Obama Urges Congress to Extend Transportation Funding

August 31, 2011

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President Obama urged Congress this morning to extend the federal highway bill, set to expire on September 30th, which he said would protect a million jobs.

According to the President, a failure to renew funding would cause 4,000 workers to be immediately furloughed without pay, and that a long delay could lead to a million workers losing their jobs over the next year. Unemployment is currently around 9%.

President Obama was joined by Transportation Secretary Ray LaHood, AFL-CIO President Richard Trumka and Chamber of Commerce COO David Chavern.

There are competing proposals for extending funding. The Senate proposal lasts only two years and would cost $109 billion, but keep funding levels fairly stable. The House proposal would cost $230 billion over six years and would cut funding by about one-third.

President Obama appealed to Congress to set aside political differences to pass an extension in a timely manner. The issue of highway funding comes hot on the heels of a protracted battle over raising the national debt limit, which resulted in a drop in the U.S. credit rating, and another bitter fight over funding of the Federal Aviation Administration. Around 4,000 workers were furloughed for nearly two weeks as a result of the latter impasse.

The President added that transportation spending also needs to change.

"We need to reform the way transportation money is invested," he said. "No more bridges to nowhere."

The Highway Trust Fund faces insolvency next year after more than half a decade of declining balances. It is unclear how money will be raised to replenish the fund: Obama and Republicans have both ruled out a gas tax, and are gravitating toward a system of private-sector investment.

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