» Plan, yet to be fully laid out, would devote billions to 4,000 miles of new railways, in addition to roads, air traffic, and transit. Congressional approval is unlikely to be easy.
President Obama, at least, is not yet willing to give up on his Administration’s hope to eventually connect 80% of the American population to intercity rail service. After committing $8 billion to such services a year and a half ago during negotiations for the stimulus, the President announced today that he would campaign to devote $50 billion to an improved transportation system, including more spending on high-speed rail, road maintenance, local transit, and better runways. Any such program would require Congressional approval before moving forward.
The Administration’s new proposal seems to be an attempt to accomplish the goals of a new transportation bill without actually passing reauthorization legislation. The previous bill expired in 2009; spending is now being determined year-to-year and being partially sponsored by general income tax revenues, rather than being determined over a six-year period being sponsored entirely by fuel tax revenues, as was until recently the modus operandi.
The federal government currently spends about $50 billion annually on all forms of transportation.
At this time, it is not clear how much enthusiasm the Congress holds for what is being portrayed as a second stimulus, nor how much can actually be built with the money, which would be invested over a period of six years though mostly at the front end. Neither the House nor the Senate, both under Democratic control but threatened in this fall’s elections by increasingly popular anti-spending Republicans, seem particularly thrilled about the idea of voting for a new government program. Few specifics of the proposal have been revealed, other than that the Administration is again promoting its idea for a national infrastructure bank, a program it has had in mind since assuming office in early 2009.
Nor has the President addressed the all-consuming question of how many jobs this program will produce. Despite the fact that there is evidence that investment in public transportation operations is one of the most effective ways to get people back to work, what little has been said about this new spending seems to indicate that it would only go to capital investments. Funding will not be debt-based, the President said, though the exact mechanism to raise the needed dollars has yet to be worked out.
Mr. Obama’s framework, he claimed today, would result in the renovation of 150,000 miles of existing roadways, the construction of 4,000 miles of new railways, and the rehabilitation of 150 miles of runways. Evidently, money is also to be earmarked for the public transit New Starts program, which funds major expansion programs, usually in the form of rail rapid transit. The exact distribution of funds has not been addressed, nor has a decision-making process about worthy projects been established.
The proposal, though certainly a refreshing move from an Administration that over the last few months had threatened a “freeze” on spending, may simply not go far enough to produce effective change, especially for the national high-speed rail program. Even if all the money were spent on fast trains, the majority of money would have to be devoted to just one corridor: the California High-Speed project, which is in need of $20 to $30 billion in federal funds to be completed, depending on the level of private investment pinpointed. As things stand, with the $50 billion to be spread out between all modes in the transportation system, far less will actually be spent on any one mode. This means that smaller, incremental projects are likely to be the biggest beneficiaries here.
Mr. Obama, mimicking what has become standard industry commentary, suggested again that a national infrastructure bank be created to fund transportation projects. It’s a problematic concept from a variety of perspectives, including the fact that unless it is used purely on projects that make money in the long term (generally not rail or transit), it isn’t actually a new funding source, it’s just a different way of distributing existing money.
This second stimulus could be structured to include what the Administration is calling a “long-term framework” for national transportation policy, arguably vital for a country that lacks true goals for the future of its mobility system. Mr. Obama stated his desire to put high-speed rail “on an equal footing” with the rest of the transportation system. The program would also consolidate 100 transportation programs, supposedly with the goal of streamlining operations in the Department of Transportation, a move that was suggested by House Transportation and Infrastructure Chairman James Oberstar (D-MN) more than a year ago.
Instead of relying on a transportation reauthorization bill to accomplish a change in policy, the Congress may have an opportunity to promote similar goals if it moves forward with the passage of this bill. For those promoting alternatives to an automobile-centric transportation network, that may be a good thing, since this program will not rely on an increase in the gas tax to fund new spending, arguably a necessary change if we are to accept the fact that the current user fee model for funding is not only obsolete but inappropriate for today’s needs.
Most importantly, though, despite its optimism Mr. Obama’s proposal is coming at the exactly wrong time from a political perspective. Democrats have been slow to embrace significant spending even on transportation, arguably a matter that is of bipartisan interest. Why will they do so now? And if they do, will they choose to advance the policies the President has suggested are most important to him, like high-speed rail and transit, or will they attempt to placate suburban and rural interests with more highway spending?
Update: As commenter Jim points out, the Administration may be suggesting this proposal as the transportation bill reauthorization itself, which would add a total of $175 billion over the next six years, not just $50 billion. Whether that is true remains to be seen — we have yet to see the actual plan.