Obama Calls For ‘More Creative’ Ways to Pay For Infrastructure

At a meeting today with his outside economic recovery advisers, President Obama emphasized the importance of shoring up the nation’s crumbling infrastructure but warned that the mounting federal deficit would require "more creative, new approaches to financing" investment in transit, bridges, and road repairs.

Obama_Nobel_1499199c.jpgPresident Obama (Photo: AP)

"I think my team will testify when we got several trillion dollars worth
of infrastructure that is falling apart, we need to put people to work,
doing the work that America needs done," Obama told reporters. "But we’re also in an era of
fiscal constraint, which means that we’ve got to start finding more
creative, new approaches to financing these projects."

The economic recovery meeting comes as the White House and congressional Democrats weigh the need for stronger efforts to help stem the rising unemployment rate.

Last week’s surprising announcement of 3.5 percent growth in the U.S. gross domestic product (GDP) prompted a cautiously positive response from the Obama administration, reflecting concern that job losses could continue into next year.

Transportation spending is playing a central role in that economic recovery debate, with several senior members of Congress touting its job creation potential. The Senate’s No. 2 Democrat, Dick Durbin (IL), on Thursday suggested that lawmakers begin working on proposals to boost infrastructure investments, including a possible "front-loading" of the House’s stalled six-year transport bill.

But with the deficit at its highest level since World War II and a gas tax increase already ruled out by the White House, what kind of "more creative, new approaches" would the president’s team be prepared to support? During unrelated testimony at the House infrastructure committee on Thursday, Transportation Secretary Ray LaHood indicated that lack of funding continues to keep the issue in limbo:

The
president wants a very strong, comprehensive, robust transportation
bill. … We believe
it can make a difference; we believe it’ll put people to work.

But we also believe
we’ve got to find 4[00] or 500 billion dollars to pay for it, because
that’s probably what it takes to have the kind of bill that we all want
— that you want and that we want. We need some time to do that, to
put together a good bill and to find the money to do it.

Put simply, the same revenue gap that has surrounded the transport bill since June continues to puzzle the executive and legislative branches. The House infrastructure committee’s chairman, Jim Oberstar (D-MN), has projected that his legislation would require $140 billion in extra funds over its six-year lifetime, excepting money earned from the federal gas tax.

There is certainly no shortage of creative proposals on the table; Democratic lawmakers and the White House have both urged the creation of a National Infrastructure Bank to leverage private-sector contributions, while Pennsylvania Gov. Ed Rendell (D-PA), co-chairman of the advocacy group Building America’s Future, last week floated the idea of more open tolling on existing interstate highways.

Still, it’s difficult to see how infrastructure spending can gain the necessary political momentum without the administration throwing its weight behind the near-term passage of a specific idea or suite of ideas — "[putting] together a good bill and [finding] the money to do it," in LaHood’s words. And if the U.S. DOT’s support for an 18-month extension of existing law is any guide, that kind of specific, urgent endorsement is unlikely to come until 2011.

  • Peter Smith

    ‘more creative’ == wall street privatization (you’re welcome, Goldman)

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