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Congress DOT

An Interview with Secretary Foxx

» Foxx reiterates the Obama Administration’s demand for more transportation funding, but fails to commit to a new funding source outside of business tax reform. He also is non-committal on reforms to the Federal Railroad Administration’s rules for commuter rail systems.

Yesterday, I had the opportunity to chat with Anthony Foxx, who became the U.S. Secretary of Transportation last year and was previously mayor of Charlotte. I wrote an article on the interview’s major focus points on the website of my employer, Chicago’s Metropolitan Planning Council. The transcript of the full interview is posted at the bottom of this post.

In addition to the conclusions I noted on MPC’s site (and please read those; they are relevant to the discussion here), I want to note a few points about the interview that reflect my personal sense of the administration’s progress on moving forward with a new transportation bill.

It was evident in Secretary Foxx’s responses that he remains committed to the Obama Administration’s push to increase funding for transportation. Of course, the Obama Administration has been promoting increased funding for transportation since 2009, beginning with the stimulus (which roughly doubled federal expenditures for transportation for a short period), and continuing with a number of proposals over the years, each of which promoted the idea of a huge infusion of funds for transportation but which ultimately produced little change. From that perspective, Secretary Foxx’s determination to pass a new four-year, $302 billion program for infrastructure (a plan that would increase expenditures by roughly 50%) seems rather unlikely to result in much of anything.

This is particularly true in light of Senator Barbara Boxer’s proposal to simply extend the funding levels provided for in MAP-21, which themselves were little changed from the previous level of spending. At the heart of the problem, as we all know, is that the transportation user fee model (premised on fuel tax revenues) has collapsed and no one is willing to do much of anything about it. It’s not Secretary Foxx’s fault, but the Obama Administration’s decision to propose funding transportation by using “business tax reform,” which is essentially premised on one-time repatriation of foreign assets, is a half-empty call for change, neither likely to pass Congress nor a long-term solution. I’m skeptical. It’s not that the Administration has done anything terribly wrong, but there certainly has not been much courage coming out of the White House on this issue.

No one with particularly significant power is willing to simply say, “I will increase the gas tax,” or “I will institute a vehicle-miles traveled fee.” It’s not an easy demand, certainly, but it is a necessary one if we want to move forward with more funding for our road and transit systems.

In this context, it is frustrating to watch Secretary Foxx, like Secretary Ray LaHood before him, extol the values of high-speed rail (I confess I hold them dear as well), without making any progress in actually paying for it. Foxx pointed to Florida and Texas as models of interest in high-speed rail even in relatively conservative states — a fair point — but he failed to note that those states are hoping that the private sector will chip in for most or all of the cost of those lines. Certainly conservatives will support transportation investments that are fully paid for by someone else, but what happens when the Florida or Texas projects require public subsidy? Will they face the same resistance as has California’s heavily contested project has?

On the other hand, what other options does the Administration have in the face of a recalcitrant House of Representatives?

Nevertheless, Secretary Foxx’s answers about the Department of Transportation’s willingness to expand the possibility of local funding options were positive. States and cities should be able to toll their local highways if they so desire, but right now they’re stymied by federal regulations that make tolling impossible on most Interstate highways. His willingness to consider Transportation for America’s new policy proposal that would encourage local and state competition in awarding transportation funding is potentially exciting.

In addition, where the executive branch of the federal government may have an easier time producing positive results is in the implementation of regulatory changes within agencies of the Department of Transportation. One issue that has been of particular concern to those interested in improving American rail service has been the Federal Railroad Administration’s (FRA) rules about train weight and strength, which effectively make lighter, more efficient European and Asian trains impossible in the U.S. Stephen Smith noted last year in Next City that the FRA was considering changes to these rules by 2015, when positive train control (PTC) is supposed to be implemented.

