How Transportation Should Play Into Obama’s Jobs Plan


When President Obama outlines his plan to create jobs and jumpstart the U.S. economy during a joint session of Congress tonight, transportation and infrastructure are sure to be a prominent theme. The President is expected to propose $300 billion in stimulus spending to spur hiring, which is likely to include funds for critical infrastructure projects. Since it is unclear what the President’s job plan will entail, here are some suggestions on how the President can optimize stimulus funds to create jobs and get shovel-ready projects going.

  • Call on Congress to pass an immediate, 2-year extension of a transportation bill. When the current authorization expires on September 30, 2011, federal highway projects will come to a grinding halt, states and cities will stop receiving Federal transportation aid, and hundreds of thousands of jobs will be thrown into jeopardy. To delay an extension would destabilize critical infrastructure projects and could cost the U.S. and state governments billions of dollars. Extending the transportation bill should be priority #1 for Congress.
  • Streamline the Federal approval process for infrastructure projects. Bureaucratic red tape severely diminishes the effectiveness of stimulus funds. In some cases, Federal highway projects have taken over a decade to complete due to onerous and duplicative Federal approval requirements. House Transportation and Infrastructure Committee Chairman John Mica (R-FL) took aim at the lengthy period it has taken for infrastructure projects to get funded through the American Recovery and Reinvestment Act of 2009 (the “stimulus bill”) and has proposed to streamline the process. President Obama should echo this concern. Accelerating project delivery is critical to spurring growth, creating jobs, and maximizing the effectiveness of taxpayer dollars.
  • Provide “Stimulus Grants” Directly to States. To ensure that the most-needed projects take priority, new stimulus funding should go directly to states in the form of formula grants. The economic downturn is being felt differently in each state, and each state’s recovery will thus require a different approach. The President’s jobs proposal should empower states and Governors  with the authority to award stimulus funds.

Though it was encouraging to hear Obama push for reauthorization of the transportation bill in his weekend radio address to the nation last Saturday, it is unclear whether Congress will heed the President’s warning to pass a bill to stave off job losses and $1 billion in lost revenue to states. And with strong opposition to additional Federal spending from House and Senate Republicans, White House officials have acknowledged that a stimulus plan of the size Obama is expected to introduce is unlikely to gain traction on the Hill.

The President’s speech will be broadcast live tonight at 7pm EST.

President Obama Renews Call for Transit Bill Extenstion

Photo: Transportation for America

With less than four weeks until Federal surface transportation programs expire – along with the fuel taxes that fund them – President Obama reiterated his support for an extension of the transportation legislation. In his weekly radio address to the nation today, Obama warned that a failure to extend the transit programs could threaten “hundreds of thousands of jobs.”

Read the full Bloomberg News article on the President’s radio address here.

When Congress languished to reauthorize funding for the Federal Aviation Administration in July 2011, 4,000 employees were furloughed and 200 construction jobs were halted for nearly two weeks. The partial shutdown cost the government $30 million each day in airline taxes it could not collect.

Failure to enact either a full reauthorization or a temporary extension of surface transportation programs would have even greater repercussions to the fragile U.S. economy. The U.S. Department of Transportation estimates that a delay of 10 days to extend the legislation would cost the U.S. $1 billion in lost fuel tax receipts and furlough some 4,000 government officials. If the Highway Trust Fund – which funds most highway and mass transit programs – were to shutdown, most if not all of the 1.8 million transportation and construction jobs it directly supports would be threatened. Nearly 118,000 jobs are linked to Federal highway and mass transit programs in New York State.

House and Senate leaders must reconcile wildly different reauthorization proposals when Congress returns from its summer recess this week. House Transportation and Infrastructure Committee Chairman John Mica (R-FL) has proposed a $230 billion, 6-year full reauthorization that limits Highway Trust Fund outlays to the amount of fuel taxes received and cuts authorized spending by 35 percent from current levels. Senate Environment and Public Works Chairman Barbara Boxer (D-CA) has proposed a $110 billion, 2-year extension.

The current authorization will expire September 30.