Obama transportation plan likely to have to wait
Wednesday, September 8, 2010
With the nation's bridges and highways crumbling under the weight of age, attempts to pass a new six-year transportation bill have faltered mostly because Congress can't figure out how to pay for it.
President Obama's proposal on Monday to create an "infrastructure bank" may provide the long-sought solution for those reticent to raise the federal gas tax in the midst of a recession.
Rolling out his plan on Labor Day in Milwaukee, Obama took Capitol Hill and transportation lobbyists by surprise, and the scramble on Tuesday was to unearth critical details left out of the president's speech.
What seemed virtually certain is that his proposal for initial spending of $50 billion on planes, trains and automobiles isn't going to gain much preelection headway in Congress, and most likely will wait until next year.
"The calendar is not our friend here, and the Republicans in the Senate aren't going to let him have a win before the election," said a staff member on a key transportation committee, who spoke on the condition of anonymity because he was not authorized to speak on the issue. "We really can't expect any progress this year."
The gas tax has been the primary source of revenue for the federal Highway Trust Fund. Since 1993, the federal government has collected 18.4 cents per gallon, but more fuel-efficient vehicles have contributed to a steep decline in the fund. Five years ago, the U.S. Chamber of Commerce said it was falling about $45 billion short of the estimated $222 billion a year needed to maintain the surface transportation system.
The concept of an infrastructure bank to provide loans and grants for transportation projects has been discussed for decades by federal policymakers. It would leverage private capital and, ideally, be created with sufficient insulation to protect it from pork-barrel spending by Congress.
In Milwaukee, the president outlined a proposal to invest in rebuilding 150,000 miles of roads, maintaining 4,000 miles of rail line and rehabilitating 150 miles of airport runway. The White House revealed some details of the plan in conference calls on Tuesday to transportation industry groups.
Federal transportation spending is spelled out in massive pieces of legislation that govern the flow of money for six-year periods, giving states the ability to structure their construction plans with confidence the cash will be there.
Traditionally, the annual federal outlay has increased in each of the six years as projects evolve from planning to the most expensive phase - actual construction. This time, Obama wants to begin the six-year cycle with a heavy infusion of money.
"He wants to front-load the six-year authorization with $50 billion," said John Horsley, executive director of the American Association of State Highway and Transportation Officials.
Those briefed by the White House came away with a sense that the administration preferred to provide the $50 billion to kick off a new six-year program, but might go along if Congress opted for a one-time expenditure akin to the stimulus package.
The American Road and Transportation Builders Association was quick to insist that the spending be included as part of a reauthorization bill.
"Passage of robust, multi-year transportation bills is essential to assure predictability and continuity in the domestic transportation design and construction industry," the group's president, Pete Ruane, said in a statement. "Accordingly, the $50 billion investment proposed by President Obama must be part of a long-term reauthorization bill and not a stand-alone measure."