The Asphalt Empire Strikes Back

UPDATE by Robert: Sen. Kit Bond, Republican from Missouri, is offering two anti-transit amendments - including one that would kill the $2 billion in high speed rail funding currently in the Senate version of the stimulus. Contact both Dianne Feinstein and Barbara Boxer to let them know those amendments must be defeated - and while you're at it, ask Boxer's office why the hell they're advancing the cause of carbon pollution and global warming denial by helping Inhofe.

Dianne Feinstein DC office: (202) 224-3841
Barbara Boxer DC office: (202) 224-3553

Obama's silence on all this is also rather deafening. He has allowed Republicans to narrowly define what is stimulus and what is not - he hasn't mounted a strong defense of including mass transit funding as stimulus, and hasn't spoken out against Republican demands to gut the stimulus package. A new president with extremely high approval ratings should not be letting his administration get tied down by these Lilliputians, yet here we are.

UPDATE 2 by Rafael: Right now, Republicans are playing hardball. There will be no broad bipartisan majority because House Democrats will not accept a completely watered down bill in conference. The idea of stripping down the bill to the elements the GOP already agrees with in order to pass something, anything, Real Soon Now is a bad one because it does not require Republicans to voting for less palatable policies down the road.

Democrats may be able to bribe at least one Republican Senator into breaking ranks this time or, they may succeed in calling the GOP's bluff by forcing them to read telephone books for a while while thousands are losing their jobs every day. I'd quite like to see the latter happen just to underline how anachronistic the whole concept of filibusters is in the 21st Century.

However, given the gravity of the situation, it might make more sense for President Obama, Sen. Reid, a small group of Rockefeller Republican Senators and Speaker Pelosi to hammer out a European-style formal coalition agreement for a two-year legislative agenda. It would be more diplomatic to show deference to Senate Minority Leader McConnell, but this isn't about playing nice. It's about cobbling together a narrow, filibuster-proof majority. This is also why I didn't include House Minority Leader Boehner in the above list - his job for the next two years is to articulate the GOP alternative to the Democratic agenda, not to govern.

The alternative to a stable coalition agreement is to fight over each and every amendment of each and every bill, wasting precious time while the economy is tanking. Consumer and business confidence will only recover once there is visible evidence of a coherent strategy going forward, one that absolutely should include HSR as a means to gradually wean the nation off its addiction to oil.

Original post begins here:

---

Streetsblog SF warns that Sen. Barbara Boxer (D-CA) is about to enter into an unholy alliance with Sen. James Inhofe (R-OK). They plan to introduce an amendment to add $50 billion for highway construction to the stimulus bill (h/t to Robert Cruickshank). This comes on the heels of the GOP blocking a $25 billion amendment sponsored by Sen. Dianne Feinstein (D-CA) for highways, water and mass transit, ostensibly because no compensating cuts in other spending were offered. The Senate did pass one amendment: "Most consumers who buy new cars, minivans or light trucks by the end of the year would get tax deductions for the sales or excise taxes and the interest on their loans. Sponsor Barbara Mikulski , D- Md. , estimated that a family would save about $1,500 on a $25,000 vehicle. The key vote on the $11 billion measure was 71-26".

It is understandable that lawmakers are worried about the deteriorating state of the economy and focusing on the short-term issue of preserving and/or creating jobs. The DOTs of many states have a lot of planning expertise in highway projects, so most of their "shovel-ready" projects relate to roads. It's quite likely that there are at least $80 billion worth of road and road bridge repair projects around the country. If the bill contains verbiage targeting the funds that specifically, the Boxer-Inhofe amendment may make sense. However, it is not in the long-term interest of the country to substantially expand highway capacity in the context of this stimulus bill.

Similarly, it may make sense to provide tax breaks that generate demand for new cars, lest one of the Big Three goes belly-up. If that were to happen, it would amount to more than just job losses. The domestic automakers opted out of social security and Medicare decades ago, when that seemed like a good idea. Instead, they committed to providing pensions and health care to their retirees themselves. With Chapter 11 unlikely to succeed for an industry that depends on long-term relationships with its customers, bankruptcy would quickly lead to Chapter 7 a.k.a. liquidation. That would saddle the Pension Benefit Guaranty Corporation and either Medicare or Medicaid with the burden of providing a taxpayer-funded safety net for hundreds of thousands of retired auto workers that never contributed a dime towards these programs during their working lives.

However, the devil is once again in the details. A blanket tax break for the purchase of just any new car encourages the purchase of cheap gas guzzlers. Germany has taken a different approach: it limits its incentive to new car buyers who agree to scrap their old jalopies. The idea is to finally take cars without catalytic converters or with antiquated diesel engines off the roads to improve air quality. The US has a different problem: low average fuel efficiency. Therefore, any tax break for new car buyers should be limited to models that get at least e.g. 30mpg in the 2008 combined drive cycle and then only if the old vehicle was both rated at less than e.g. 22mpg in the old combined drive cycle and is scrapped.

The excessive dependence of the US transportation sector on fuels derived from oil exposes the economy to volatility in the price of that commodity. In particular, it was the assumption that gasoline would always be cheap that prompted cities to promote low-density urban sprawl in favor of high-density transit-oriented development. Combined with generous tax breaks and exotic mortgages for home buyers, this led to a large asset bubble that was massively reinforced by the securitization of mortgages by investment banks and insurance companies. The run-up in the price of oil, triggered by a combination of robust worldwide growth, a temporary lack of reserve production capacity plus rampant speculation, caused that bubble to burst.

In other words, the most obvious approach for a stimulus in the short term - perpetuating the status quo - risks cementing the same car culture that enabled the current economic meltdown in the first place. There were many other contributing factors, but creating funds and incentives for highway expansion and purchases of gas-guzzlers would simply set the scene for a repeat performance in the future.

It is essential that strings be attached to the stimulus measure to ensure long-term strategic objectives are not sacrificed on the altar of short-term expediency. Moreover, it would be extremely foolish to raid transit and intercity rail funds to expand those for highway construction and new car purchase incentives. Diversification of primary energy sources for the transportation sector is a national security issue, as is tackling wasteful congestion on the nation's roads.

Electric trains remain the only proven technology for moving large numbers of people over long distances safely with a small land use footprint, zero tailpipe emissions and without using a drop of oil. Blind faith in the holy grail of advanced automotive batteries is a risky bet and does nothing to address land use and congestion issues. It would be better to hedge by promoting the development of transit networks, folding electric bicycles and bicycle lane/path infrastructure to complement high speed intercity rail. Of course, as Trains4America reports, there will be conflicts over how to use the limited rights of way that remain after half a century of disinvestment in passenger rail services. Atlanta is one such case, the whole Altamont HSR vs. BART extension controversy in the Bay Area is another.

Bottom line: if funds are added to boost road and road bridge repairs and incentives to improve the average fuel economy of the nation's car fleet, there should be concomitant increases for electric rail and bicycle infrastructure funds to facilitate long-overdue changes in land use policies and oil consumption patterns. Note that vehicles running on grid electricity will only yield reductions in CO2 emissions if that electricity is generated from renewable sources. The stimulus bill already contains funding to build up that capacity, but the real value of electrification is that it dissociates primary energy sources and energy use in the transportation sector.

That means increases in the transportation infrastructure portions of the bill - including incentives to buy more efficient and/or electric vehicles - can be paid for either by deferring tax breaks or, by deferring the construction of renewable electricity generating and distribution capacity (or a combination of the two). As always, the art is to find an appropriate balance without breaking the bank.