Analysis: Obama pitch on roads an uphill prospect

Reuters News
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Posted: Sep 07, 2011 3:25 PM
Analysis: Obama pitch on roads an uphill prospect

By John Crawley

WASHINGTON (Reuters) - President Barack Obama's call to boost transportation spending will be a hard sell to a divided Congress, which must urgently address near-term infrastructure needs to simply save jobs, not create them.

Obama will promote in a speech on Thursday more robust investment in road and bridge construction as part of a comprehensive agenda to upgrade infrastructure and revive a stalled economy defined by 9.1 percent unemployment.

While he won a 2009 economic stimulus package that included $30 billion for roads and $8 billon for rail, his $50 billion plan for highway, bridge, rail projects went nowhere in 2010 when Congress was controlled by his fellow Democrats.

Republicans now run the House of Representatives and bipartisan goodwill over government spending and revenue has been as rare this summer as a cool breeze in the swamp-like swelter of Washington.

Obama's most promising option may be to push regulators to free up projects tangled in red tape -- a loud complaint of Republicans. But only about 2 percent of highway construction requires the type of stringent environmental or other strict bureaucratic reviews that significantly holds up work.

Other infrastructure priorities include telecommunications, water, energy projects, and school construction.

Obama's job creation plans aside, the administration warns that as many as 500,000 current jobs could be lost if Congress does not act by September 30 to extend the law allowing Washington

to reimburse states for spending on road construction.

Washington spends $110 million per day and funnels $42 billion annually to states for transportation infrastructure upgrades. Construction employment in California, New York, Texas, Florida, Illinois, and New Jersey would be hard it if spending were to lapse, according to Transportation Department figures.

Simultaneously, Congress must extend federal authority to collect the S18.4 cents per gallon tax on gasoline, which funds highway construction spending and also expires at month's end.

"The situation we're facing in transportation right now is not losing jobs," said John Horsley, executive director of the American Association of State Highway and Transportation Officials.

FAR APART ON LONG-TERM TRANSPORTATION BILL

While transportation panel leaders are pushing for renewal, Democrats are concerned that Republicans may try to hold up the extensions to underscore points on spending and taxes.

A spokesman for House Speaker John Boehner said "no one has suggested" the road extension would not be renewed.

In the Democratic-controlled Senate, Public Works Chairman Barbara Boxer and Banking Committee Chairman Tim Johnson have sent letters to colleagues outlining jobs in all states that would be at risk if transportation funding lapses.

Boxer and her House counterpart, John Mica, will propose extensions this week. Boxer's plan runs through January. Mica has not given a time frame. They back extensions without policy changes, a preference expressed by Obama last week.

Highway funding has relied on similar extensions since the last permanent law expired in September 2009, and yet another could be required next year if Congress continues to struggle with efforts to craft a long-term transportation bill.

House and Senate lawmakers are far apart on the substance of long-term financing. Formal proposals have yet to emerge, but outlines call for level spending or sharp cuts.

"Reaching a compromise later in the year, when the presidential race is in full swing will be a daunting challenge," said Ken Orski, a public policy consultant and transportation expert.

Erich Zimmerman, a senior policy analyst with watchdog group Taxpayers for Common Sense, believes it will be more than an uphill fight to get a deal without concessions.

"You've got enormous challenges," he said.

(Additional reporting by Lisa Lambert, editing by Jackie Frank)