US President Obama has set out plans to spend $50bn (£32bn) on infrastructure as part of a new bill aimed at creating new jobs.
The American Jobs Act would set aside £17bn for roads and rail maintenance and upgrades, £2.5bn for work on new rail corridors and £3.8bn to upgrade existing guided busways. Obama said the new inititative will create immediate jobs and will be paid for by closing corporate tax loopholes.
The bill also includes plans for long-term transport investment through a subsidiary Building and Upgrading Infrastructure for Long-Term Development Act. It aims to tackle the US’s long-term under-investment by creating a form of infrastructure bank to mobilise private investment. An American Infrastructure Financing Authority would be set up as a wholly-owned government corporation that will provide direct loans and loan guarantees to facilitate investment.
But industry observers were sceptical. The new inititative is almost a carbon copy of Obama’s 2012 budget request which included £32bn for transportation to “jump start” a proposed £350bn six-year surface transportation bill. This failed to win Congress approval because the Obama Administration failed to show how the proposed programme would be paid for and because there was no convincing evidence that the programme would promptly create new jobs. The new proposals will also need the approval of Congress and the Senate.
“The same reasons that led Congress to ignore the Administration’s FY 2012 transportation budget request will likely cause the lawmakers to reject the new transportation initiative,” said public policy consultant Ken Orski. “They are sceptical that a fresh infusion of funds will succeeed where the first stimulus failed. Doing the same thing over and over again and expecting different results may not be exacly insanity but it does suggest a certain unwillingness to face up to reality.”