Seeking to bolster the sluggish economy, President Barack Obama used a Labor Day appearance in Milwaukee to announce he will ask Congress for $50 billion to kick off a new infrastructure plan designed to expand and renew the nation’s roads, railways and runways.
Using tough tones, he assailed Republicans as the party of “No, we can’t” – a play off his campaign slogan “Yes we can” – and accused his critics of talking about him like a “dog.” But he said he’d keep fighting “every single day, every single hour, every single minute” to turn the economy around.
But those same Republicans said they had no interest in Obama’s new plan – a sign that it would face an uphill battle in Congress.
In his speech to the Milwaukee Area Labor Council, Obama laid out the goals of his new program: Rebuild 150,000 miles of roads; construct and maintain 4,000 miles of rail, enough to go coast to coast; and restore 150 miles of runways, while putting in a next-generation air traffic control system to reduce travel time and delays.
The president announced the establishment of an Infrastructure Bank to leverage federal dollars and focus on national and regional investments that often fall through the cracks and a plan to integrate high-speed rail on an equal footing in the surface transportation program.
The idea is that to jump-start job creation; the policy front-loads — through the $50 billion upfront investment — a significant share of the new infrastructure resources, the White House said.
White House chief of staff Rahm Emanuel has been pushing an infrastructure plan in West Wing meetings for weeks. But with the November midterms looming, officials were having trouble finding a way for the effects to be felt immediately.
Obama and Democrats are under pressure to show voters they are trying to do something about the sluggish economy, with unemployment still hovering around 10 percent. Their options are limited, but some economists have said that another infrastructure plan — along the lines of the first stimulus package of more than $800 billion — would be a way to infuse cash into the economy to stimulate hiring.
The White House describes the plan as a two-part proposal that would include both an initial $50 billion investment in projects and the renewal of the six-year surface transportation infrastructure bill that has been overdue for reauthorization for a year.
Both parts would require finding significant sources of revenue to pay for the funding increases, though Obama told the Milwaukee crowd that the plan will be fully paid for and will not add to the deficit over time.
So far, the administration is proposing to close more corporate tax loopholes that would specifically target tax breaks for oil and gas companies.
But the prospects of rapid congressional action on such a proposal seem dim, given that even some Democrats to any additional government spending in the face of voters worried about the growing federal deficit and critical of Obama's original stimulus plan. Senior administration officials, in a conference call with reporters Monday morning, would not say whether they would push Congress to pass a bill before the end of 2010.
“These types of reauthorizations have always been a substantial undertaking,” one official said. “This one is particularly ambitious because of the front loading and the set of reforms.”
Under the best-case scenario, however, jobs would be created in 2011, the official said. “This is not an … immediate jobs plan. This is a six-year reauthorization that’s front-loaded,” according to the senior administration official. “We’re not trying to put out an idea today that in October 2010 will be creating jobs.”
House Republican leader John Boehner criticized the plan as "more of the same failed 'stimulus' spending" and said Obama's earlier effort didn't bring down unemployment.
"If we've learned anything from the past 18 months, it's that we can't spend our way to prosperity. We don't need more government 'stimulus' spending — we need to end Washington Democrats' out-of-control spending spree, stop their tax hikes and create jobs by eliminating the job-killing uncertainty that is hampering our small businesses," Ohio's Boehner said in a statement.
Senate Republican leader Mitch McConnell of Kentucky added: "A last-minute, cobbled-together stimulus bill with more than $50 billion in new tax hikes will not reverse the complete lack of confidence Americans have in Washington Democrats' ability to help this economy.”
In his remarks in Milwaukee, Obama took aim at the Republicans, saying they had opposed all of his efforts to shore up the economy by hewing to the same philosophy that got the country in trouble in the first place. “"That philosophy didn't work out so well for middle-class families all across America," Obama said. "It didn't work out so well for our country. All it did was rack up record deficits and result in the worst economic crisis since the Great Depression."
Obama travels to Cleveland Wednesday and holds a news conference on Friday.
In addition to proposing the funding of a slew of road, rail and air transportation infrastructure projects that are typically funded by the surface transportation bill, the president is also proposing a set of reforms to the way transportation funding is allocated.
According to the president’s plan, high-speed-rail funding would be integrated into the surface transportation bill for the first time. The bill also calls for the creation of an infrastructure “bank” that would leverage private and government funding for infrastructure projects. And it includes a “Race to the Top”-style program that would inject competition into the process of allocating money for nearly 100 “boutique” projects across the country. The Education Department’s Race to the Top program involves having states compete for funding by producing specific plans about how they would spend the money.
