Obama to Press Congress on Extending U.S. Transportation Funding

President Barack Obama, along with labor and business leaders, today will urge Congress to extend legislation funding highways and mass-transit projects before it expires next month as a way to protect jobs.

Obama’s call for a clean extension of the surface transportation bill comes less than a month after congressional Republicans and Democrats ended a standoff over aviation funding that temporarily displaced thousands of federal and construction workers. He also plans to announce next week a package of proposals to spur job creation and improve the economy.

The president will be joined today at the White House by David Chavern, chief operating officer for the U.S. Chamber of Commerce, and AFL-CIO President Richard Trumka to press lawmakers for an extension of the bill, according to the president’s schedule released by the White House. The legislation, set to expire Sept. 30, also authorizes the federal 18.4 cent-per-gallon gas tax.

Obama will argue that the extension would protect almost 1 million U.S. jobs and strengthen the nation’s infrastructure, the administration statement said.

The U.S. economy and the nation’s long-term debt will be at the center of debate when lawmakers return from their August recess next week. Gross domestic product climbed at a 1 percent annual rate from April through June, down from a 1.3 percent prior estimate, figures released by the Commerce Department on Aug. 26 showed.

Combined with the 0.4 percent annual rate of growth in the first three months of the year, the past two quarters were the weakest of the recovery that began in mid 2009. The unemployment rate was at 9.1 percent in July.

House, Senate Differences

The Senate, where Democrats have the majority, is at odds with the Republican-controlled House over the transportation funding measure.

Senator Barbara Boxer, a California Democrat who heads the Environment and Public Works Committee, has outlined a proposal for a $109 billion, two-year extension of the act with support from Republican Senator James Inhofe of Oklahoma.

John Mica, the Florida Republican who is chairman of the House transportation committee, has put forward a version that would cut future funding levels by about one-third.

Boxer has said the House plan would cause the loss of 500,000 highway jobs and an additional 100,000 transit jobs.

Shorter Extension

Boxer told transportation industry groups she would propose extending the current legislation through Jan. 31, 2012, to give lawmakers time to reach a compromise, the journal for the American Association of State Highway and Transportation Officials reported on Aug. 19.

The Highway Trust Fund faces insolvency next year after six years of declining balances, according to the Congressional Budget Office. Obama and Republicans have ruled out a gas-tax increase and have suggested making up the shortfall by attracting more private-sector funding. The federal gasoline tax was last raised in 1993.

The differences over the transportation bill will be debated amid efforts to trim the nation’s long-term deficit.

A 12-member supercommittee of lawmakers from the House and Senate was created earlier this month to find $1.5 trillion in budget savings over 10 years to avoid automatic, across-the- board spending cuts. The panel was given a Nov. 23 deadline to offer a proposal.

The drive to cut the deficit also is constraining Obama’s options on job creation. He’ll unveil his jobs agenda next week, including proposals, more infrastructure spending, tax incentives to spur hiring, a reduction in the employer portion of the payroll tax credit and changes to unemployment insurance to subsidize worker retraining.

To contact the reporter on this story: Margaret Talev in Washington at mtalev@bloomberg.net.

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

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