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Obama Says `Crumbling' Infrastructure Hinders Growth

President Barack Obama proposed a $50 billion transportation spending program that he said would boost jobs in the construction, manufacturing and retail industries and help rebuild the nation’s infrastructure.

“Crumbling” roads, bridges, airports and rail lines are hindering U.S. economic growth, Obama said after meeting with members of his Cabinet, former transportation secretaries, as well as governors and mayors from around the country.

Obama’s remarks, promoting his infrastructure spending plan announced last month, came the week after New Jersey Governor Chris Christie canceled construction of a commuter-rail tunnel link to New York, citing cost overruns on the $8.7 billion project.

A report by the Treasury Department and White House Council of Economic Advisers said that about 90 percent of the new jobs in those three segments of the economy would fall in the middle- class range. The construction industry, where unemployment exceeds 17 percent, would benefit the most, with 61 percent of the jobs created. The unemployment rate is 9.6 percent nationally.

“For years we have deferred tough decisions” on rebuilding transportation systems, Obama said. “It should not take another collapsing bridge or failing levee to shock us into action.”

Photographer: Mark Wilson/Getty Images

President Barack Obama and Transportation Secretary Ray LaHood. Close

President Barack Obama and Transportation Secretary Ray LaHood.

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Photographer: Mark Wilson/Getty Images

President Barack Obama and Transportation Secretary Ray LaHood.

Competitive Edge

The infrastructure spending also will keep the U.S. competitive with other nations that are investing in systems to move goods and information.

Obama, who outlined the plan last month in Milwaukee, said today that the European Union and China spend more on roads, rails and related projects than does the U.S.

“They’re creating jobs today, but they’re also playing to win tomorrow,” Obama said. “The bottom line is our shortsightedness has come due. We can no longer afford to sit still.”

Representative John Mica, the top Republican on the House Transportation and Infrastructure Committee, criticized the plan for being too little, too late and postponing a long-term surface transportation spending bill.

“Unfortunately this last minute report is a pitiful and tardy political excuse for the administration having killed last year any chance for a long-term transportation measure,” Mica, of Florida, said in a statement. “Even more astounding is their regurgitation and attempted justification of a $50 billion spending proposal while more than 60 percent of the stimulus infrastructure dollars remain unspent.”

Momentum

Today’s White House meeting was called “to keep the momentum and the drumbeat going, so when Congress comes back, hopefully one of their priorities will be $50 billion, and then next year, the six-year plan” of about $500 billion, Transportation Secretary Ray LaHood told reporters after Obama’s statement.

Even if Republicans gain seats in the Nov. 2 election, the White House is counting on a bipartisan support for a reauthorization of transportation spending legislation next year. LaHood said talks about the exact size and shape of the measure are under way without giving specifics on how it might be funded. Obama has said he opposes raising the federal gasoline tax, the primary source of federal funding for highways.

“The tradition of Congress is to work in a bipartisan way” on transportation, said LaHood, a former Republican congressman from Illinois. “This will be paid for; this will not be put on the debt.”

Stimulus

Asked about skepticism about the value of $48 billion in public works programs in the stimulus package, LaHood was blunt.

“The idea that stimulus didn’t work is nonsense,” he said.

LaHood also said the administration is continuing to discuss options with Christie on the tunnel over the next two weeks in an effort to salvage the project, which would double the number of commuter trains to New York at peak times.

The administration has committed $3 billion to the job, its largest contribution to a single project.

To contact the reporters on this story: Roger Runningen in Washington at rrunningen@bloomberg.net; Angela Greiling Keane in Washington at agreilingkea@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net.

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