U.S. government ditches transportation funding limits

WASHINGTON Wed Jan 13, 2010 1:20pm EST

A cyclist negotiates traffic along Market Street in San Francisco, California November 5, 2009. REUTERS/Robert Galbraith

A cyclist negotiates traffic along Market Street in San Francisco, California November 5, 2009.

Credit: Reuters/Robert Galbraith

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WASHINGTON (Reuters) - The Obama administration is broadening the standards for how the U.S. government funds public transportation projects in order to disburse money quickly and improve the environment.

"We want to base our decisions on how much transit helps the environment, how much it improves development opportunities and how it makes our communities better places to live," Transportation Secretary Ray LaHood said in announcing the change on Wednesday.

The Bush administration began using a formula in 2005 to approve projects that chiefly relied on commute times and costs, according to LaHood's agency.

In a speech to the Transportation Research Board, LaHood promoted the idea of "livability," or combining transportation options with urban development plans to make it easier for people to move through their towns while lessening the impact on the environment.

LaHood said the budgeting change will give the green light to popular streetcar projects and will strengthen relationships among the Transportation and Housing departments and the Environmental Protection Agency.

As part of the livability approach, the federal government will soon award $1.5 billion in economic stimulus funds to "innovative" projects across the country, LaHood said.

He said the government will also award $8 billion in grants soon to lay the groundwork for high-speed passenger rail.

"More than 30 rail industry manufacturers and suppliers have promised to establish or expand their base of operations in the United States if they're chosen by the states to build America's new high-speed rail lines," he said.

He pressed Congress to finish work on a job creation bill that includes major investments in transportation. Also known as the second stimulus, the bill passed by the House of Representatives in December would provide additional money for states to cover the costs of improving roads and bridges.

The Senate has yet to take up the legislation.

(Reporting by Lisa Lambert; Editing by James Dalgleish)

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