President Obama on Monday called for an upfront investment of $50 billion to improve roads, railways and runways as part of a larger six-year strategy to update the nation’s aging infrastructure.
Obama announced the strategy at the Milwaukee Laborfest in Wisconsin hosted by the AFL-CIO and Milwaukee Area Labor Council and was joined by Labor Secretary Hilda Solis and Transportation Secretary Ray LaHood.
The president wants Congress to approve this first-year $50 billion “as soon as possible” and pay for it by scaling back oil and gas industry tax incentives, a senior administration official said.
“Over the next six years, we are going to rebuild 150,000 miles of our roads — enough to circle the world six times,” Obama said, according to remarks prepared for delivery the White House released ahead of his speech Monday afternoon. “We’re going to lay and maintain 4,000 miles of our railways — enough to stretch coast-to-coast.
"We’re going to restore 150 miles of runways and advance a next generation air-traffic control system to reduce travel time and delays for American travelers — something I think folks across the political spectrum could agree on.”
The plan will be fully paid for and “sets up an Infrastructure Bank to leverage federal dollars and focus on the smartest investments,” Obama said. It will include federal investments in high-speed rail and “will cut waste and bureaucracy” by consolidating and collapsing more than 100 federal transportation programs, he added.
It will also aim to reform “the haphazard and patchwork way we fund and maintain our infrastructure to focus less on wasteful earmarks and outdated formulas, and more on competition and innovation that gives us the best bang for the buck,” according to Obama's prepared remarks.
The administration is coming off a disappointing 9.6 percent unemployment rate announced by the Labor Department on Friday, and the message to the union crowd was directly tied to the key concern of jobs.
One administration official stressed to reporters Monday that the infrastructure investment strategy “is not a stimulus, immediate jobs plan” but rather a front-loaded six-year strategy. Administration officials did not have a specific job creation goal for the investment or an overall six-year dollar figure. The $50 billion would be “a significant portion” of the overall six-year investment, a senior administration official said. The White House is also proposing a "robust investment" in modernizing the air traffic control system, saying improvements would cut down on travel delays.
Surface transportation investment bills — after a struggle over the overall dollar amount — usually receive broad bipartisan support on Capitol Hill as lawmakers in both parties claim coveted earmarked dollars for their states and districts.
Obama promised the proposal “will not only create jobs now, but
will make our economy run better over the long haul.”
“It’s a plan that history tells us we can and should attract bipartisan support,” Obama said.
And that's where the bipartisanship stopped.
Obama bashed Republicans for opposing other economic efforts by the administration. “Even where we usually agree, they say no,” Obama said of the GOP. “They think it’s better to score political points before an election than actually solve problems.”
“These are the folks whose policies helped devastate our middle class and drive our economy into a ditch. And now they’re asking you for the keys back,” Obama added. “Do you want to give them the keys back? Me neither. And do you know why? Because they don’t know how to drive! At a time when we’re just getting out of the ditch, they’d pop it in reverse, let the special interests ride shotgun, and hit the gas, careening right back into that ditch.”
It is the first time that Obama has specifically begun to outline his strategy for a new six-year surface transportation plan, nearly a year after the last congressional strategy expired.
Obama did include infrastructure investment in high-speed rail and other infrastructure spending in last year’s economic stimulus plan. “The president has been ambitious to date in the area of investment,” a senior administration official said on a conference call with reporters. “And this is the continuation of that investment.”
Congress has a history of taking longer than intended to update transportation policy. Lawmakers had to extend surface transportation law for almost two years before approving the last surface transportation reauthorization bill in 2005. That bill expired in September last year and will likely continue to be extended into next year.
Congress has also had trouble approving a new Federal Aviation Administration reauthorization plan and has had to extend current FAA law 15 times so far since it expired more than two years ago.
Administration officials are “going to immediately start our discussions with both parties in Congress,” a senior official said. But the administration official declined to “make a prediction about timing” for when the upfront investment or full six-year plan would be set into law and said it “could all be in one bill or this could end up being divided up.” Full authorization plans, the official said, could “take quite a while and we’re mindful of that.”
Obama’s announcement Monday precedes a speech promoting business tax relief he will make Wednesday near Cleveland. This is expected to include expanding a research and development tax credit by about 20 percent, or $100 billion, over the next 10 years, simplifying it and making the credit permanent.
The president’s twin bill announcement of infrastructure spending and business tax relief are popular ideas in both political parties heading into the fall midterm election season.
But Obama will continue to run into opposition from many Republicans and oil-state Democrats by following recommendations outlined in his earlier budget proposal to scale back oil and gas industry tax incentives. This includes not allowing oil and gas companies to take advantage of a manufacturing tax credit other industries are allowed to use. He would also aim to pay for the initial $50 billion infrastructure investment by not allowing oil and gas companies to reduce the tax deduction companies can claim on foreign-earned income.
Democrats have sought to include these revenue raisers to pay for multiple legislative proposals – including a set of so-called “tax extenders” and to pay for renewable energy investments.
This story has been updated from earlier versions posted at 10:06 and 11:29 a.m.