Obama Urges Congress to Pass Extension of Transportation Bill to Save Jobs

President Barack Obama urged lawmakers to extend legislation to fund highways and mass- transit projects, saying a failure to do so will cost thousands of construction jobs and delay needed infrastructure repairs.

“It’s inexcusable to put more jobs at risk in an industry that’s already been one of the hardest hit in the last decade,” Obama said at the White House today.

The current law expires Sept. 30 and the president is seeking to head off a battle over differences between the House and Senate to avoid a lapse in funding and tax revenue as occurred when the Federal Aviation Administration was partially shut down for two weeks when the two chambers couldn’t agree on legislation to extend the FAA’s authority.

The U.S. economy, job growth and the nation’s long-term debt will be at the center of debate when lawmakers return from their August recess next week. Obama has requested a joint session of Congress on Sept. 7 to unveil a package of economic proposals, including tax breaks to spur hiring and more spending on infrastructure. Republicans, who control the House, have signaled they’ll fight new spending proposals or measures to raise government revenue.

Obama said the transportation legislation is critical to keeping construction workers on the job and the nation’s roads and mass-transit systems safe.

Priority Projects

He also directed the Departments of Agriculture, Commerce, Interior, Transportation and Housing and Urban Development to each select three “high-priority” construction projects already funded that can be completed within 18 months.

Obama said the White House Council on Jobs and Competitiveness headed by Jeffrey Immelt, chief executive officer of General Electric Co., recommended the directive.

“These are projects that are already funded and with some focused attention we could expedite the permitting decisions and reviews necessary to get construction under way more quickly,” Obama said.

To illustrate what he said was broad support for action on legislation, Obama was joined for his remarks in the Rose Garden by David Chavern, chief operating officer for the U.S. Chamber of Commerce, and AFL-CIO President Richard Trumka. In a separate speech in Washington today, Chamber President Thomas Donohue endorsed spending on highway construction to create jobs.

‘Scare Tactic’

Brendan Buck, a spokesman for House Speaker John Boehner, an Ohio Republican, said Obama’s remarks were “transparently political” and a “scare tactic” because Republicans aren’t threatening to let the surface transportation legislation expire.

“Republicans support an extension of the highway bill and appreciate the need for a long-term solution for infrastructure projects,” Buck said in a statement.

The debate is happening against the backdrop of a sluggish recovery and an unemployment rate at 9.1 percent in July.

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.

Jobs at Risk

If the law isn’t renewed, Obama said, about 4,000 construction workers would be out of work. If an extension is delayed for 10 days, the government won’t collect almost $1 billion in fuel taxes that fund highway construction, he said.

“And if it’s delayed even longer, almost 1 million workers could lose their jobs over the course of the next year,” Obama said.

The legislation also authorizes the federal 18.4 cent-per- gallon gas tax, which has been at the same level since 1993. Letting it lapse would mean that oil companies including Exxon Mobil Corp. (XOM), BP Plc (BP), and Sunoco Inc. (SUN) may be able to keep about $78.4 million a day meant for highway construction.

Obama also called on lawmakers to finish work on a longer extension of the FAA’s spending authority. The short-term measure that enabled FAA to resume full operations earlier this month expires on Sept. 16.

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.

House Version

John Mica, the Florida Republican who is chairman of the House Transportation Committee, has put forward a six-year version of the proposal 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.

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.

Hurdles

There are hurdles in the Senate as well. A spokesman for Senator Tom Coburn said yesterday that the Oklahoma Republican will attempt to block an extension of legislation if requirements to pay for bicycle paths and road beautification projects aren’t removed.

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 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.

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