Why Is Obama Scared Of The Transportation Bill?

by Robert Cruickshank

During the debate over the stimulus, it became clear that the Obama Administration planned to use the transportation bill reauthorization to offer the long-term changes in funding and modal priorities they had been promising. Unfortunately, the administration is getting cold feet on pushing the transportation bill this year, setting up a battle with two of the House's leading mass transit advocates, James Oberstar of Wisconsin and Peter DeFazio of Oregon (both are Democrats), as Streetsblog SF reports:

It's no secret that key leaders of the House transportation panel and the White House economic team don't get along -- from quips about shovel skills to a stimulus "shouting match," committee chairman Jim Oberstar (D-MN) and his top lieutenant, Rep. Pete DeFazio (D-OR), have become two of their party's leading Obama administration skeptics.

But the committee is now fighting a two-front battle, against an administration determined to put off a new six-year transport bill and a Senate that yesterday approved a "clean" 18-month extension of existing law.

Undaunted, Oberstar and DeFazio today pressed U.S. DOT undersecretary Roy Kienitz to clear one thing up: If the administration wants policy changes added to the 18-month stopgap, and if Kienitz agrees that the House bill's "goals are very similar" to the White House's, should the Senate be allowed to press on with its "clean" bill?

Kienitz answered carefully: "I don't think it's my place to try to make policy on that." A nonplussed DeFazio then wondered who would make policy on the transportation extension, if not senior DOT officials.

"I'm coming to learn that's a bit complicated," Kienitz said.

The problem is that the administration is skittish about the tax increases that would be necessary to fund the $500 billion bill Oberstar has worked out. Senator Barbara Boxer has offered support for indexing the gas tax to inflation, and DeFazio has proposed a 0.01 percent tax on oil speculators, but both are unpalatable to an administration looking at a major battle over taxes to fund the health care reform plan currently dominating the Congressional agenda.

Instead, Obama wants to extend the existing transportation bill for 18 months - kicking it into 2011, past the November 2010 elections. It's not exactly an act of leadership, but then this administration is making a mark for itself as being fundamentally reactive on virtually every major policy issue it is confronted with. Setting the agenda and systematically building support for it and selling it to lawmakers and the public - in other words, doing the stuff that every president has done since at least FDR - does not come naturally to the Obama Administration.

Oberstar is livid about the delay, but anger crosses party lines, with Ohio Republican Senator George Voinovich calling for at most a 12-month extension but would like Obama to get serious about the transportation bill itself. As Streetsblog's Elana Schor noted that the US Chamber of Commerce wants a new transportation bill and is willing to lobby to get it.

Another factor in the complicated fight is the fact that the highway trust fund is quickly becoming insolvent. This is not a new situation - it has been in trouble for nearly a decade owing to anti-tax sentiment - but it is another reason why an extension of the existing bill isn't itself a simple solution.

Ultimately the Obama Administration is going to have to resolve its budding identity crisis. Is it really an agent of change, as the inclusion of $8 billion for HSR in the stimulus indicated? Or is it dedicated to preserving the status quo, just without the insane misanthropy of the Bush-Cheney years? The transportation bill is one area where the administration is going to have to choose, and soon.

Congress Likely To Delay Transportation Bill To 2011

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.

The Next Federal Surface Transportation Program

Rep. James Oberstar (D-MN) Rep. John Mica (R-FL) Rep. Peter DeFazio (D-OR) Rep. John Duncan Jr. (R-TN)

On Friday, chairman Rep. James Oberstar (D-MN) and ranking member Rep. John Mica (R-FL) of the House Committee on Transportation and Infrastructure issued a press release and held a news conference on their blueprint for the next federal surface transportation program, described in a new committee report. They were joined by chairman Rep. Peter DeFazio (D-OR) and ranking member John Duncan Jr. (R-TN) of the subcommittee on Highways and Transit. The event represents the kick-off for drafting the next iteration of the surface transportation bill, which typically sets priorities and secures funding for public works projects for a period of 5-6 years. Traditionally, it has also been a vehicle for members of Congress to "bring home the bacon" to their districts. This time, Oberstar and his colleagues want to use the opportunity to move away from prescribing specific projects (aka earmark pork) and toward a meritocratic system in which USDOT is instructed to evaluate competing grant applications. Those will have to be integrated into six-year strategic plans developed by the department and its counterparts at the state level, with annual performance metrics for each major project or program of smaller ones. It remains to be seen if members of the full House and Senate will be prepared to support this new philosophy. In the hope that they will, the report details substantial reorganization objectives for USDOT such that it can execute evaluate programs and award grants according to legally binding procedures. For example, it calls for a new infrastructure bank within USDOT endowed with at least $50 billion for the six-year period that the new bill is supposed to cover. This money would be used to support strategic, sustainable investments in transportation systems, specifically High Speed Rail and (connecting) local transit. This would segregate public transportation funding from that reserved for highways, at least at the federal level. This new mechanism could essentially solve the federal component of funding California's HSR project. In addition, there would be a new Office of Project Expediting and also an Office of Livability, presumably charged with enforcing appropriate environmental mitigation for affected residents. Secr. of Transportation Ray LaHood would like to focus his department on executing oversight of stimulus-related projects. He therefore asked Rep. Oberstar to extend current arrangements for 18 months by plugging a growing hole of at least $13 billion in the Highway Trust fund. However, Oberstar and his colleagues are unwilling to wait because they have concluded that the current system is broken.

