MILWAUKEE (Reuters) – President Barack Obama, scrambling to jump-start job creation in a sluggish US economy, proposed a six-year plan yesterday to rebuild aging roads, railways and runways with an initial $50 billion investment.
“We are going to rebuild 150,000 miles (240,000 km) of our roads — that’s enough to circle the world six times. … We’re going to lay and maintain 4,000 miles (6,400 km) of our railways — enough to stretch coast-to-coast,” Obama told a labour rally in Milwaukee where several thousand supporters cheered his every line.
The infrastructure plan, one of several initiatives Obama is due to unveil this week, was immediately rejected by Republicans, who many analysts predict could win control of the House of Representatives in November 2 congressional elections.
With fellow Democrats facing punishment from recession-weary voters in November, Obama is under pressure to do more to create jobs and bring down the stubbornly high 9.6 percent unemployment rate, even as economists agree he has few good options left.
Economists are skeptical any measures Obama takes now will make a significant difference in the $13.2 trillion US economy and point out that investments in infrastructure typically do not stimulate the economy quickly.
A centrepiece of his new plan is a proposal for the US Congress to increase and permanently extend a tax credit for business research and development.
The tax credit proposal, which was widely expected by investors, would cost $100 billion over 10 years. He is to lay out the plan tomorrow in Cleveland.
While Obama declared some jobs would be created immediately by the infrastructure overhaul, a senior administration official told reporters the plan would not create jobs until 2011.
“This is not a stimulus, immediate-jobs plan,” the official said.
The White House stressed the plan would not add to the record US deficit, a key issue for voters.
“One thing (Obama) is willing to put on the table is closing some of the tax loopholes for big oil and gas companies that currently get subsidies from taxpayers that they certainly don’t need. He thinks that is a perfectly good ‘pay-for’ to get this up and running,” the administration official said.
The American Petroleum Institute, which represents major US oil and gas companies, said additional taxes would drive energy investment, including jobs, overseas. “Now is the time to create American jobs, not eliminate them,” API spokeswoman Cathy Landry said.
Obama told the Milwaukee rally he would work with Congress to make sure the plan was fully paid for.
He could face an uphill battle in getting Congress to approve the plan, especially if Republicans make big gains in November.
Senate Republican leader Mitch McConnell called it a “last-minute cobbled-together stimulus bill” and the Republican leader of the House, John Boehner, was equally dismissive.
“We don’t need more government ‘stimulus’ spending — we need to end Washington Democrats’ out-of-control spending spree, stop their tax hikes, and create jobs by eliminating the job-killing uncertainty that is hampering our small businesses,” Boehner said.
Under the infrastructure plan, Obama is proposing to:
– Rebuild 150,000 miles (240,00 km) of roads;
– Construct and maintain 4,000 miles (6,400 km) of rail;
– Rehabilitate or reconstruct 150 miles (240 km) of runway and modernize the air traffic control system and;
– Set up an infrastructure bank to leverage private, state and local capital to invest in projects.
Transportation construction spending would likely help companies like equipment maker Caterpillar Inc, privately held engineering firm Parsons Corp, and conglomerate General Electric Co.
The administration official said a “substantial number of jobs” would be created by the infrastructure projects. Transportation experts say 35,000 jobs are created for every $1 billion in transportation construction investment.
The administration said the proposal unveiled yesterday would be part of a long-term transportation reauthorization that traditionally mander in Afghanistan, said in a statement to US media organizations.
“It is precisely the kind of action the Taliban uses and could cause significant problems. Not just here, but everywhere in the world, we are engaged with the Islamic community,” he added.
Lieutenant-General William Caldwell, commander of the NATO Training Mission in Afghanistan, told CNN the news of the planned Koran burning by the little-known Florida church was already provoking popular anger in Afghanistan.
“It’s their Holy Book, so when somebody says that they’re going to destroy that and cause a desecration to something that’s very sacred to them, it’s already stirred up a lot of discussion and concern amongst the people,” he said.
“We very much feel that this could jeopardize the safety of our men and women that are serving over here,” Caldwell added.
In Kabul, the demonstrators, mostly students from religious schools who gathered outside Kabul’s Milad ul-Nabi mosque, said they would continue their protests.
“We call on America to stop desecrating our Holy Koran,” student Wahidullah Nori told Reuters.
The dispute came at a time of already heated debate in the United States over a proposal to build a cultural center and mosque two blocks away from the site in New York of the September 11 attacks on the World Trade Center.
Opponents of the building plan say it is insensitive to families of the victims of the September 11 attacks by al Qaeda.
US-backed Afghan forces toppled the Taliban government in Afghanistan soon after those attacks for harboring al Qaeda leaders, including Osama bin Laden.
Demonstrations and riots triggered by reported desecration of the Koran are not infrequent in Afghanistan and other Muslim countries. The most violent protests came after cartoons depicting the Prophet Mohammad in a Danish newspaper in 2006.
In comments broadcast by CNN, Terry Jones, pastor of the Dove World Outreach Center, said it would be “tragic” if anybody’s life was lost as a result of the planned Koran burning.
