» Administration, some members of Congress hope to introduce and pass a bill during the lame duck session. Without agreement on how to fund it, though, the process seems futile.
When Barack Obama campaigned for president, one of his primary campaign planks was that he would not raise taxes on families making less than $250,000 a year. That political move, however nice sounding for the country’s middle class, has paralyzed the development of a new transportation bill in the United States. There is a significant need for improvements to the American infrastructure system but no new revenue to pay for them; because of its initial campaign pledge, the Administration has been unwilling to move ahead on such straight-forward ideas like an increase in the gas tax or the implementation of a vehicle miles traveled fee.
The result? The last transportation authorization legislation, a five-year bill that laid out the federal government’s plans and priorities for spending on highways and transit, expired more than a year ago. More funds have been shifted to the states, but only through the expenditure of general revenues; the fuel tax, which is supposed to pay for transportation infrastructure, is not producing nearly enough funds to cover the costs of the national transportation program. Thus the importance of these appropriations of general revenues, which are sourced from the federal income tax.
But now those temporary extensions are coming to an end; on December 31st, Washington will have no more money to pay for any transportation projects. Thus President Obama’s announcement yesterday of a push to pass a $50 billion down-payment on the next transportation bill during the lame-duck period after the November elections but before the new Congress is installed in January. The Administration also released a report completed by the Treasury Department demonstrating how many jobs such infrastructure investments might produce.
These funds, playing off the President’s plan announced last month to spend $50 billion on an infrastructure bank, would be the first part of a new transportation bill that would dedicate up to $75 billion a year to all forms of transportation. Mr. Obama has said in the past that he wants to renovated 150,000 miles of existing roads, construct 4,000 miles of railways, and rehabilitate 150 miles of runways. Los Angeles Mayor Antonio Villaraigosa, present at the President’s speech yesterday, has his own ideas about how the money could be used: He wants much of the funds to be loaned to his city for the construction of his 30/10 rail expansion program.
The problem is that despite all the hoopla over the President’s new transportation agenda, he has yet to promote a sustainable funding plan for the investments that he has claimed will “pay for themselves” somehow without requiring the increase of any taxes. It’s a fantasy.
There is no secret plan being developed by the Administration: It is clear that the first $50 billion, if approved, would come from general revenues and once again be used simply to shore up the transportation program to ensure that the states are able to continue their work on essential roads and transit projects. Mr. Obama’s appeal to the public about the importance of transportation is undoubtedly actually a plea to members of the House and Senate, who he wants to take the fall and propose tax increases to pay for the project.
Yet Republicans now appear to have a significant chance to take back the House of Representatives; their resistance to tax increases is even more solid than that of the Administration. Is the current Democratic majority expected to solve the nation’s transportation funding problems during the lame-duck session? Is it possible for a six-year transportation bill to be developed over the next two months and then be passed? Is there any way a consensus can be developed between members of Congress and the White House on how to fund any increase in expenditures on transportation? The answers to these questions better be “yes:” A GOP-led House is not likely to be particularly cooperative when it comes to finding the funds for transportation.
Congressman James Oberstar (D-MN), current head of the House Transportation and Infrastructure Committee, must be fuming; he has been working for two years on the development of a new transportation bill but the Administration has been thoroughly uncooperative because of its interest in other legislation such as health care and financial reform. Mr. Oberstar could lose his chairmanship in this fall’s elections.
But he is advancing the idea of a 15¢ increase in the federal fuel tax to pay for transportation nevertheless, an almost doubling of the existing 18.4¢ revenue source. Though Transportation Secretary Ray LaHood has repeatedly said that the Administration would not support any increase in that funding stream, the lack of agreement about how to pay for transportation today means this approach could be the only reasonable one. There are, of course, long-term limitations to the fuel tax because of the increase in fuel efficiencies of automobiles and the growing presence of cars not powered by gas.
And then there is another possibility: Simply removing Washington altogether from its involvement in the funding of transportation. That is what Texas Governor Rick Perry (R) is suggesting. Mr. Perry says he would rather have states simply keep the money collected on fuel taxes in their jurisdiction, rather than have the federal government get its hands wet in the middle as the distributor of dollars.
That, however, would be devastating to advocates of alternative transportation. State governments have been notoriously bad at spending their own funds on anything other than roads; how can they be trusted with the entire pot of money? Moreover, the involvement of the federal government encourages the development of national plans for interstate highways and high-speed rail. If states were to take over transportation funding in its entirety, those proposals would likely be relegated to the trash heap.
The Obama Administration, despite its announcement yesterday, has yet to engage a serious conversation about these issues. Will it do so, or is it hoping that the problems in transportation financing will simply go away? They won’t.