Secretary Foxx, however, was far less direct on the issue than this change would imply, noting that “Whether that issue or how that issue comes up in the context of that is still an open question, but we’ll take a look at any issues put out there.” It’s hard to know based on that whether the Department of Transportation or the Obama Administration in general will take these issues seriously in the coming months, but the issue is important, and we can only hope they’ll notice.

—————–

Full interview transcript follows below

Categories
Commuter Rail Congress DOT Finance High-Speed Rail Intercity Rail President

The Administration Refreshes Its Push for a Major Infusion of Funds into the National Rail Program

» The Obama Administration hopes to invest almost $40 billion in new and improved passenger rail infrastructure over the next five years. Good luck getting that through Congress.

It’s an annual spectacle. The President releases his budget. The budget proposes a huge expansion in spending on surface transportation, particularly in high-speed rail. Administration figures testify on Capitol Hill, hoping to raise the specter of infrastructure failure if nothing is done. The Congress responds lackadaisically, with Democrats arguing that something should be done and Republicans doing everything they can to prevent a cent more from being spent, and ultimately no one agrees to much of anything other than a repetition of the past year’s mediocre investments.

Will things be different this year?

The question is particularly relevant because the U.S. Government’s rail investment program — its authorization for allocating funds to the Federal Railroad Administration (FRA) will expire this year. Legislation supporting the FRA, as well as Amtrak, the national passenger rail corporation, and improvements to freight rail, is necessary to ensure continuity of funding. Previous bills have authorized funding over five-year increments. In effect, the bills set out how much Congress expects to expend over the next few years, and allows the House and Senate to avoid debating the issue for years at a time.

The Obama Administration has responded to situation by proposing a massive infusion of funds for passenger rail and the creation of a “National High-Performance Rail System.”

Total funding for rail activity, both for operating funds and capital projects, would increase from about $1.8 billion in 2013 to more than $6.5 billion in fiscal year 2014. Over the course of five years, about $40 billion would be devoted to rail improvement across the country, a massive expansion paid for with funds “saved” from ending military operations overseas. This would be headlined by a $5 billion “jump-start” stimulus for rail, part of a $50 billion infrastructure package the Administration is hoping Congress will pay attention to.

In many ways, the Administration’s bill is similar to past attempts at legislating major increases in funding for rail. In 2011, for instance, the government promoted a $53 billion plan to “win the future” with rail lines funded across the country. Yet Congresspeople reacted to the proposal with little interest — and members didn’t have to, because there was no authorization bill expiring. That’s what makes this year different.

The Administration’s proposal practically boils with ambition. Grants for new and improved rail lines would be heavily oriented (70 to 85%) towards “core express” alignments, which include only corridors where electric trains operating hourly at speeds of 125 mph and above run on their own, dedicated tracks. This says a lot about the Administration’s interest in focusing its energies on the “true” high-speed corridors, which at this time are only in development for California and the Northeast.

Grants in the proposal’s “rail service improvement program” would add up to $3.66 billion in the first year of activity but grow significantly over the course of five years, eventually reaching more than $6 billion a year. This would provide a substantial base of funds for serious rail projects.

But the initial allocations of funds would also ensure support for current rail lines. $2.7 billion in the first year of allocations would be dedicated to operating subsidies and projects that bring the Northeast Corridor to a state of good repair by 2025. Operating funds for Amtrak’s long-distance trains would be maintained, but those for state-supported (short-corridor) train lines would be eliminated after five years, in line with the existing law, to be replaced by profitable operations or more state support (or elimination). Amtrak’s fleet, which is on average 27.7 years old, would be upgraded, particularly in the Northeast, by 2018.

Some funding would also be provided for expanding freight capacity, reducing congestion (such as in the Chicago area), implementing Positive Train Control (which theoretically prevents trains from running into one another), and expanding access for the disabled. Much of the support would be dedicated to corridors owned by private freight rail companies.

