January 21, 2010 / 7:17 PM / 8 years ago

New push for infrastructure funding in US jobs bill

WASHINGTON, Jan 21 (Reuters) - The Obama administration, key lawmakers and big trade groups want to include billions of dollars for transportation and infrastructure in pending legislation aimed at easing stubbornly high U.S. unemployment.

The move reflects cold calculations about what initiatives will take priority amid joblessness that is near a 26-year high at 10 percent and rapidly shifting political sands in Washington ahead of next November’s congressional elections.

With prospects for passing stand-alone legislation for long-term funding of highway and transit projects unlikely in 2010, Transportation Secretary Ray LaHood pushed an alternative at a meeting with U.S. mayors on Thursday.

LaHood said he is asking the Senate to broadly expand a $1.5 billion program included in last year’s economic stimulus package that allows state and local governments to use money for a wide spectrum of projects.

The grants, known as TIGER, for Transportation Investment Generating Economic Recovery, comprised a sliver of transportation money included in the stimulus but officials note that interest has been strong with local communities scrambling for infrastructure funds.

Lahood told the mayors that this “discretionary money allows all of you to have direct access to money to do innovative, creative things in your community.”

Separately, Pennsylvania Governor Ed Rendell planned to push top White House economic advisers on Thursday to embrace the creation of a national infrastructure bank, an independent institution that would finance capital works projects.

Rendell told Reuters in an interview that a coalition of supporters that include transportation trade associations are pushing for the bank proposal to be included in the legislative package.

They believe a well capitalized program would streamline infrastructure funding and financing, attract private investment, simulate broad sectors of the economy and create jobs.

“We want to get the bank up and running,” Rendell said, noting strong interest from investment banks and hedge funds in partnering with the government on infrastructure upgrades. “We don’t want to lose time on this.”

Obama proposed an infrastructure bank nearly a year ago with an initial $5 billion in his budget proposal. But the U.S. Congress refused to grant money and the Senate has been slow to weigh legislation introduced by Banking Committee Chairman Christopher Dodd to set it up.

Dodd, a Connecticut Democrat who has said he will not seek reelection next fall, plans to hold a hearing on the plan.

Obama, however, is likely to broach the idea in a closed-door meeting with the mayors on Thursday.

The House of Representatives in December passed a $155 billion jobs package which, like the 2009 economic stimulus plan, is intended to save and create jobs through direct federal spending and financing.

The bill would provide $48.3 billion for construction projects, including highways, transit and sewer and water upgrades. Another $4 billion would go to school repairs and $2 billion to fix up public and rental housing units.

The Democratic-led proposal in the Senate is due to be unveiled in coming weeks and is likely to differ substantially from the House version. (Editing by Leslie Adler)

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