President Barack Obama proposed spending at least $50 billion to rehabilitate the nation’s transportation infrastructure to help spur an economy that’s lost jobs for three straight months.

At a Labor Day rally in Milwaukee two months before midterm congressional elections, Obama called for a six-year program to fix roads, railways and runways, and to modernize the air- traffic control system. The funds would be included in a transportation authorization bill that’s stalled in Congress.

Obama called for an “infrastructure bank” and requested money to rebuild 150,000 miles (241,400 kilometers) of roads, construct and maintain 4,000 miles of rail, and overhaul 150 miles of runways. Elections on Nov. 2 deciding every U.S. House seat and about a third of the Senate are focused on unemployment near 10 percent and a budget deficit swelled by the government’s financial-system bailout.

“All of this will not only create jobs now, but will make our economy run better over the long haul,” Obama said. “It’s a plan that history tells us can and should attract bipartisan support.”

Senate Republican Leader Mitch McConnell, of Kentucky, said today in a statement that the “latest plan for another stimulus should be met with justifiable skepticism,” and “Americans are rightly skeptical about Washington Democrats asking for more money.”

The Obama administration will work with Congress to ensure the plan is fully funded, and a “significant portion of the new investments would be front-loaded in the first year,” the White House said in a statement.

Deficits

In his speech, Obama said his proposed public-works spending “will not add to the deficit over time.”

The program will focus on long-term modernization of transportation systems and create jobs starting in 2011, an administration official said today. The White House will propose to pay for the new spending by eliminating tax deductions for oil and gas companies, the official said.

Republican economists questioned whether rushing out more money to rebuild roads and other such spending was the best way to help the economy rebound.

“Infrastructure programs are always popular for stimulus talk but disappointing in practice,” Douglas Holtz-Eakin, president of the American Action Forum and a former adviser to the 2008 presidential campaign of Senator John McCain, a Republican from Arizona.

The House Appropriations Committee’s transportation panel in July rejected Obama’s request for $4 billion to create an infrastructure bank to finance new projects.

Spending Concern

Holtz-Eakin questioned whether Congress will agree to more spending, given signs of growing voter opposition to a deficit that the Congressional Budget Office estimates will reach $1.3 trillion in the fiscal year ending Sept. 30, near last year’s record shortfall of $1.4 trillion.

“The ratio of politics to substance in this effort is infinite,” Holtz-Eakin said.

Obama’s remarks to members of the AFL-CIO, the largest U.S. labor federation, kicked off a week in which he plans to promote his economic agenda in two Midwest states where incumbent Democrats are in close contests.

Faced with the prospect of Democrats losing control of Congress in the November elections and a series of mixed economic reports, Obama is offering proposals that combine tax breaks and additional spending to help an economy that’s struggling to recover from the worst recession in more than six decades.

Job Losses

Last week’s jobs report showed that private payrolls climbed 67,000 in August, more than forecast, easing concerns that the world’s largest economy is sliding back into a recession. Even so, overall employment fell by 54,000, and the unemployment rate rose to 9.6 percent from 9.5 percent as more people entered the labor force.

Construction jobs in the U.S. have declined by 940,000 since Obama took office in January 2009, even after a 19,000 gain in August.

Peoria, Illinois-based Caterpillar Inc., the world’s largest construction-equipment maker, said last month it may add as many as 9,000 workers worldwide this year as sales climb in developing markets. Caterpillar shares have risen more than 50 percent in the past year.

Later this week, the president will also urge Congress to permanently extend and expand a research-and-development tax credit for businesses, according to two administration officials. The plan, which he’ll announce in Cleveland on Sept. 8, would cost about $100 billion over a decade.

Research Incentive

Every president since Bill Clinton has backed a permanent extension of the research tax credit, which Congress only temporarily extends because of its high cost.

Obama’s proposals, many of which he has introduced before, will run up against a tight congressional calendar and election- year politics. The Senate is scheduled to return to Washington Sept. 13, and the House reconvenes the next day. Lawmakers will be at work for about three weeks before leaving again to campaign.

The economic stimulus package approved last year allocated $38.6 billion for the Transportation Department, and so far $18.5 billion has been paid out, according to a government website that tracks the spending.

The Milwaukee trip is Obama’s third visit to Wisconsin since June. The state’s unemployment rate, at 7.8 percent, is lower than the national average, even with pockets of greater economic stress, such as in the southern part of the state, where a General Motors Co. assembly plant closed in 2008.

Feingold’s Race

While Wisconsin has only elected Democratic U.S. senators since 1992, incumbent Senator Russell Feingold is fighting to hold onto his seat.

“What we’re seeing in Wisconsin is what we’re seeing everywhere nationally,” said Stuart Rothenberg, publisher of the nonpartisan Rothenberg Political Report in Washington. “Democrats are on the defensive in a state that we would normally think of as leaning narrowly to the Democrats.”

Feingold, a three-term senator whose opponents have seized on his support for Obama’s stimulus legislation, didn’t appear with Obama today. In a statement, his campaign cited a scheduling conflict and noted Feingold was with Obama Aug. 16 in Milwaukee and “looks forward to appearing with the president when he comes to Wisconsin again.”