All of the funds the Administration has proposed for an expansion of passenger rail service would do wonders for the nation’s train network. Yet even $40 billion committed over the next five years would hardly make a dent in the cost of the California High-Speed Rail project ($70-100 billion) and a new, high-speed Northeast Corridor ($150-200 billion). If the government committed similar funds over the course of five-year increments into the future, it would take a minimum of 27.5 years to complete these projects alone, with no spending on anything else. That’s 2041 before there’s true high-speed service on both coasts — at the earliest!

It’s true, of course, that any investment in new rail service will require financial and planning aid from local stakeholders, and these projects could be completed far more quickly if they were infused with local and state funds (as is the case in California).

Between Boston and Washington, the Northeast Corridor Infrastructure and Operations Advisory Commission (NEC Commission) is tasked with developing a framework for allocating costs along the corridor. As part of that program, it has created a document that demonstrates the rail line’s critical needs and it will be looking to help Amtrak and the states better coordinate their contributions to the line.

If upgrades are going to be made to the line, it will be necessary to ensure that states along the corridor all benefit, and that they all contribute. Determining the best way for them to do that is an incredibly important task that has yet to be fully laid out. Should New Jersey, for instance, aid Amtrak in paying for a new line, if that clears capacity for New Jersey Transit’s commuter rail division? Should Delaware contribute to the cost of a new corridor if no fast trains stop in the state? How much should the states and cities along the line pay to run local trains down the intercity tracks? Before any serious aid is provided to the Northeast, there must be an agreed-upon system for Northeastern stakeholders to answer these questions.

If the FRA reauthorization provided increasing funds to a better managed railroad, assuming increasing funding from other sources (presumably including private players), there is reason to think that Obama’s program could provide substantial improvements to the nation’s foremost passenger rail corridor.

Ultimately, however, the question of whether the Administration’s proposal has any technical merit is irrelevant when there is no political backing for an increase in appropriations for rail service in the United States.

The White House’s claim that its reauthorization would be “paid for” is, quite frankly, a specious argument. To pay for infrastructure, the government wants to use money (“savings generated by capping Overseas Contingency Operations”) that it “would have spent” on foreign wars but that is no longer necessary because the country is pulling out of Iraq and Afghanistan. Yet when the government is operating with a massive deficit, it’s hard to argue that that money is being shifted from one government use to another. It’s debt, pure and simple.

There are plenty of reasons to argue about the benefits of deficit spending, particularly in the midst of the continued recession, but let’s at least be honest about where the money is coming from.

There was an alternative — the Administration could have proposed a new source of revenue to pay for the program, such as an expansion in the fuel tax or the creation of a vehicle-miles travelled fee. That’s needed all sorts of transportation: The Congressional Budget Office reported last week that the Transportation Trust Fund (sourced from fuel taxes) will have a more than $90 billion shortfall by 2023 (and be operating in a deficit by 2015), imperiling any new spending on highways or urban transit.

Yet the Obama White House has shown itself hostile to any tax increase program that would affect lower- and middle-class families, and the Congress has certainly not pushed back with its own proposals. Thus the use of money “that would have” been spent on the wars to pay for the new transportation proposals. With little interest in increasing deficit spending, unfortunately, that proposal, too, is likely to go nowhere. The status quo will be reinforced.

This is a particularly sad state of affairs because the need is there, particularly in the Northeast. The FRA is currently developing a rail investment plan for the Corridor through a public consultation process, and a preliminary alternatives report was released this month, indicating a series of at least possible improvements. Amtrak, too, is desperately pushing for funds, arguing in recent weeks that the Corridor is suffering from an “investment crisis.”

Moreover, many Republicans in Congress have argued repeatedly that they are interested in funding improved rail service on the Northeast Corridor. Former House Committee on Transportation and Infrastructure Chair John Mica (R-FL) said in 2011 that “We have to redirect our efforts to having at least one success in high-speed rail in the nation. And that high-speed rail success needs to be here in the Northeast Corridor.” Though he didn’t propose any specific way to pay for those improvements, his interest is indicative of the GOP’s willingness to compromise. (And indeed, current Committee Chair Bill Shuster also has been a supporter of Amtrak.)

