Transport bill needed to boost economy, says Obama

US President Barack Obama urged Congress on Saturday to pass a clean extension of the transportation bill to finance road construction and other key infrastructure projects across the US. 

Reuters/Larry Downing

“We need to pass this transportation bill and put people to work rebuilding America,” he said in his weekly radio and internet address.

Obama has said failure to pass the bill, which has been held up by partisan disputes, would be disastrous for the economy. He estimated it would cost the jobs of nearly one million people and almost one billion dollars in highway funding after the first ten days alone.

His appeal follows the publication of disappointing new statistics on Friday which show the nation’s unemployment rate has not moved at 9.1 per cent since July.

Meanwhile, the US government says it will sue 17 top-US and foreign banks for billions of dollars in losses on mortgage-backed securities that plunged in value during the 2008 financial crisis.

The Federal Housing Finance Agency, FHFA, alleged that in some cases lenders committed fraud in selling nearly 190 billion dollars in securities to mortgage giants Fannie Mae and Freddie Mac which had to be bailed out by the US government.

The US banks include Bank of America, Goldman Sachs and JPMorgan. Deutsche Bank, HSBS, Credit Suisse and Societe Generale were among the foreign banks named.

The FHFA charged that the banks' peddling of mortgage-backed securities during the bubble years eventually led to steep losses at Fannie Mae and Freddie Mac, costs that were mostly borne by taxpayers.

The landmark move had been urged for years by consumer advocates, who argued that Wall Street banks have not been held responsible for actions that caused the financial crisis.

The crisis was sparked when a bubble in US housing prices popped and mortgage-backed securities lost much of their value, sending shockwaves through the global banking system.