Obama proposes $50B stimulus plan

U.S. President Barack Obama is asking Congress to approve at least $50 billion US in long-term spending on the country's roads, railways and runways in a pre-election effort to show he's trying to stimulate the sputtering economy.

The infrastructure spending is part of a package of targeted proposals the White House announced on Monday. With November's elections for control of Congress approaching, Obama planned to discuss the proposal later Monday at an event in Milwaukee marking the Labour Day holiday.

The proposals would require congressional approval, which is highly uncertain with many legislators and voters worried about adding to federal deficits that are already sky-high. With Republicans saying spending is out of control and polls showing many people want to end Democrats' control of Congress, even many Democratic lawmakers are reluctant to approve new spending so close to the elections.

Even if legislators could pass a bill in the short window between their return to Congress from their summer break in mid-September and the elections, the early projects would not create jobs immediately. Senior administration officials, who would not be quoted by name before Obama's announcement, said the initial projects would lead to new jobs over the course of 2011.

Republicans made it clear that Obama can expect no help from them.

Senate Republican Leader Mitch McConnell said the plan "should be met with justifiable skepticism" because it would raise taxes while Americans are "still looking for the 'shovel-ready' jobs they were promised more than a year ago" in the original stimulus program.

The House Republican leader, John Boehner, added "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."

The officials said the initial $50 billion would be the beginning of a six-year program of transportation improvements, but they did not give an overall figure. The proposal has a longer-range focus than last year's economic stimulus bill, which was more targeted on immediate job creation.

Unemployment at 9.6%

The goals of the infrastructure plan include: rebuilding 150,000 miles of roads; constructing and maintaining 4,000 miles of railways, enough to go coast-to-coast; shorter, high speed rail projects; and rehabilitating or reconstructing 150 miles of airport runways while also installing a next generation air navigation system designed to reduce travel times and delays.

Obama will also call for the creation of a permanent infrastructure bank that would focus on funding national and regional infrastructure projects.

Administration officials wouldn't say what the total cost of the infrastructure projects would be but did say the initial $50 billion represents a significant percentage. Officials said the White House would consider closing a number of special tax breaks for oil and gas companies to pay for the proposal.

Obama made infrastructure improvements a central part of the $814 billion stimulus Congress passed last year, but with that spending winding down, the economy's growth has slowed. Officials said this infrastructure package differs from the stimulus because it's aimed at long-term growth while still focusing on creating jobs in the short-term.

In an interview on CBS television, Labor Secretary Hilda Solis said the plan Obama was to unveil Monday would "put construction workers, welders, electricians back to work ... folks that have been unemployed for a long time."

With the unemployment rate ticking up to 9.6 per cent, and polls showing the November elections could be dismal for Democrats, the president has promised to unveil a series of new measures on the economy.