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Obama to press for action on transportation funds in Virginia, Delaware events

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WASHINGTON - President Barack Obama is pressing Congress to make a long-term commitment to keep highway and transit aid flowing to states, but lawmakers appear headed for a short-term patch to sustain projects through next May.

The White House has proposed a $302 billion, four-year transportation spending plan that is paid in part by closing corporate tax loopholes. In a report released Monday, it says greater spending on infrastructure will help the construction industry, which has an elevated unemployment level of 9.9 per cent.

The White House Council of Economic Advisers also says states and local governments are well positioned now to undertake capital projects because construction is cheaper and because the cost of borrowing through municipal bonds is at a historic low.

Obama will discuss the issue during remarks Tuesday at a facility in Virginia that tests new technologies for highway transportation. He'll also tout the need to invest in the nation's infrastructure Thursday during a trip to Delaware, where he'll announce an initiative to increase private sector investment.

House and Senate committees took steps last week toward shoring up the federal Highway Trust Fund, but in amounts far smaller than what the White House has proposed. The House and Senate bills are paid for in different ways, but both provide about $11 billion to keep projects going through May.

The administration has warned that by early August the fund will no longer have enough money to cover promised aid to states, and the government will begin to stretch out payments. States have been told to expect a 28 per cent reduction in aid on average.

The White House argues that the United States has fallen behind other major economies in its spending for transportation needs.

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