Obama wants to put people to work by fixing the nation's crumbling roads and bridges

By Roberta Rampton

WASHINGTON (Reuters) - President Barack Obama will fly to St. Paul, Minnesota, on Wednesday to propose a four-year, $302 billion plan to create jobs by fixing the nation's crumbling roads, bridges, rail and transportation infrastructure.

Congress faces a September 30 deadline to renew federal funding for transportation programs, a deadline that has made state governors concerned about planning projects that typically run through September and into the fall months.

Obama will propose ending some tax breaks to provide a one-time $150 billion infusion of cash into transportation funding, the White House said.

"This vision will show how we can invest in the things we need to grow and create jobs by closing unfair tax loopholes, lowering tax rates, and making the system more fair," the White House said in a statement previewing his speech, set for 3:05 p.m. EST (2005 GMT).

Obama will first tour an operations and maintenance center for Metro Transit, the system of buses, light rail and commuter trains serving the Minneapolis-St. Paul "Twin Cities" region.

Obama has long called for using savings from tax reform to replenish the Highway Trust Fund, which relies on an 18.4-cents-a-gallon tax on gasoline to pay for the federal share of spending on roads. But it seems unlikely that a major tax overhaul could pass Congress in an election year.

"While the president will show how to fully pay for his proposal in this way, he will also make clear that he is open to ideas and wants to work with Congress in a bipartisan way to get this done," the White House said.

The gas tax, which raises about $35 billion a year, has not been raised in two decades, and the trust fund has fallen short of needs. Transportation Secretary Anthony Foxx said the fund could run out of money as soon as August.

The U.S. Chamber of Commerce and the AFL-CIO labor federation have proposed increasing the fuel tax, but Republicans in Congress are averse to tax hikes.

In St. Paul, Obama also will launch a competition for $600 million in grants for transportation projects through a program that leverages funds from the private sector and state and local governments. The spending has already been approved by Congress.

It is the sixth round of grants for the program, called Transportation Investment Generating Economic Recovery (TIGER), which so far has given $3.5 billion to 270 projects.

The White House said this round of grants will give priority to "projects that make it easier for Americans to get to jobs, school, and other opportunities, promote neighborhood revitalization and business expansion, and reconnect neighborhoods that are unnaturally divided by physical barriers such as highways and railroads."

(Reporting by Roberta Rampton; Editing by Lisa Shumaker)