The Obama administration gave a strong endorsement for Charlotte's $1 billion light-rail extension Tuesday, by budgeting $70 million for construction and engineering for the upcoming year and predicting that it will give the project its full approval in the fall.

"We don't expect anything to derail it," said Federal Transit Administrator Peter Rogoff Tuesday. "We are very supportive of this project. We don't see any show-stoppers."

Rogoff said he expects the final paperwork - known as a Full Funding Grant Agreement - to be signed later this year. That would commit the federal government to roughly $530 million in construction money, about half of the line's $1.07 billion cost.

The extension would link uptown with UNC Charlotte, which has long been a dream of campus and city officials.

The FTA and CATS were confident Tuesday, though there will probably be a difficult fight ahead between the White House and Congressional Republicans over the scope of spending cuts for the fiscal 2013 budget.

But it appears that the Lynx Blue Line extension is a favorite of the FTA, perhaps in part due to North Carolina's status as a swing state in the November election.

During a conference call with reporters Tuesday, the Blue Line extension was the first project Rogoff mentioned, and he praised its possibilities for economic development.

"It was a very good day for us," said CATS chief executive Carolyn Flowers.

Flowers said she was pleased the FTA considers the line essentially ready for formal approval.

Rogoff said Tuesday that the FTA's proposed budget for the upcoming fiscal year has $70 million for the extension, which could be seen as a down payment on the larger grant.

"It's a very positive indicator," Flowers said. "We always have to look at funding. But we don't see anything that would derail the project."

The original plan for the Blue Line Extension was to end the line at a large park-and-ride lot at Interstate 485 in northeast Charlotte.

But a lack of money forced CATS to scale back the project by 1.2 miles. The new ending will be on the UNC Charlotte campus.

Along the way, the line will have new 11 stations, including stops in NoDa, Sugar Creek and along North Tryon Street.

Flowers said construction could start in 2013. The line could open in 2017.

CATS and the N.C. Department of Transportation are expected to each pay 25 percent of construction costs.

Once the Lynx extension opens, one of CATS' main tasks will be finding enough money to keep its regular bus service, along with its new 20-mile train.

A consultant has told the transit system that it probably won't have much money to expand bus service, and CATS may be in a period of waiting for the half-cent sales tax to grow before it embarks on any significant projects.

That may make it extremely difficult to build rapid transit on Independence Boulevard - either a busway or a train - as well as a planned streetcar to Charlotte Douglas International Airport.

The city of Charlotte, however, is moving forward on a streetcar through uptown, and last year received a $25 million federal grant to help pay for the first 1.5-mile segment. CATS is trying to build a commuter rail line to Lake Norman, but that project will probably need additional revenue, possibly from special taxing districts near train stations.

The original light-rail line, which opened in 2007, is carrying between 15,000 and 15,500 passenger trips a day.

CATS projects that line to carry 18,300 passengers by 2025. The Lynx extension is projected to open with 19,000 passengers. By 2030, ridership is expected to grow to 25,000 daily trips.

The $70 million grant, along with the approval of the Full Funding Grant Agreement, is contingent on the approval of a 2013 budget. Congressional Republicans are likely to push President Barack Obama for more spending cuts.

North Carolina leaders are concerned that a controversial House proposal led by Republicans could jeopardize progress on the Charlotte light rail.

But some members saw the administration's announcement as a positive sign.

"I am pleased the Administration is recommending the Charlotte light rail project for funding," said U.S. Rep. David Price, a Chapel Hill Democrat. "The President is right to make infrastructure investments a priority in his budget because they create jobs immediately and strengthen our economy in the long run."