» Major components of the President’s American Jobs Act include direct grants for improved transportation and an infrastructure bank.
A year and two months away from the United States’ next big election, politics in Washington are at a virtual standstill, with Democrats and Republicans completely at odds with one another when it comes to government policies. The situation has aggravated an already difficult funding situation for the nation’s transportation, which lacks an adequate funding source and faces a murky future. Meanwhile, the unemployment situation worsens.
President Obama’s speech tonight, in which he introduced a proposed American Jobs Act, was designed to stake a strong ground in opposition to the anti-investment GOP. In addition to a number of other policies, it promoted transportation investment as a great opportunity for reducing the rate of joblessness and improving the sometimes miserable condition of the country’s highways, rail, and transit. While the speech is unlikely to result in much Congressional action — Republicans do not seem inclined to support any of the President’s initiatives — it came across as thoughtful and in line with the nation’s great economic needs of the moment.
For transportation, the bill would direct $50 billion to the construction of highways, transit, rail, and aviation. Another measure would deposit $10 billion into an infrastructure bank. Both funds would identify and sponsor the projects most likely to spur job growth as quickly as possible. Though the proposal was not laid out in further detail tonight, it represented another variation of the ramp-up in investments in transportation the Obama Administration has been attempting to promote for several years now.
Even so, the project was a clear step back from the far more ambitious proposals Mr. Obama made at the beginning of the year, when he suggested directing $70.4 billion to highways, $18.5 billion to transit grants, and $8.0 billion to high-speed rail in 2012 alone.
In response to the President’s new plans, House Majority Leader Eric Cantor (R-VA) criticized him for being unwilling to describe how the investments would be paid for, evidently unwilling to accept the Keynesian evidence that in difficult economic periods it is a good idea for governments to use deficit funding to support the economy. Chair of the House Transportation and Infrastructure Committee John Mica (R-FL) immediately articulated a position against the plans for the infrastructure bank, arguing that states should take on the responsibility.
Just yesterday, the Republican leaders of the House Appropriations Committee unveiled their proposals for massive reductions in spending at the U.S. Department of Transportation, reducing highway expenditures to $27.7 billion in 2012 (from $41.8 billion in 2011) and transit formula spending to $5.2 billion (from $8.3 billion). No new New Start or Small Start transit capital grants would be funded. The high-speed rail program, which had once been one of Mr. Obama’s signature policies, would be entirely cut. These are austerity measures completely out of step with an economy desperately in need of stimulus, job creation, and infrastructure improvements.
Alternatives to Mr. Obama’s plan that would continue to limit transportation funding from the federal government have little credibility — at least if we believe that keeping the nation’s mobility networks in a condition of acceptable repair is an important national goal. States have limited ability to increase their indebtedness, and the cutbacks that have followed the recession have demonstrated that governors and state legislatures have been almost universally unwilling (or unable) to invest their own funds to shore up their roads and transit lines — in spite of a decline in support from D.C.
At this point, with a Congress that has now dithered on the matter of transportation funding for 709 days, the President’s proposal is about as good as it gets. That doesn’t mean, however, that it has any chance of making it into law.