President Obama’s proposal to fund high-speed rail in the next surface transportation bill does more than boost the prospects that fast trains could be running in places like Florida and California by 2018. He calls on Congress to end its haphazard pork-barrel approach to building infrastructure.
In today’s 2012 budget plan, the president outlines a new template for federal transportation spending. He calls for strategic infrastructure spending that ends congressional earmarks that have resulted in the squandering of taxpayer money, and for consolidating many of the current funding streams for surface transportation into a unified “Transportation Trust Fund,” a proposal that echoes the recommendations of a recent PPI policy memo.
He challenges Congress to move “toward a cost-benefit analysis of large transportation projects” and to an “integrated national strategy” that harkens back to the original purpose of federal transportation spending – to defend America at the height of 1950s Cold War by building interstate highways.
Obama smartly frames today’s overarching issue not as a matter of simple budget cutting, but of helping business and labor compete in a global marketplace by modernizing infrastructure “in desperate need of repairs and upgrades.” The 2012 budget calls for $556 billion in transportation spending for the next six years, with about 10 percent going to high-speed rail and Amtrak’s existing train service, about 8 percent to mass transit and the remaining 82 percent for highway infrastructure improvement.
Now begins the raucous debate.
For one, Obama’s proposal will need to withstand the political strain of special interests vested in the “old ways” of funding highways from preset state formulas and congressional earmarks.
For another, House Transportation Committee Chairman John Mica (R-Fla.) has his own ideas: a six-year bill of only $250 billion (less than half of what Obama wants). A quarter of a trillion equals the amount of tax revenues expected from federal gas taxes.
The good news is that Mica understands that America needs better surface transportation, including selective high-speed rail. His solution is leveraging private capital with federal funds.
Getting high-speed rail into the dedicated funding scheme of the transportation bill is the essential first step to attract private capital. Mica knows this and will need to educate his colleagues to this basic fact of economic life.
Raising the 18.4 cents-per-gallon federal gas tax, which has remained unchanged since 1993, could help fund the $556 billion Obama proposes. This approach has been endorsed by the U.S. Chamber of Commerce, but faces congressional opposition because of the potential public blowback of higher taxes at the pump.
In short, winning approval for better transportation in the tricky crosswinds of a divided Congress and tax-phobic public is going to require the White House to stay laser-focused on the right track.
Tags: high-speed rail, House Transportation and Infrastructure Committee, President Obama, transportation bill
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To pay for the proposed $556 billion six-year surface transportation reauthorization bill, more than twice the amount of the last reauthorization, President Obama is simply saying that he will “commit to work with Congress to ensure that the funding increases… do not increase the deficit.” But the tax revenues expected to be deposited into the Highway Trust Fund over the next six years are estimated to total only $230 billion according to the Congressional Budget Office. How does the President propose to fund the $326 billion funding shortfall between income and expenditures? I think I know what the congressional response is going to be: “Mr. President, we will need to learn how to live within our means.”
I think we will need to take a serious look at where we are as a nation, where the price of oil is heading ($300 per barrel by 2020, only 9 years away), and invest in transportation that greatly reduces our dependency on oil as quickly as possible. This really needs to be front and center in transportation policy going forward. Every dollar we spend now needs to be directed at meeting the goal of greatly reducing oil dependency in people’s daily lives. This means much more rail – national, regional, and local rail powered by electricity that can be increasingly generated by clean, safe renewable sources.
We have to act and spend our way out of this situation, to save money over the next decade. We can’t sit and do nothing and watch all our current forms of transportation rise in cost to levels we can’t afford to run them. This would paralyze the nation. We have to do better and hussle now to get the new forms of transportation in place well before we get to the sky-high oil prices predicted for 2020.
We are entering a very different era for the nation. Our current forms of transportation were built for $20 per barrel oil, and we are struggling now with oil at $85 per barrel, and in 2008 we were drove into a recession largely because oil rapidly rose to $147 per barrel. So to think we can continue with the same policies with oil rising way past $100, then past $200+ per barrel is very short-sighted. It takes some years of planning and construction to get these new rail systems up and running even if we expedite the process, so we are already late!
[...] Budgeting For a Fast Train Future [...]