Perhaps the Administration’s policies should recognize this? On the other hand, the government clearly has no interest in shutting out three-fourths of the nation from rail grants.

Anthony Foxx, who will be nominated as the government’s next Secretary of the Department of Transportation this week, has proven to be a strong supporter of rail transportation in his position as mayor of Charlotte. But his ability to promote the Administration’s rail reauthorization bill has yet to be proven. Current DOT Secretary Ray LaHood, formerly a Republican Congressman from rural Illinois, has failed to produce bipartisan consensus in favor of more transportation investment over the past four years. How can Mr. Foxx, a strong urban Democrat, do so? The House remains controlled by the GOP and the Senate may shift in that direction after next year’s midterms.

There’s a lot to be excited about the rail reauthorization bill the Administration has proposed, but there is more to be skeptical of. We have a long way to go before there is solid support in Washington for more spending on rail transportation.

Categories
Airport Congress DOT Finance Social Justice

Our Government: By the Wealthy, For the Wealthy

» Congress’ willingness to address the sequester, but only for the Federal Aviation Administration, is a disgusting sort of bipartisan agreement.

The sequester, which went into effect at the beginning of last month, cut more than $85 billion from the federal budget for this year alone. Its cuts, whose impacts will continued to be felt through 2021, were disproportionately focused on domestic programs. Public transportation, for instance, was dramatically affected: Almost $600 million was cut from funding directed towards mitigating the effects of Hurricane Sandy; another $104 million was cut from capital investment grants that fund new train and bus lines; Amtrak lost $80 million.

Other cuts, such as those to the nation’s affordable housing, Head Start, schools, and meals for seniors, are even more devastating for the nation’s least well-off.

Congress, however, has been incapable of addressing the issue, allowing the cuts to these essential programs to reinforce America’s growing concentration of wealth, low tax rates for the wealthy, and limited social welfare aid. Austerity, which is the intellectual justification supporting these cuts to federal spending, has been shown to only encourage economic stagnation — and often do so at the expense of the least well-off. Yet the national legislature has, as if in complete disinterest, sat idly by as the cuts set in.

That is, until it became obvious that the sequester was affecting the performance of the Congressional elite’s favorite program: Federal support for air travel. Congresspeople, apparently, just couldn’t support having their flights delayed.

Yesterday, the Senate unanimously approved a bill that allows the Federal Aviation Administration to transfer up to $253 million towards the air traffic control system in order to prevent furloughs that had begun this week. This morning, a large majority of House members agreed to the bill, with only a small group of mostly left-slanting Democrats opposed.

The swift and bipartisan response to the problem of slowed air travel leaves a bitter taste in my mouth. While the bill did not approve new funds to the FAA, it effectively forced the agency to shift funds around in a way to ensure that Congresspeople (and admittedly, all American air travelers) could get around the country more quickly.

There of course has been no similar rush to, for instance, shift funds away from the subsidies provided to the oil industry to support mass transit, or to shift funds away from the mortgage interest tax deduction to support affordable housing. Why? Because the Congress, in this quick response to a national problem, has shown itself to be completely concerned with government issues that affect the nation’s wealthy but unaffected by a loss of government aid to the poor. Democrats, who might have used this situation to argue for restoring essential funds for social programs, simply abdicated responsibility, mostly choosing to vote in line with the GOP here.

Federal aid to air travel has its merits, of course. But we must put in question why keeping it functional while ignoring the plight of the poor makes any sort of policy sense.

After all, air travel is largely the domain of the upper middle class and wealthy. A recent interview of U.S. residents at LAX, for example, showed that 72% of travelers who agreed to state their levels of income were making more than the U.S. median household income. Low-income people are far less likely to travel by plane than the wealthy.

