Monday, June 29, 2009

Congress Likely To Delay Transportation Bill To 2011

NOTE: We've moved! Visit us at the California High Speed Rail Blog.

The US Congress is getting a reputation as the place where good ideas go to die. Although currently held by the Democratic Party, the real power lies with center-right Democrats who are generally skittish about significant change, and certainly wary of either spending money, finding new revenues for programs, or both.

We can see this in the health care and the climate change bill - but we can also see it in the discussion of the reauthorization of the Transportation Bill, due in 2009. In the House, Jim Oberstar has been pushing to produce a bill that would better fund public transit and shift the government's priorities away from roads and sprawl. Transportation for America has an analysis of his efforts here - it's a mixed bag so far.

But the most contentious aspect of all is the matter of how to fund the federal government's transportation obligations. The US highway trust fund has been on the verge of insolvency for a while now, dating back to the early Bush Administration. When then-Secretary of Transportation Norm Mineta proposed a gas tax increase to fix the problem, President George W. Bush said no, as Mineta recounted earlier this month:

In 2001, knowing the next highway reauthorization was set for 2003, we developed a six-year funding mechanism that called for a 2-cent-a-gallon gas tax increase in the first year, a 2-cent-a-gallon increase in the third year, and another 2-cent-a-gallon increase in the fifth year. As I recall, that would have been a $330 billion proposal and left us with a $7 billion unobligated trust fund balance after six years. We went to the Oval Office, and after we went through the entire presentation, President Bush takes a marker, circles the gas tax increases, and says, "Norm, I don't want any of those tax increases. Get those out."

So we went back and put a CPI inflator on the gas tax in the fifth year. Keep in mind that the gas tax had not been raised since 1993. We returned to the Oval Office, went through the presentation, and afterward President Bush said, "Norm, that's a tax increase. Get that out."

Bush may be gone, but his attitude now dominates a Democratic Congress. As Yonah Freemark noted over at The Transport Politic, there is no consensus on how to fund transportation, and Barbara Boxer suggests the most likely outcome is an 18-month extension of the existing transportation bill, which would push the issue out to beyond the 2010 midterm elections. To Freemark, the problem is that Congress isn't willing to face up to the revenue problem:

More importantly, no one in Congress is being frank about raising revenues to support transportation. Mr. Oberstar’s bill left the funding sections blank, and Mr. LaHood has been openly lobbying against any increase in the gas tax. Ms. Boxer’s comments today reaffirmed her opposition to the same and expressed her unwillingness to support a VMT system, which she called “too intrusive.” No one on the invited panel at the hearing provided serious alternatives to those two funding sources, nor did any senator, though everyone seems convinced that a major program expansion is necessary. Funds from the climate change bill, which might incorporate a carbon cap-and-trade system, may come into play, but those dollars are far off and uncommitted for now.

Mr. Oberstar has been adamant in his desire to push forward the next transportation bill now, but this hearing made clear that the Senate is not going to play along. Ms. Boxer is chair of the Committee on Environment and Public Works, and her position will effectively block Mr. Oberstar’s bill even if that legislation passes in the House. Without the support of the White House, Mr. Oberstar is loosing ground. His inability to pinpoint a stable funding source is similarly problematic.

What hasn’t been suggested, but that which I will continue to bring up, is a simple abandonment of the idea that transportation must be sponsored by its “users.” We are all beneficiaries of a strong transportation network, and filling the Trust Fund mostly with general fund sources is a viable and long-term solution that would require none of the shenanigans that currently deteriorate efforts to raise the gas tax or impose a VMT. Whether now or in 18 months, we’re going to need something better than today’s non-proposals from Ms. Boxer.

I wholly agree with these statements, and it is certainly time to provide general fund support for transportation projects. Infrastructure, especially mass transit infrastructure including high speed rail, is at the center of this nation's economic recovery effort and our 21st century prosperity. Unfortunately, Congress seems to have totally abandoned any interest in economic recovery or long-term planning, and is instead dominated by obsolete 20th century concerns about the politics of taxes and user fees.

Barbara Boxer's reluctance to propose revenue solutions, and her desire to kick the can down the curb, is part of a growing trend in her approach to policymaking that is much more risk-averse and centrist than we are used to seeing from the more liberal of our two senators. Facing re-election in 2010, Boxer appears to have concluded that she needs to play to an assumed political center, seeking bipartisanship (with James Inhofe? ha!) and avoiding anything resembling a tax increase for fear of how it would play with California voters.

