Obama to announce $50bn infrastructure job plan


US President Barack Obama will announce on Monday a six-year plan to revamp the United States’ road, railways and runways with a $50 billion up-front investment to jump-start job creation, the White House said.

The plan is one of several economic initiatives that Obama is due to unveil this week aimed at generating some desperately needed US job growth and limiting predicted Democratic losses in Nov. 2 congressional elections.

Struggling to persuade Americans that his economic policies are working, Obama will use appearances in Milwaukee and Cleveland this week to set the tone for the fall campaign.

The argument he will make on the trips and a rare White House news conference is this: Democratic policies have stopped the bleeding and produced some economic growth. Yes, more needs to be done, but Republicans would bring back ideas, he will argue, that propelled the country into the deepest recession in 70 years.

Obama is to make his case with a speech in Milwaukee to a labor rally on Monday, the Labor Day holiday that marks the informal start of the election campaign season.

The White House did not say how it proposed to pay for the infrastructure plan, but an official said one option under consideration was to close tax breaks for oil and gas companies.

The official said Obama was committed to working with Congress to fully pay for the plan.

Under the six-year plan, Obama is proposing to:

– Rebuild 150,000 miles (240,00 km) of roads;

– Construct and maintain 4,000 miles (6,400 km) of rail;

– Rehabilitate or reconstruct 150 miles (240 km) of runway and modernize the air traffic control system and;

– Set up an infrastructure bank to leverage private, state and local capital to invest in projects.

The White House said the bank would end the existing system of spending on infrastructure projects that was based more on “geography and politics than demonstrated value.”

Labor Secretary Hilda Solis told NBC’s “Today” show that the infrastructure overhaul would “put people back to work immediately.”

Obama’s visit to Cleveland on Wednesday promises to be more substantive. It is the same city where the top Republican in the US House of Representatives, John Boehner, recently urged the president to fire his economic team.

Administration officials said he will propose making permanent the business tax credits for research, which the White House projects will cost $100 billion over 10 years and would be paid for by ending some corporate tax breaks.

Other items that could also be talked about by Obama are a payroll tax holiday, extending tax cuts for the middle class and increasing money for clean energy.

STALLING RECOVERY?

The Obama administration is scrambling for solutions to a stubbornly high 9.6 percent unemployment rate and invigorate an economy whose recovery from the recession is in danger of stalling.

University of California economics professor Laura Tyson, a member of the president’s economic advisory board, said targeted job policies such as a partial payroll tax holiday and permanent tax cuts for research and development should be priorities in the current environment.

“All of us here agree we need targeted policies for jobs and right now the deficit is not a major issue,” Tyson told CBS’s “Face the Nation” program on Sunday. “The major issue is a slow economy, lack of jobs … we really need to get our priorities right and focus on targeted job creation.”

The White House says patience will be required.

“It took years to create our economic problems, and it’ll take more time than any of us would like to fully repair the damage,” said White House communications director Dan Pfeiffer. “There are no silver bullets and anyone who is promising them is not being straight with the American people.”

Democrats are facing an angry electorate that could end their one-party rule in Washington. Many experts believe Democrats could lose control of the House of Representatives on Nov. 2 and perhaps even the Senate, which would make it harder for Obama to advance his domestic agenda on issues like climate legislation.

loading...
loading...