Yet the federal government continues to subsidize air travel at record rates. According to the GAO, for example, air travel security provided by the TSA, which cost upward of $9 billion in 2011, has been more than 70% subsidized by U.S. taxpayers in recent years. Passengers and air carriers only commit 30% or so of the costs.

These policies amount to a shift of wealth upwards. Meanwhile, members of the House and Senate continue to fantasize about ways to further cut public transportation.

Categories
Congress Finance

The Federal Role in Surface Transportation Funding

» Contesting Washington’s involvement in transport funding could be deeply problematic.

The issue of how or even whether Washington should be involved in the funding of American transportation programs has been of concern for decades. When most travel undertaken is of a local nature — people getting to and from home, work, and leisure — why should the federal government be involved with the financing of new or maintained roads and transit systems?

Like with most expenditures, one clear argument for federal involvement is that using funds derived from nationally produced revenues allows for a more progressive apportionment of overall spending power, since revenues can be redistributed among the population as a whole. This, after all, is how our national social programs work, in health and education, for example. The benefit is obvious: A more equal society in which people all over the country are blessed with the nation’s wealth. The U.S. provides similar benefits to people in Mississippi and Connecticut even though, of course, incomes in the former state are far lower than those in the latter.

I have argued that transportation, like other issues more commonly referred to as matters of public concern, is an essential matter of overall social welfare. We need a robust national mobility system to guarantee that all of our country’s residents have adequate access to jobs, goods, and people. For this reason, I have repeatedly endorsed the idea of using national income tax receipts to pay for transportation expenditures, moving away from the gas-tax model that is currently used. Using income tax receipts allows the creation of a more progressive model for funding, and, perhaps more importantly, disconnects how revenues for the transportation system are collected from how they are distributed. This latter insight is controversial, however, since most transportation economists can’t help but endorse the idea of a “user pays” model, since it aligns with their sense that supply should equal demand.

For the most part,* the federal government has endorsed this “user pays” approach, using a federal gas tax since 1956 to pay for the construction of the Interstate Highway System, and, in more recent years, its maintenance, as well as the construction and maintenance of many of the nation’s transit systems. The problem is that this approach is not progressive. In fact, states generally receive back from the federal government almost exactly what drivers have paid in taxes at gas stations in those states. As a result, the system does not move funding from the states with the most funding to the states that need funding most.

Indeed, rather than there being some sort of national plan that determines how federal transportation funding is spent, the money is generally passed back out by formula, with a few regulations but not much else attached. Because of differences in Congress about what policies the government should be encouraging, there are no prohibitions on new highways and few preferences for pedestrian or bike infrastructure, as there probably should be. It’s much like the revenue sharing policies that have been in place for the Department of Housing and Urban Development since the Nixon Administration.

Rohit Aggarwala wrote yesterday that the lack of consensus about the rationale for a federal transportation policy, combined with the inability of Congress to raise the gas tax to fund the system, suggests that there is an argument for simply eliminating the federal gas tax and allowing states to determine how to fund their transportation networks alone. This reasoning is appealing in that it would devolve revenue-production and funding decisions to a lower level, which ought to be good for small-d democracy. Aggarwala suggests that a devolution of transportation policies would force low-tax states (which often happen to be high-driving states) to make a clear decision about how many roads they should be building. I would agree that the idea of spending federal gas tax revenues on new highways around Sun Belt cities, which we do a bit too much currently, is anathema to the nation’s transportation needs.

Moreover, seeing as how the federal transportation funding system is not particularly progressive, as outlined above, keeping decision making in Washington no longer seems so reasonable. So let states decide for themselves, not only in terms of how much they want to raise, but also in terms of how much they want to build. In fact, states already raise the majority of their own transportation revenues.

