Obama to announce infra bank as part of $50bn stimulus

US President Barack Obama will announce a transport infrastructure programme calling for at least $50bn of spending upfront. He will also call for the creation of an infrastructure bank that 'would leverage private and state and local capital to invest' in projects critical to the economy.

US President Barack Obama is expected to throw his weight behind the creation of a permanent infrastructure bank at a Labor Day event in Milwaukee today.

Barack Obama

The announcement – which will form part of a broader infrastructure programme to upgrade US roads, railways and runways – will call for the creation of a “bank [that] would leverage private and state and local capital to invest in projects that are most critical to our economic progress,” the White House said in a statement.

To do this, the bank would represent an “important departure from the federal government’s traditional way of spending on infrastructure through earmarks and formula-based grants that are allocated more by geography and politics than demonstrated value. Instead, the bank will base its investment decisions on clear analytical measures of performance, competing projects against each other to determine which will produce the greatest return for taxpayers,” the statement read.

Earlier in February, transport secretary Ray LaHood had pushed for the creation of a national infrastructure bank by proposing a $4 billion National Infrastructure Innovation and Finance Fund, which would invest in big-ticket projects of regional or national significance using a mix of public and private capital.

“The idea is that we would fund big, significant projects where you can really make a difference,” LaHood had said.

President Obama will also outline today a six-year plan to rebuild 150,000 miles of roads, build and maintain 4,000 miles of rail and rehabilitate 150 miles of runways. He will also stress the significance of high-speed rail “to ensure a sustained and effective commitment to a national high-speed rail system over the next generation,” the White House said.

The programme will call for an upfront expenditure of $50 billion, which would represent a significant share of the total cost, in a bid to jumpstart job creation and counter a 9.6 percent unemployment rate, the White House added.