WASHINGTON (Bloomberg) — US airline insurance aid and the Amtrak passenger railroad are among the targets in President George W. Bush's threat to veto a transportation bill.The proposal pending in the House would let airlines pay below-market rates for government insurance against terrorism, which "crowds out private-sector mechanisms for diversifying risk," the White House budget office said yesterday.

The office cited the insurance provision as one of the reasons why Bush would veto a $50.7 billion bill for transportation and housing if approved in its current form. The measure's "irresponsible and excessive" spending exceeds Bush's request by $3.4bn, the budget office said.

The insurance aid, which saves airlines about $350 million a year in premiums, was begun 11 days after the September 11, 2001, terrorist attacks. The new bill would extend it another year. It was extended last year to August 31, and Transportation Secretary Mary Peters can push that date to December 31.

Bush, who vetoed one bill in his first six years in office, is threatening to reject almost every spending measure sent to him by the Democrat-controlled Congress. He says lawmakers are trying to spend $22bn more on programmes than he requested.

In the transportation-housing bill, Bush objects to adding $500m for highways, $1.4bn for Amtrak and $3.5bn for housing and urban development programmes. The House was scheduled to begin debate yesterday in Washington on the legislation for the fiscal year that begins October 1.