Obama plans $50bn spend

City A.M. Reporter
US President Barack Obama yesterday announced a six-year plan to revamp ageing roads, railways and runways with a $50bn (£32.4bn) up-front investment to jump-start job creation.

The plan is one of several economic initiatives that Obama is due to unveil this week aimed at generating some desperately needed US job growth and limiting predicted Democratic losses in 2 November congressional elections.

Administration officials say Obama will ask the US Congress tomorrow to increase and permanently extend a tax credit for business research as a way of boosting job growth. The proposal would cost $100bn over 10 years.

Economists are sceptical 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.

An administration official said the infrastructure plan will not immediately stimulate the economy. The White House also stressed that the plan would not add to the government deficit, but Obama is likely to face scepticism from opposition Republicans.