Here is a White House fact sheet on the plan, “Renewing and Expanding America’s Roads, Railways and Runways”:
The President today laid out a bold vision for renewing and expanding our transportation infrastructure — in a plan that combines a long-term vision for the future with new investments. A significant portion of the new investments would be front-loaded in the first year.
This plan would build on the investments we have already made under the Recovery Act, create jobs for American workers to strengthen our economy now, and increase our nation’s growth and productivity in the future. At the same time, the plan would reform the way America currently invests in transportation, changing our focus to enhancing competition, innovation, performance, and real analysis that gets taxpayers the best bang for the buck, while moving away from the earmarks and formula debates of the past. In prior years, transportation infrastructure was an issue that both parties worked on together, and the Administration hopes the same can be true now.
Some of the main provisions of the President’s plan over the next six years include:
• ROADS: Rebuild 150,000 miles of roads — renewing our commitment to the backbone of our transportation system;
• RAILWAYS: Construct and maintain 4,000 miles of rail — enough to go coast-to-coast;
• RUNWAYS: Rehabilitate or reconstruct 150 miles of runway — while putting in place a NextGen system that will reduce travel time and delays.
The President’s plan would accomplish this through:
• An up-front investment. The President will work with Congress to enact a new up-front investment in our nation’s infrastructure — an investment that would help jump-start additional job creation, while also laying the foundation for future growth. This initial investment would fund improvements in the nation’s surface transportation, as well as our airports and air traffic control system.
• A vision for the future. The President proposes to pair this with a long-term framework to reform and expand our nation’s investment in transportation infrastructure. Since the end of last year, when the last long-term surface transportation legislation expired, these investments have been continued on a temporary basis, even as the trust fund to finance them has fallen into insolvency. If we are to enjoy the benefits that come from a world-class transportation system, Congress must enact a long-term reauthorization that expands and reforms our infrastructure investments and returns the transportation trust fund to solvency. To jumpstart job creation, this long-run policy front-loads – through a $50 billion up-front investment — a significant share of the new infrastructure resources. As with other long-run policies, the Administration is committed to working with Congress to fully pay for the plan.
The long-term framework includes meaningful reforms:
• The establishment of an Infrastructure Bank to leverage federal dollars and focus on investments of national and regional significance that often fall through the cracks in the current siloed transportation programs;
• The integration of high-speed rail on an equal footing into the surface transportation program to ensure a sustained and effective commitment to a national high speed rail system over the next generation;
• Streamlining, modernizing, and prioritizing surface transportation investments, consolidating more than 100 different programs and focusing on using performance measurement and “race-to-the-top” style competitive pressures to drive investment toward better policy outcomes.
• Expanding investments in areas like safety, environmental sustainability, economic competitiveness, and livability — helping to build communities where people have choices about how to travel, including options that reduce oil consumption, lower greenhouse gas emissions, and expand access to job opportunities and housing that’s affordable.
Specifically, the President proposes to make the initial up-front investment in the following areas:
• Roads. The nation’s highways serve as the backbone of our transportation system. Many roads and bridges are in need of repair and expansion and many of the Americans who want to do this work face high unemployment right now. Our investments would be focused on modernizing the highway system’s critical assets while providing much-needed jobs.
• Rail. Many parts of transit systems have been allowed to fall into a state of ill-repair. The President’s plan would help address this by making a major new investment in the nation’s bus and rail transit system. The Administration is also committed to expanding public transit systems and would dedicate significant new funding to the “New Starts” program — which supports locally planned, implemented, and operated major transit projects. In addition, the Administration is committed to building on its investments so far in high-speed rail — constructing a system that will increase convenience and productivity, while also reducing our nation’s dependence on oil and cutting down on pollution. The President’s plan would also invest in a long-overdue overhaul of Amtrak’s fleet.
• Runways & NextGen. The Administration proposes to invest in our nation’s airports by improving their runways and other equipment and facilities. We also propose a robust investment in our effort to modernize the nation’s air traffic control system (NextGen). This investment will help both the FAA and airlines to install new technologies and, among other improvements, move from a national ground-based radar surveillance system to a more accurate satellite-based surveillance system — the backbone of a broader effort to reduce delays for passengers, increase fuel efficiency for carriers, and cut airport noise for those who live and work near airports.
• Infrastructure Bank. The President proposes to fund a permanent infrastructure bank. This bank would leverage private and state and local capital to invest in projects that are most critical to our economic progress. This marks an important departure from the federal government’s traditional way of spending on infrastructure through earmarks and formula-based grants that are allocated more by geography and politics than demonstrated value. Instead, the Bank will base its investment decisions on clear analytical measures of performance, competing projects against each other to determine which will produce the greatest return for American taxpayers.
Glenn Thrush contributed to this report.