The report's authors claim that over the past 30 years, many states simply haven't stepped up to the plate to fund their 20% of highway projects, never mind the 50% required until recently for rail and transit projects. As a result, available federal funds were not fully utilized. Perhaps the unspoken fear is that with the 2010 midterms approaching and the 2012 presidential election after that, any delay would make it even more difficult to pass legislation for a root-and-branch reorganization of USDOT. Of course, much the same is true of health care reform, financial re-regulation etc. The President's domestic agenda is already full, yet transportation infrastructure is a high priority in Congress. The committee report calls for a total spending volume of $500 billion through 2015, of which 10% would go into the aforementioned infrastructure bank. Federal and state governments combined currently spend around $85 billion a year on transportation infrastructure, a sum the committee says is too small to maintain and expand the nation's aging systems and structures. It would like to see the number ramped up to $225 billion and then held at that level for the next 50 years. To fund the federal portion of this substantial expansion, the report calls for both federal and state gas taxes to be roughly doubled. Republicans in particular will presumably resist legislative efforts to implement that, though they may soon face a filibuster-proof Democratic majority in the US Senate. Note that raising gas taxes to help fund rail and transit infrastructure construction is reasonable in that it reduces the pressure to keep adding lane-miles highways which are more expensive per passenger-mile of capacity, require far more land and lock in the country's arguably excessive dependence on oil.

by Rafael

So What's Happening With The Transportation Bill?

by Robert Cruickshank

As we've mentioned here before, the $8 billion HSR stimulus is just a first step toward a long-term solution of how to fund the development of a faster and more robust intercity passenger rail network in the US. The real money comes in the quintennial Transportation Bill, which is due for renewal this year. President Obama and many Congressional Democrats see that bill as the place where the nation's transportation priorities can finally change, away from massive subsidies to roads and starvation diets for rails. It's perfectly timed to take advantage of a popular new president who has majorities in both houses of Congress - rather than wage an election year battle or deal with a Congress controlled by the other party, Obama can work with allies to craft a new model of funding transportation.

Transportation advocacy groups and reformers are already at work proposing their agendas in an effort to seize the opportunity the Transportation Bill offers. One of the best comes from Transportation For America which yesterday offered The Route To Reform: Blueprint for a 21st Century Federal Transportation Program. The blueprint is an extensive and sensible proposal for decreasing our dependence on oil and cars and boosting rail and other non-motorized methods of transportation. Summarizing it in this post is almost impossible, but I'll pick out some of the best elements:

Performance Targets: Reduce per capita vehicle miles traveled by 16%; Triple walking, biking and public transportation usage; Reduce transportation-generated carbon dioxide levels by 40%; Reduce average household combined housing + transportation costs 25% (use 2000 as base year)

New Federal Transportation Structure: Comprised of four elements: National Transportation Priority Programs (including planning and maintenance backlog); Geographically-Tiered Multimodal Access Program (state, regional, and local); Programs to Complete the National Transportation System (intercity travel, green freight, and "projects of national significance); and Innovation Incentive Programs to boost sustainable and smart growth.

Possible New Revenue Sources: Sales Tax; Gas Tax; Oil Tax; Container and Customs Taxes.

What I really like about the T4America proposal is it emphasizes performance targets that are set up to ensure the development of a passenger rail infrastructure in order to achieve goals we should all be embracing (Peninsula NIMBYs too): reducing dependence on oil, cutting carbon emissions, and saving people money. The whole plan looks quite sensible and workable to me.