These concerns are misplaced. Californians have shown they will support raising revenue for sustainable transportation solutions, as the November 2008 election made clear. Not just in the passage of Prop 1A, which after all was a bond, but in the passage of outright sales tax increases in Los Angeles, Santa Clara, Marin and Sonoma counties. Those counties have nearly 15 million residents, and over 67% of voters in those counties supported the concept Yonah Freemark described above, of asking everyone to subsidize mass transit, not just those who use it.

Boxer's unwillingness to lead is sadly being matched by President Barack Obama. Over the first six months of the Obama Administration a disturbing trend has made itself clear. Obama likes to talk a big game, and will make public statements promising a new era, broad reform, and an embrace of policy change. He then leaves all the details up to Congress, refusing to get involved in the nitty gritty of the negotiations. As a result Congress's natural tendency to either do nothing or do the wrong thing is asserted, and we get outcomes like an 18-month postponement.

How this affects HSR is unclear. High speed rail will be a part of the new Transportation Bill. How it will be funded remains totally unclear. Obama wants to see a long-term HSR program come out of Congress, but as with so many other aspects of his agenda, Obama is going to have to learn that if he wants Congress to do something, he is going to have to force the issue and make it happen himself.

Until Obama does, the US Congress will remain a graveyard for common sense and smart, proven, effective policy.

14 comments:

Paul Herman said...

I think the gaping hole is funding. Also, the Obama administration is focusing all of their efforts right now on health care and climate change. They really don't see transportation as a major concern until after the 2010 midterms, which politically speaking, is actually quite understandable. It's a shame that that's how our system works, but it truly is about getting elected. It's one of the flaws of the system. Obama NEEDS to be using that political will he has (he's still in the 60% approval ratings yeah?) and his focus is on sweeping changes in health care and global warming. I think mass transit will see a good cut in the climate bill. I think Obama has to if he is thinking about delaying a badly need-of-reform transportation bill, which has been stuck in the muck through the Bush Administration. We will see our day in the Obama Administration. We want it now because of all of the hype high speed rail has been getting, but in reality, it could probably wait. We will lose some ground for sure, but at the end of the day, we will get what we want, a transportation bill that works for 300 million Americans it will need to serve. It sucks, we thought this was the year, but the right pieces are in place, we're just gonna need to wait our turn.

Rafael said...

The risk in delay to after the 2010 mid-terms is that the Democrats may lose the filibuster-proof majority that the upcoming ruling by the Minnesota Supreme Court is widely expected to bring.

Taxes are not inherently evil, they are a choice to make collective investments in shared infrastructure and social services. The state of California is a prime example of rigid ideological efforts to drown government in a bathtub.

Democrats need to be intellectually honest enough to admit that overdue spending on infrastructure must be funded either through taxes or through cuts elsewhere in the budget. The Pentagon in particular has grown beyond all reasonable measure during the Bush years. The fact that US troops are on the ground abroad is no excuse for throwing taxpayer money out of the window on advanced weapons systems that are of little or no use in asymmetric warfare. The excessive reliance on expensive contract labor in waging the wars in Asia also represents a wasteful practice in the middle of a deep recession.

In spite of Secr. of Defense Robert Gates' refreshing change of focus, Congress raised the DoD budget by 4% rather than begin cutting it right away by roughly the same amount. In just a single year, the difference amounts to almost $50 billion - as it happens, just the sum Rep. Oberstar wants to reserve for rail and transit capital projects over the next six years.

A nation that permanently favors military over civilian investment is a threat to its own future wealth as well as to other nations. The cold war is long over, now the US should force its allies to shoulder their fair share of the burden of coping with the smaller conflicts that have flared up in its wake.

political_i said...

If we really wanted HSR, we could develop a few freight routes for rapid rail at 110 mph. These could be used in national defense if supplies needed to be shifted across the country quickly. It would be much quicker than the IHS.

traal said...

"What hasn’t been suggested, but that which I will continue to bring up, is a simple abandonment of the idea that transportation must be sponsored by its 'users.' We are all beneficiaries of a strong transportation network..."

But some of us benefit more, or more directly, than others. Not making transportation pay for itself distorts the market for transportation, creating inefficiencies and waste. Railroads in the USA are underused because they must pay for themselves while trying to compete with heavily subsidized roads for interstate freight.

TomW said...

traal said: Not making transportation pay for itself distorts the market for transportation... Railroads in the USA are underused because they must pay for themselves while trying to compete with heavily subsidized roads for interstate feight.
That is an argument for a level playing field, not for making transport pay for itself. You could use that exact same line to argue railways deserve more subsidy, rather than roads getting less.

