is a summary of the proposal, its likely impact and possible ways to offset its cost.


The White House said it would:

-- Rebuild 150,000 miles of roads and bridges while expanding capacity on some of them.

-- Construct and maintain 4,000 miles of rail lines, both high-speed rail and commuter lines. The plan also would "invest in a long-overdue overhaul of the Amtrak passenger fleet."

-- Rehabilitate or reconstruct 150 miles of airport runways and put in place a NextGen air-traffic control system. Among improvements would be use of a satellite-based surveillance system, which would be more accurate than ground-based radar.


The plan would lead to "a substantial number of jobs" beginning in 2011, says the White House. The unemployment rate among construction workers is 17 percent, compared with the U.S. average of 9.6 percent.

Transportation experts say $1 billion in transportation construction spending creates 35,000 jobs.


The White House says it will work with Congress to fully pay for the plan. A senior administration official suggested ending "oil and gas loopholes" that have been targeted for elimination by Obama for two years running.

The tax breaks, estimated to be worth $36.5 billion over 10 years, include a manufacturing tax deduction and a percentage depletion on oil and natural gas wells. The petroleum industry wants to keep the tax breaks.


A permanent infrastructure bank would help finance big-ticket transport projects by combining federal, state and local government funds with private financing. There has been little congressional interest in the idea.

The White House says the bank would have more insulation from political pressure than traditional approaches such as formulas that divide money among states or guarantee funding for various ideas.

At the same time, the administration would consolidate more than 100 transportation programs and use performance measurements to award money. Factors such as safety, environmental sustainability and economic competitiveness would be considered.


The White House says its proposed $50 billion would be part of the traditional long-term transportation bill that must be developed in Congress.

The administration has not said if it supports a $500 billion, six-year bill for highways, rail and transit that is being assembled by the House of Representatives Transportation Committee.

The $500 billion is nearly double the amount of the last authorization, which expired in 2009.

In the past, the administration suggested that work on a long-term bill could be delayed until 2011, after this year's November 2 congressional elections.

Congressional work on the transportation bill slowed this year due to questions how to pay for the work. Gasoline tax revenue, one traditional source of money, dwindled during the recession.

The House passed a bill in July for $79 billion in transportation spending, more than half of it for roads and bridges, in the fiscal year that begins on Oct 1. The Senate has yet to act. Work on legislation to modernize the aviation system stalled just before Congress recessed for August.

The $50 billion plan proposed by Obama would roughly double the $27 billion approved for transportation by the stimulus bill.

Tuesday, September 7, 2010

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