July 7, 2011 / 9:20 PM / in 6 years

Democrats, business spurn transportation plan

WASHINGTON (Reuters) - Groups from across the U.S. political spectrum on Thursday scorned a Republican proposal to slice money for transportation projects, saying the lower funding levels would threaten the country’s infrastructure and jeopardize jobs.

The U.S. Chamber of Commerce said the plan unveiled by House Transportation Committee Chairman John Mica was “unacceptable,” and said it would “destroy -- rather than support -- existing jobs.”

Mica’s plan would authorize spending of about $35 billion a on transportation, about a 35 percent cut from current levels.

Democrats from the House of Representatives and the Senate, where Democrats still have control, said the spending levels Mica suggested would eliminate 500,000 jobs next year. They estimated 140,000 of those jobs would be in public transportation.

The Chamber of Commerce said the unemployment rate in the construction industry is currently 16.3 percent and higher spending levels would help create much-needed new jobs.

“While we have yet to see much of the details of this legislation, based on the funding levels alone, it appears that this bill can best be called the ‘Republican Road to Ruin,'” Representative Nick Rahall, the most powerful Democrat on the transportation panel, said in a statement.

Mica has yet to introduce the long-awaited legislation, instead releasing a summary of key points on Thursday. He has said a resolution in the House has tied his hands and he can only spend revenues from the gas tax.

Consumers are not interested in raising the levy, and the revenues are dwindling from reduced driving and more fuel-efficient cars. As the funds have shrunk, the federal government has stepped in with other revenues.

“That’s a pretty steep hit,” said David Goldberg, spokesman for Transportation for America, an advocacy coalition. “We didn’t hear a whole lot of the vision of what the bill is supposed to accomplish.”

Mica had said his plan, which will put more money into state infrastructure banks and eliminate some steps in the approval process for project funding, would give states more flexibility.

But the American Association of State Highway and Transportation Officials is still worried. “We continue to have concerns about the proposed funding levels included in the bill,” said the group’s executive director, John Horsley, in a statement.

He noted the current stop-gap spending bill expires September 30, leaving little time to pass the sweeping plan.

Earlier this year, Mica said he would consider reviving the stimulus plan’s Build America Bonds in the legislation. But on Thursday he would not commit to bringing them back, saying some had not been issued for infrastructure as required and the federal rebate sent to issuers had been too generous.

He has also said voters do not want tax hikes or unnecessary spending, pointing to the November election when Republicans swept to power in the House of Representatives and many statehouses on vows of thriftiness.

But Senate Commerce Committee Chairman Jay Rockefeller, a Democrat, said Congress must pass “a plan that combines smart, targeted spending cuts with smart, targeted revenue increases.”

The Senate has not introduced a bill.

Reporting by Lisa Lambert; Editing by Leslie Adler

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