The average fuel tax in the USA is 45.6/gallon (source: wikipedia), and US cars averaged 31.2mpg for 2007 (source: http://www.futurepundit.com/archives/004903.html), implying US road usres pay 1.46c/mile in fuel tax... whereas driving on the Penn Turnpike costs about 8c/mile. In order to get that much through tax, fuel taxes would have to rise to around $2.48/gallon.

jim said...

The democrats in congress are backing down on a lot of things that cost money and or political capital because the midterms are coming up and despite the president's popularity, they still have to listen to their constituents at home. Americans just don't like taxes and any representative who votes to increase taxes when americans are unemployed and broke fears losing an election. It is unlikely that dems will hold on to the majority after 2010 and while Obama is likely to get a second term, he won't have the free reign he has now. Of course if the economy pics up in the next 12-18 months the dems may be safe but there is a lot of backlash against all the federal spending. There is a disconnect between between Obama's popularity on the one hand and the dislike of taxes and spending on the other and once you get outside the bay/LA bubble the concept of cutting defense and raising taxes to fund "socialism" as they call it, is not going to fly and the republicans are gaining some political ground by framing the argument in these terms. just as with health care, even the dems have been "got" by the huge amount of money flowing into Washington from the health care lobby, and added to the pressure from the constituents who have good insurance who outnumber those who don't and who don't want to pay for others "welfare". Luckily California will be getting a nice chink of money for our project and it will move forward.

traal said...

TomW said: "You could use that exact same line to argue railways deserve more subsidy, rather than roads getting less."

Why not both? Then if one strategy fails, we'll still have a backup.

"US road usres pay 1.46c/mile in fuel tax... whereas driving on the Penn Turnpike costs about 8c/mile. In order to get that much through tax, fuel taxes would have to rise to around $2.48/gallon."

That would agree with the TxDOT study which found that "to completely pay for the 15 miles of SH 99 from I-10 to US 290 in Houston in gas taxes would be $2.22 per gallon."

Fuel taxes in Europe are higher than that. Coincidentally, Europe has some of the best public transportation in the world.

jim said...

The interstate system should convert entirely to tolls at rate which pays for 10 percent of maintenance and expansion.

get real said...


Bush may be gone, but his attitude now dominates a Democratic Congress.


So writes Robert. What a stupid statement.

Reality Check said...

"Fuel taxes in Europe are higher than that. Coincidentally, Europe has some of the best public transportation in the world."

Or not coincidentally. Europe also has some of the best roads in the world too. Compared to Germany, for example, Bay Area and California roads are pretty damn shabby.

The public transit infrastructure and service levels (both intra- and inter-city) ... well, there's no comparison. Ours is a shameful joke -- if you can even find it.

jim said...

That's because americans are not going to pay the taxes that europeans pay. Given the choice, and we've had decades to choose, americans prefer to just get by and keep taxes as low as possible.

Fred Martin said...

What hasn’t been suggested, but that which I will continue to bring up, is a simple abandonment of the idea that transportation must be sponsored by its “users.” We are all beneficiaries of a strong transportation network, and filling the Trust Fund mostly with general fund sources is a viable and long-term solution that would require none of the shenanigans that currently deteriorate efforts to raise the gas tax or impose a VMT. ...

it is certainly time to provide general fund support for transportation projects.


This misguided sort of wishful thinking is the exact opposite of how Europe approaches transportation, and their system is far more serious about environmental sustainability than the US. Europeans heavily tax automobile users with stiff fuel taxes, and most of that revenue goes into the general fund for other things such as health and education. Europe never had the scale of America's heavily-subsidized, massive road-building programs, because they diverted the heavy fuel taxes away from new transportation infrastructure. Europeans obviously drive smaller, more efficient cars, and alternatives are more competitive in Europe. Their transportation system is better for the lack of a Highway Trust Fund or general revenue being pumped into mega-building.

Cutting off the massive public subsidies for road-building will actually improve the competitiveness of alternatives. Unfortunately, the transportation sector is awash in inefficient public subsidies, and increasing them isn't going to help.

Alon Levy said...

Europe has the best public transit in the world? Really? Did Japan sink into the sea or something?

YesonHSR said...

More DC games..if Boxer thinks all those valley Repubs are going to like her better in 2010 because she held off on this bill and did not raise the gas taxs she is DREAMING..they hate her..any loss of support in SF and LA will see here defeat.