President Obama’s $447-billion plan to create jobs has a substantial infrastructure component--$105 billion for transportation, school upgrades and housing rehab projects.
Obama' proposed "American Jobs Act," which he outlined in a Sept. 8 speech to a joint session of Congress, also contains extended or expanded tax breaks for companies, aimed at encouraging them to hire additional workers and spend more on capital equipment.
Obama called on Congress to pass the proposal "right away," but few measures move immediately on Capitol Hill. And House Republicans--who have fought Obama on other legislation since they took control of the chamber early this year--indicated they won't accept the plan as the President presented it.
Initial reaction from House GOP leaders wasn't hostile, but signaled they will pursue their own priorities on jobs legislation. Speaker John Boehner (R-Ohio) said, "The proposals the President outlined....merit consideration. We hope he gives serious consideration to our ideas as well."
House Majority Leader Eric Cantor (R-Va.) said in a televised appearance on Sept. 9 that Obama seemed to be taking an "all or nothing" approach on the jobs bill. Cantor said, "I don't think that's the right approach. What we should do is go for the things in the package that we both can agree on." Cantor cited tax breaks for small businesses and expediting reviews for infrastructure projects as examples of common ground.
Obama said the entire $447 billion would be paid for, and added that he would ask the congressional deficit-reduction "supercommittee" to add the proposal's cost to the more than $1 trillion in 10-year savings they have been charged with finding.
Infrastructure spending makes up 23% of the package's price tag. Some of the elements of that part of the proposal are new; others were proposed months earlier but not enacted.
The plan's $105 billion for infrastructure includes $50 billion for transportation, $25 billion to upgrade public-school buildings, $5 billion for improvements to community college facilities, $15 billion for repairs and improvements to abandoned or foreclosed housing and commercial buildings, and $10 billion to launch a “National Infrastructure Bank.”
The $50-billion infusion for transportation was part of Obama’s fiscal 2012 budget proposal, transmitted to Congress in February. But House appropriators rejected that funding boost in the the 2012 transportation spending bill that cleared subcommittee on Sept. 8.
In the Senate, the Appropriations Committee didn't make room for the $50 billion in its newly approved funding allocation for the 2012 transportation bill.
Nor has the funding been included in surface-transportation reauthorization proposals in the House or Senate.
The $50 billion, which the White House describes as “immediate investments…to jump-start critical infrastructure projects and create hundreds of thousands of jobs,”
includes $27 billion for highways, $9 billion for transit, $2 billion for intercity passenger rail and $2 billion for airports.
Also in the $50 billion is $10 billion for “innovative ways of financing and investing in infrastructure,” including $4 billion for high-speed rail and $5 billion for the existing, and extremely popular, TIFIA federal loan program and TIGER discretionary grants.
The plan also includes $10 billion to launch a “National Infrastructure Bank,” versions of which have been proposed in the Senate and House.
The proposed funding for school upgrades has a familiar ring. Early versions of what became the 2009 American Recovery and Reinvestment Act, had sizable amounts for school renovations--as stimulus bills moved out of committee early in 2009, the House had $20 billion for school projects and the Senate had $19.5 billion.
But in a major disappointment to design and construction firms that specalize in buildings, the money was dropped from the final measure when Sen. Susan Collins (R-Maine), a key player in the final negotiations, objected to a new federal school construction program.
The new package's $15 billion for housing rehab is part of what the White House calls “Project Rebuild.” It would provide funds in “proven strategies that leverage private capital and expertise to rehabilitate hundreds of thousands of properties,” the White House says.
It also seeks to use partnerships between local governments, non-profit organizations and private-sector entities as well as “land banks” to purchase and redevelop distressed buildings.
The Obama plan's tax provisions include a proposal to halve companies payroll taxes, to 3.1%, for the first $5 million in payroll.
In addition, the proposal would eliminate payroll taxes for companies that hire new employees or boost current workers' wages--up to a cap of $50 million in total wage hikes.
Moreover, the package would extend into 2012 companies' ability to "expense" capital equipment purchases.