Obama aims to use war savings on infrastructure

Reuters News

1/24/2012 10:48:46 PM - Reuters News

By Lisa Lambert and John Crawley

WASHINGTON (Reuters) - President Barack Obama proposed plowing half the money America will save from the end of its wars in Iraq and Afghanistan into high-speed rail lines and repairs to the nation's creaking roads and infrastructure.

The plan likely will face an uphill battle in Congress where Republicans frequently point to high-speed rail projects as a waste of money at a time of tight budgets.

"So much of America needs to be rebuilt," Obama said in his annual State of the Union address on Tuesday, adding the United States has "crumbling roads and bridges."

He provided no dollar figures for his plan. The Congressional Budget Office has estimated savings from the wars would result in "about $440 billion less" in spending in 2012-2021.

Democrats have previously proposed using some war savings to help pay for infrastructure upgrades but such ideas have died in Congress.

CONSTRUCTION JOBS

In recent years, the United States has fallen sharply in the World Economic Forum's ranking of national infrastructure systems. In the forum's 2007-2008 report, American infrastructure was ranked sixth best in the world. The 2011-2012 report showed America at No. 16. The quality of U.S. roads is now about on par with those of Malaysia.

Obama said the other half of the money saved winding down the wars would go to paying down U.S. debt.

Aiming to sell his idea as potentially creating jobs, the president said his proposal would help construction workers left unemployed by the 2007-09 recession.

"There's never been a better time to build," Obama said, adding that he will sign an executive order within weeks to clear away red tape for public construction projects.

The White House said Obama's infrastructure plans include more investments in high-speed rail, which began with $8 billion from the 2009 economic stimulus plan enacted to fight the nation's deep recession.

Obama's affection for fast trains has met a good deal of resistance, however.

Nearly a year ago, Florida Governor Rick Scott rejected $2.4 billion in federal funds to build a high-speed line between Tampa and Orlando, saying it would put the state on the hook for billions of dollars it did not have. The fate of California's $100 billion project also looks unclear.

Last year, the president proposed a $556 billion, six-year transport plan that included high-speed funds, but which went nowhere in Congress.

(Additional reporting by Jason Lange and Richard Cowan in Washington and Jim Christie in San Francisco; Editing by Eric Walsh and Bill Trott)