Whether it will be incorporated in any way into the final transportation bill is another matter entirely. In the House we have a strong ally in Rep. James Oberstar, Democrat from Minnesota. Oberstar is determined to produce a bill that will boost transit funding, as reported by Infrastructurist:

• The outline calls for "transit equity." Right now the feds pay 80 percent of highway projects and 50 percent of transit projects. That would change.

• It would create DOT agencies focused on a "national strategic plan" and on "mega-projects."

• "DOT's 108 programs [will be consolidated] into four "major formula programs": critical asset preservation, highway safety improvement, surface transportation program, and congestion mitigation and air quality improvement."

• The document seems to call for more transparency with transportation data.

Oberstar has also said that the Transportation Bill has to fund from $400 to $500 billion worth of projects over the next 5 years. If either his approach or T4America's similar approach are successful, we could have a clear source identified for HSR projects. The funding may be explicitly earmarked for HSR or it might be set up to ensure HSR gets it through the program allocations and targets.

The House is likely to produce a very good bill. The Senate, not so much. As has become clear in 2009, the US Senate is where good and sensible ideas go to die. Controlled by right-leaning Democrats in the pocket of banks, large corporate donors, and who are otherwise in thrall to a 1990s-style "pro-business" neoliberal agenda, Senate Democrats are busily planning to water down health care reform, Obama's budget, and the Transportation Bill as well, just as they watered down the stimulus.

One of those who might want a less strong bill than the House is California's own Barbara Boxer. She's up for reelection next year and though she is widely seen as more liberal than Dianne Feinstein, apparently she is worried enough about former Hewlett Packard CEO Carly Fiorina that Boxer is trying to not look quite as liberal as before, as this Reuters article suggests:

"What I think is very important is to index the gas tax to inflation, because, obviously the gas tax is falling behind," she said at the Reuters Infrastructure Summit. "I also don't want to increase the gas tax, but I want it to keep up."...

The Senate is also considering raising the tax on diesel, changing exemptions to the gas tax given to certain groups, taking a percentage of customs duties, relying on private finance, and charging drivers fees based on Vehicle Miles Traveled, she said.

The bill's authors, though, have rejected attaching a small device to cars to measure Vehicle Miles Traveled, Boxer said.

"We're looking at options. Are there ways for people to -- an honor system, when they register their vehicles -- just say, 'This is the miles I had last year, this is the miles I have this year,'?" she said.

Boxer is inconsistent here - she says she doesn't want the gas tax to rise but then wants to index it to inflation. The fact is that indexing means it will likely rise, although the increase would be somewhat more hidden. As to a VMT box, I'm not sure an honor system is necessary, but perhaps it could be as easy as a DMV staffer checking the odometer when you are up for your annual renewal? (Then again, that would increase pressure on the DMV staff, since currently in California you can renew by mail without having to visit a DMV office.)

Boxer's also uncertain about Oberstar's plan to give the states more flexibility:

Like Oberstar, Boxer wants to pass a transportation bill that emphasizes efficiency and consolidates the numerous transportation programs.

But she wants to maintain the same relationship between the federal government and states, whereas Oberstar is considering giving the states more discretion in spending.

An environmental leader in the U.S. Congress, Boxer said she was finding common ground with Republicans on the Environment and Public Works Committee that she chairs for reducing traffic and congestion.

That last part is simply absurd, and I'm disappointed in Boxer for saying it. The ranking Republican on that committee is Oklahoma's James Inhofe, a noted global warming denier and opponent of mass transit. Boxer should feel no need or desire whatsoever to work with Republicans, unless they are willing to accept the values that Oberstar and T4America, as well as President Obama are proposing.

Streetsblog SF articulates some more concerns about Boxer:

Any chance of reforming the transportation bill, which advocates are clamoring for, will require deft political maneuvering to mollify ranking committee member Senator James Inhofe.

Several sources said that Boxer's cooperation with Inhofe is simple math. The $312 billion baseline for transportation over six years is insufficient to meet state of good repair needs and set the country on a course for innovation. Minnesota Representative James Oberstar, chair of the House Transportation Committee, has suggested $400-500 billion would be needed, while the American Association of State Highway and Transportation Organizations (AASHTO) and the American Public Transit Association (APTA) argue in their Bottom Line Report that at least $160 billion will be needed annually. In order get from $312 billion to $500 billion or better, Boxer will need to get approval for new revenue streams, which would require a filibuster-proof majority, something she might not get without Inhofe and other reluctant members on the committee.

