President Obama’s proposal to direct $50 billion in new federal funding to transportation projects includes $5 billion to be shared by the high-demand TIGER grant program and the low-cost TIFIA loans at the Department of Transportation.
Those are among details the White House spelled out in a fact sheet about the president’s $447 billion jobs plan.
While much of the package comprises tax cuts and extending payments of unemployment benefits, Obama also wants Congress to approve $10 billion to capitalize a long-term National Infrastructure Bank that would lend to important construction projects. That would be separate from the $50 billion he would quickly put into road, rail, transit and aviation needs.
The DOT is currently taking applications for its third round of discretionary TIGER grants, which began with the 2009 stimulus law. Recipients have included a wide of freight rail, port construction, intermodal terminal and marine highway projects as well as passenger projects. This year, the DOT will distribute $527 million in such grants, after $600 million last year and $1.5 billion from the 2009 stimulus.
TIFIA loans, named for the Transportation Infrastructure Finance and Innovation Act, are handled through the Federal Highway Administration. They run for 35 years with current borrowing rates of 3.4 percent, but need federal appropriations to cover a risk premium charged on each loan against the risk of borrower defaults. A recent example was a $418 million loan to a tolled highway project in Dallas County, Texas.
Beyond those two accounts, out of the $50 billion in new spending for transportation the White House would put $27 billion in road and bridge projects. Another $9 billion would go to transit systems, along with $2 billion for inter-city passenger rail service improvements and $4 billion for high-speed rail development.
Airport improvement grants would total $2 billion, while $1 billion more would go into air traffic technology modernization.