Obama says Congress will kill jobs if highway funds aren't extended

President Obama fired a shot across the bow of congressional Republicans Wednesday, urging action on transportation bills in which he says 1 million US jobs are at stake.

The president said a significant delay in the bills could mean a million people "will be out of a job just because of politics in Washington.... That's just not acceptable. That's inexcusable."

For now, the "inexcusable" label amounts to a preemptive attack, intended to goad Congress into action when lawmakers return from vacation next week. But there's not much time left for Congress to act before both the gasoline tax and funding for road projects expire on Sept. 30.

The difference between the two sides: Mr. Obama and Senate Democrats want to spend far more on transportation than the Republican-controlled House.

Both sides say they want to avoid a construction shutdown, but recent months have seen fiscal fights go down to the wire – including a partial shutdown of the Federal Aviation Administration (FAA).

Behind the debates are fundamentally opposed views on the size of government and its role in job creation. With his transportation comments, Obama is stretching to reset a fiscal atmosphere that has moved sharply toward spending restraint.

From highway funds to hurricane relief, spending that traditionally might have sparked little contention now holds the potential for protracted stand-offs.

Obama's call to fund construction jobs comes as more than 9 percent of the labor force is out of work, and as the persistence of unemployment has weighed on his approval ratings. It also sets the stage for Obama to pitch a larger array of job-creation plans to the nation in seven days, even as rival Republican candidates are unveiling their own blueprints on jobs.

The president, while he has embraced the goal of spending restraint over the long term, says that cutting federal spending too sharply in the short run could harm the economy.

His job proposals next week are expected to include a blend of tax cuts and spending – including on transportation – designed to encourage job growth.

"We have to have a serious conversation ... about making real, lasting investments in infrastructure," Obama said Wednesday. "At a time when interest rates are low and workers are unemployed, the best time to make those investments is right now."

Given the new fiscal environment, the real debate is not so much about stimulus as about the degree to which government spending will be restrained after record years for federal deficits.

A so-called fiscal super-committee is poised to work this fall on new deficit-reduction measures under a budget act recently signed by Obama.

The surface-transport bills in the House and Senate differ markedly. The Senate plan would provide $109 billion in funding over the next two years The House plan calls for $230 billion over six years, or a roughly a one-third cut from recent spending levels.

The Senate plan, backed by Barbara Boxer (D) of California, represents less funding than Obama and many infrastructure boosters hope for. But it would cost more than the revenues from a tax of 18.4 cents per gallon of gasoline, which flows into the Highway Trust Fund.

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