President Obama's Sept. 6 proposal to spend more on transportation infrastructure  was short on details, but administration officials are starting to flesh it out with some specifics.

His proposal drew keen interest from construction industry and other transportation organizations, which have been pushing for a new multi-year surface transportation bill for many months. The last such measure expired nearly a year ago and highway and transit programs have operated since then under stopgap measures, the most recent of which lapses on Dec. 31.


More information about a key part of Obama's plan--a proposed new federal infrastructure bank--came to light at a Senate banking committee hearing on Sept. 21.

Roy Kienitz, under secretary of transportation for policy, told the panel that the infrastructure bank "is a way to direct spending...at the strategic priorities we have in a much more concrete and specific way, and...to do it according to a set of principles of merit-based decisions on what projects to pick and what modes....rather than to set aside slices of money for each individual category...."

The infrastructure bank and other parts of the Obama plan almost certainly won't be enacted this year. But they are likely to be in the mix when the new Congress takes up a transportation bill in 2011.

Kienitz conceded that many details about the bank concept have yet to be worked out. After testifying, he told reporters that the administration hopes to release specifics  early next year, along with Obama's fiscal 2012 budget proposal. But Kienitz added. "Plans could change."

At the hearing, Senate committee members and witnesses expressed support for the idea of a bank, but they had questions about how it would work.

The most skeptical was the panel's top Republican member, Richard Shelby of Alabama. His main worry was that a federal infrastructure bank would be another government-sponsored enterprise (GSE), like Fannie Mae and Freddie Mac, the mortgage finance companies whose severe problems in 2008 led the federal government to put them into conservatorship.

"I fear the GSE model," Shelby said.

The infrastructure bank would be structured differently from Fannie Mae and Freddie Mac, said Alan B. Krueger, assistant treasury secretary for economic policy. For one thing, he said, the bank would not be set up as a profit-seeking entity. For another, it would be part of the federal budget.

Another topic was whether the bank would fund projects outside of transportation--as proposed it would focus on highways, rail and other transportation modes.  Sen. Jack Reed (D-R.I.) asked about the electricity grid.

Pennsylvania Gov. Edward Rendell (D), who also testified at the hearing, said that the infrastructure bank must go beyond transportation.

Kienitz said that the administration's thinking is that the bank would be part of the next transportation bill and concentrate on projects in that arena. But he added,  "It could certainly go more broadly than that."

Kienitz also shed light on other elements of Obama's proposal.  He said that the outline is  "a signal"  that the administration believes that "a six-year reauthorization of surface transportation programs is important and we should get it done as quickly as possible."

Although Kienitz didn't say how much the administration is proposing to spend in that six-year bill, he said it supports "robust level of funding, significantly higher than the current baseline that's in the budgets going forward."

It  also would include as much as $50 billion "front-loaded" to the initial year of the legislation.  "Now is when the economy needs help," he said.

Kienitz also said that though the President included improvements to airports in his plan, the administration isn't proposing to merge a Federal Aviation Administration authorization bill with a surface-transportation measure.