Bloomberg News

Senate Democrats Propose $60 Billion Infrastructure Measure

October 21, 2011

(Updates with comment from McConnell spokesman in fifth paragraph.)

Oct. 21 (Bloomberg) -- Senate Majority Leader Harry Reid said he will advance the next piece of President Barack Obama’s rejected $447 billion jobs proposal, this time a $60 billion measure funding roads, bridges and other infrastructure.

Reid said he will seek a vote on the package, which would be financed by a 0.7 percent surtax on millionaires, during the week of Oct. 31. Yesterday, Democrats failed in their first attempt to salvage parts of the overall jobs proposal.

During a conference call held today with Transportation Secretary Ray LaHood, Reid said Republicans will pay a political price for continuing to vote against such measures.

“They need to get in touch with their constituents, and we’re going to keep moving forward on this,” said Reid, a Nevada Democrat.

A spokesman for Senate Minority Leader Mitch McConnell said the Kentucky Republican questions the effectiveness and fiscal impact of further construction spending on job growth.

“Two years after spending tens of billions of dollars on ‘shovel ready’ projects in his first stimulus bill, President Obama famously admitted that those projects weren’t as shovel- ready as he thought they were,” said John Ashbrook, a McConnell spokesman. “It would be the height of irresponsibility at a time of trillion-dollar deficits to make the same mistake twice.”

Infrastructure Bank

The new proposal includes $10 billion to create a national “infrastructure bank” to leverage private and public capital for various projects. Senator Amy Klobuchar, a Minnesota Democrat, said the other $50 billion would fund infrastructure projects including $4 billion for rail, $9 billion for transit programs, and $27 billion for road, bridge, freight rail and port projects.

In yesterday’s vote, the Senate blocked, on a 50-50 tally, a proposal to spend $35 billion to help prevent layoffs of public-sector employees. The measure needed 60 votes to advance to the Senate floor.

The Senate also blocked, 57-43, a Republican proposal to repeal a requirement that the government begin withholding 3 percent of payments to federal contractors starting in 2013.

Public Support

Democrats continue to push the jobs measures after public opinion surveys show support for a millionaires’ surtax to help pay for government efforts to boost job creation. An Oct. 13-17 AP-GfK poll found that 62 percent of 1,000 U.S. adults surveyed supported such a tax, while 26 percent opposed it.

Still, the same poll found that just 36 percent thought higher spending for roads, schools and other infrastructure could increase jobs “a great deal” or “quite a bit.” The poll had a margin of error of plus or minus 4 percentage points.

Democrats began trying to pass Obama’s jobs package in pieces after the Senate blocked consideration of the full plan last week. That plan would expand a payroll tax break due to expire at the end of this year, increase spending on public works projects and extend jobless benefits.

All Senate Republicans opposed the larger package as well as the piecemeal approach. Republicans have objected to tax increases to offset the new spending, and they also question the value of more government spending to boost the economy. They say the $825 billion in economic stimulus approved in 2009 was ineffective.

LaHood said today that $48 billion in transportation spending in the 2009 stimulus measure supported 55,000 new jobs. A further boost in transportation will help yield more jobs, with the effect extending into 2012, he said.

--Editors: Laurie Asseo, Justin Blum

To contact the reporters on this story: Laura Litvan in Washington at llitvan@bloomberg.net; Brian Faler in Washington at bfaler@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net


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