Several interviewees also pointed to Senator Boxer's alliance with Inhofe on an amendment in the federal stimulus bill for an additional $50 billion in highway money as a bad sign.

"You have polar bears and glaciers on your website... then throw people back in their cars?" said one official who insisted on anonymity.

I'm used to watching DiFi like a hawk. Not so much with Boxer. The rest of the article notes some more discomfort with Boxer's positions, so I suspect we're going to have to target Boxer frequently this summer as the Transportation Bill works its way through the Senate.

That is, unless it gets pushed back to 2010 as Sen. Mark Warner of Virginia suggested yesterday:

But Sen Mark Warner (D, Va.) is now saying he’s “not sure” that the estimated $500 billion authorization will happen until next year. According to a story by Terry Kivlan in CongressDaily, Warner thinks that “Congress might have too many big-ticket items on its agenda this year to take on a transportation package.” Speaking at an infrastructure-focused conference hosted by the Departments of Transportation and the Department of Commerce, the senator remarked: “I’m not sure you are going to see a full transportation bill put out this year.”

He’s specifically worried about funding availability in light of the fact that revenue from the gas tax, which pays for highway and transit programs, is no longer sufficient to cover outlays. He called this the “elephant in the room” with respect to infrastructure funding.

In short, Warner is saying that he's scared about anything involving fiddling with the gas tax, and that the big bad Republicans might hit Dems on that after a big fight over health care and the budget. What Warner doesn't explain is how 2010 is any better a time to deal with the Transportation Bill, as it would be an election year.

This would be so much easier if the US Senate wasn't populated by the timid and the right-leaning. Unfortunately, we're going to have to deal with them if we want a good Transportation Bill and not something that mindlessly repeats the same flawed anti-transit policies of the past.

Finally, Some Stimulating Details

Yonah at The Transport Politic breaks down the transit funding in the draft stimulus package and generally finds it wanting:

the bill does virtually nil for intercity rail, providing only $1.1 billion for Amtrak and state-based rail provision. The bill notes that the Northeast Corridor alone needs $10 billion in upgrades. How will this funding solve that problem, or tackle those of other corridors around the country? Where’s the money for high-speed rail operations?

The closest the proposed stimulus comes to funding HSR is this:

• “Preference” for FRA-compliant rolling stock; implication is that agencies could buy non-FRA compliant stock (i.e., lighter European or Asian trains) - this would be a change in policy, which currently doesn’t allow such trains
• Preference for projects “that support the development of intercity high speed rail service;” $300 million won’t actually allow for the creation of HSR, but it could help push towards that goal… this implies that local non-HSR corridors would not be as likely to get aid
• Federal share can be up to 100% of total cost, also a change in policy

Some of this suggests a willingness to shift priorities, but overall the funding here is just too tiny to make a significant dent in our transportation needs, our HSR needs, or even our economic needs. Several economists including Krugman are saying the stimulus ought to be doubled, which sounds about right to me.

Rep. Jim Oberstar, chair of the House Transportation Committee and passionate rail advocate, has been rather outspoken in his anger about the underfunding of transit in the proposal. He explains what may have happened to make the stimulus plan so weak:

Basically CBO got numbers from the Bush administration DOT that said it was not possible to spend money on these projects within 90 days, meaning they're not "shovel ready". Oberstar explains that's BS and it's ridiculous to be taking numbers from the Bush folks at DOT that are getting ready to high-tail it out of town. He's really mad about this and I know he's going to fight to get more spending on infrastructure.

Meanwhile former Providence, Rhode Island Mayor Joseph Paolino opines for HSR on the NEC in the Washington Post:

Constructing a system for high-speed rail will be expensive, but these are not normal circumstances. Obama takes office next week amid the worst economic crisis since the Depression. Large public investments and innovation are key to reviving the economy and putting people back to work. High-speed train service on the Northeast corridor would be an excellent place to start moving our citizens, and our economy, into the 21st century.

Obama and his economic team, including the stuck-in-the-1990s Lawrence Summers, clearly are not thinking in terms of fundamental change, or even in the terms of real economic recovery. Until they shed their hesitant and small-minded approach to the stimulus they're going to be doing America a disservice. I don't want much - just some money for actual HSR projects in the stimulus as a down payment on and a sign of future intentions to fund HSR in California, the NEC, the Southeast, the Midwest, Texas, and the Pacific Northwest.

Come on, Obama. Time to show America the change you've been promising.