Stimulus plan and infostructure
President Obama met with several governors on October 11th to discuss a new report on the potential impact of infrastructure spending in hopes of creating support for his $50 billion infrastructure investment proposal. The president has promised new jobs with this initiative, stressing that the proposal will help to reduce the skyrocketing unemployment in America.
The proposal also aims to refurbish 150,000 miles of roads, build or maintain 4,000 miles of rail, and renovate 150 miles of airport runways. A high-speed rail program and an upgrade to the country’s existing air traffic control systems are also included in Obama’s proposal. In addition, the report finds that 61% of the jobs created would be in the construction sector and 12% would be in the manufacturing sector, addressing two industries that have been hit hard by the recession.
Republicans are divided with the administration on the infrastructure plan; their view remains that Obama’s plan would be a mistake during a time of tight state and federal budgets and that overspending would make the situation worse. The report finds that infrastructure spending has fallen by 50% since 1960, and accounts for 2% of the country’s gross domestic product; in comparison, China spends about 9% of it’s GDP on infrastructure, and Europe about 5%. The current administration argues that America needs to spend more on infrastructure to be in comparison with the rest of the world and that according to a report from former Transportation Secretary Norman Mineta, $134 billion to $194 billion is needed each year just to maintain the country’s existing transportation system.