President Obama proposes new transportation bill

US President Barak Obama has proposed a US$ 302 billion, four year bill to finance construction of surface transportation infrastructure. Some US$ 150 billion of the funding will come from a proposed one-off transition tax on multinational companies’ off-shore earnings.

Among the policy objectives within the proposal is a US$ 63 billion to the US Highway Trust Fund, which a statement from the White House said would ensure its solvency for four years. The Highway Trust Fund is a ring-fenced budget for highway construction and renovation which is raised through a tax on road fuel.

In addition, the is said to prioritise “Fix-It-First” investments , which is to say the most urgently needed repairs required to improve safety on roads, bridges subways and bus services, “With particular attention to improving roads and bridges in rural and tribal areas.”

A total of US$ 206 billion is ear-marked in the bill for highway investment, which the White House says would increase investment by +22% per year over the four-year duration of the bill. Of the remaining money, US$ 72 billion would be invested in transit systems, US$ 19 billion in rail systems and US$ 9 billion to fund innovation in the sector through programmes such as the Transport Investment Generating Economic Recovery (TIGER) competitive grant programme, which allows local law makers to bid for Federal funds on a project-by-project basis.

Announcing the proposal at a speech in St Paul, Minnesota, president Obama said, “I’m going to send Congress a budget that funds rebuilding our transportation infrastructure in a more responsible way – by doing it over four years, which gives cities and states and private investors the certainty they need to plan major projects.”

Responding to the announcement, Stephen E. Sandherr, CEO of the Associated Contractors of America (AGC) trade association said, “It is encouraging to see President Obama pushing for a long-term bill to fund desperately needed highway and transit investments. We look forward to reviewing the details about this measure, which recognises the federal transportation funding shortfalls that threat to curtail investments in highway and transit projects as early as this summer.”