March 3 (Bloomberg) -- President Barack Obama released billions of dollars today for public works projects to spur job growth and revive the economy.

“Fourteen days after I signed our recovery act into law, we are seeing shovels hit the ground,” Obama said today while visiting the Transportation Department in Washington. Of the 3.5 million jobs saved or created, about 400,000 will be rebuilding crumbling roads, bridges and schools, he said, with $28 billion devoted to highway construction.

Obama’s administration is working to direct funds from the $787 billion economic recovery package signed into law last month. The measure seeks to create jobs by spending almost $200 billion to rebuild the nation’s crumbling infrastructure.

Obama used the Transportation Department as a platform to illustrate the government is spending the stimulus money quickly as the economy continues to erode. He will highlight the stimulus bill again March 6 in a speech in Columbus, Ohio.

“Transportation projects that were once on hold are starting up again,” he said. More than 100 projects were funded today, with more than 200 construction projects to get under way “in the next few weeks.”

Highway projects will save or create about 150,000 jobs by the end of 2010, he said, more than the number of jobs lost over the last three years at Ford Motor Co., General Motors Corp. and Chrysler LLC combined.

‘Biggest Investment’

Vice President Joe Biden called it the “biggest investment on our nation’s roads, bridges, highways and tunnels since we built the interstate highway system.”

The stimulus plan includes $27.6 billion for highways, $8.4 billion to improve bus, rail and other forms of public transportation and $8 billion for high-speed rail and intercity passenger lines.

“The work begins today,” resurfacing a highway in Montgomery County, Maryland, yielding 60 “good jobs, and that’s how we’re going to get the country back on its feet,” Transportation Secretary Ray LaHood said before Obama spoke.

Obama, who on the campaign trail talked about the need for a more modern nationwide train system, also has proposed devoting an additional $5 billion to fast-rail development over the next five years, according to the Democratic president’s budget plan submitted last week to Congress.

His proposed transportation budget for fiscal 2010 is $72.5 billion, an increase of 2.8 percent from the $70.5 billion proposed for the agency for this year.

High-Speed Rail

The extra funds for high-speed rail development would be seed money for swifter train service in the U.S., though it won’t produce a super-fast system such as those in Europe and Japan, Ross Capon, executive director of the National Association of Railroad Passengers, said last week.

LaHood, 63, served in the House of Representatives for seven terms as an Illinois Republican before retiring. He represented a district that includes the headquarters of Peoria, Illinois-based Caterpillar Inc., the world’s largest maker of construction equipment.

Later in the day at the Interior Department, Obama announced more than $3 billion in stimulus money is earmarked for Interior Department projects. They range from improvements of tourist facilities at Yellowstone National Park in the mountain West to refurbishing the Statute of Liberty in New York to rebuilding schools on Indian reservations.

To contact the reporters on this story: Julianna Goldman in Washington at Jgoldman6@bloomberg.net; Kim Chipman in Washington at kchipman@bloomberg.net.

Last Updated: March 3, 2009 16:36 EST