US 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 September 30 and the president is seeking to head off a battle over differences between the House and Senate and avoid a lapse in funding and tax revenue as occurred when the Federal Aviation Administration (FAA) was partially shut down for two weeks when the two chambers couldn’t agree on legislation to extend the FAA’s authority.
The US economy, job growth and the nation’s long-term debt will be at the centre of debate when lawmakers return from their August recess next week. Obama is set to unveil next week a package of proposals, including tax breaks to spur hiring and more spending on infrastructure. Republicans, who control the House, have signalled they’ll fight new spending proposals or measures to raise government revenue.
Obama said the transportation fund legislation is critical to keeping construction workers on the job and the nation’s roads and mass-transit systems safe. He also said he’s directing federal agencies to identify “high priority” infrastructure projects that can boost hiring.
QUICKER PERMITS
“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.
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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 US Chamber of Commerce, and AFL-CIO President Richard Trumka.
The debate is happening against the backdrop of a sluggish recovery and an unemployment rate that was at 9.1 per cent in July.
Gross domestic product climbed at a 1 per cent annual rate from April through June, down from a 1.3 per cent prior estimate, figures released by the Commerce Department on August 26 showed. Combined with the 0.4 per cent 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 per cent in July.
JOBS AT RISK
If the law isn’t renewed, Obama said, about 4,000 construction workers would be out of work. If the law isn’t renewed in 10 days, the government won’t collect almost $1 billion in fuel taxes that fund highway construction.
“And if it’s delayed even longer, almost one million workers could lose their jobs over the course of the next year,” Obama said.
The legislation also authorises the federal 18.4 cent-per-gallon gas tax, which has been at the same level since 1993. Letting in lapse would mean that oil companies including Exxon Mobil Corp, BP Plc, Sunoco Inc 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 September 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.
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 January 31, 2012, to give lawmakers time to reach a compromise, the journal for the American Association of State Highway and Transportation Officials reported on August 19.
BICYCLE PATHS
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 November 23 deadline to offer a proposal.