The problem with this whole line of discussion is that it would likely be devastating for transit systems in major cities, particularly in conservative states with no history of state support for public transportation. One major advantage of the current federal finance system is that it devotes a fifth of all transportation funding to transit. The consequence is that cities are awarded funds for maintaining their bus and rail systems by formula at about $8 billion a year (and that’s not even including the $2 billion annually devoted to new transit construction). That funding plays an essential part in ensuring cities can keep their systems up to date.

Were the federal funding system devolved, some progressive states such as New York and California could increase the share of funding aimed towards transit. Yet the evidence suggests that when most states are given the option by the federal government to determine how funding is spent, they direct the large majority of financing to roads. States that have established state infrastructure banks have similarly shown themselves clearly oriented towards highway construction. This is a serious problem if we are to believe that leaving all transportation funding in state hands is a good idea.

There is some argument to be made that cities that want to invest in public transportation should simply pay for it themselves, yet that approach has a number of serious flaws. First, it would be a serious impediment for poorer cities to continue the funding of their transit systems, since they lack adequate local funds; there is a very strong correlation between metropolitan-area income and the amount of money cities spend on transit operations, producing highly inequitable results. Second, cities in low-tax states may find their ability to actually raise taxes locally stymied by state legislatures that believe that any tax increase should be prevented. Finally, there is little evidence that locally funded transit projects are “better” or “more efficient” than federally funded ones, since most projects already require a significant local contribution.

This discussion does not answer the question of whether or not the federal government should be directly involved in the funding of the nation’s transportation systems. But we certainly should raise the question of whether simply diverting all power and decision-making authority to the states would really be of much benefit to the nation’s cities.

* Over the past ten years, Congress has had to shore up its transportation funding repeatedly with infusions from the general fund (income tax- or debt-derived) to supplement the declining revenues from the gas tax.

Categories
Congress Finance President

Bridging the Fiscal Cliff

Buffalo Light Rail

» Declining federal expenditures will hit transportation spending hard. How should states and cities keep up their investments?

The Democratic Party’s big wins in last month’s national elections effectively maintained the national status quo, keeping Barack Obama in the White House, Democrats in charge of the U.S. Senate, and Republicans at the helm of the U.S. House. The Democrats have the cities to thank for their success; urban voters not only turned out to vote at high levels, but they made clear their overwhelming preference for the Democratic Party’s government investment program. In matters of transportation, Democrats in power represent a base of voters that benefits uniquely from new spending on transit, pedestrian, and biking infrastructure.

As part of his proposal to respond to the nation’s “fiscal cliff” — a government austerity mechanism imposed by the Congress a year ago — President Obama suggests investing $50 billion immediately in new infrastructure spending in order to provide additional stimulus for the still-weak economy. The Secretary of Transportation, Ray LaHood, has also noted that the President plans to include significant funding for high-speed rail in next year’s proposed budget.

But Republicans have made clear that they are singularly opposed to any such additional spending, and according to Slate’s Dave Weigel, are actively plotting ways to further marginalize urban voters, rather than, you know, develop policies that attempt to respond to their needs. Thus the chances that the House GOP will approve any additional federal spending on transportation over and beyond what was already approved in the MAP-21 two-year transportation reauthorization bill are minimal. Nor are we likely to see new federal transportation revenue generators such as a gas tax increase or the implementation of a vehicle miles travelled fee.

At the same time, for the most part states have not taken up the slack. Few have taken the initiative to increase their funding for transportation projects and those that have have frequently oriented those investments towards new roads rather than sustainable alternative infrastructure.

What does this mean for cities? Are we likely to see another two years of federal inaction when it comes to improving our transportation system, thereby decreasing the level of maintenance of many of the nation’s transit systems and making expansions downright difficult? Or could we see a breakthrough? Please use the comments section as an open thread to add your thoughts on this and any other relevant transportation issues.

My apologies for the lack of writing as of late; my non-web work has taken hold of my time. I hope to be writing more soon, but in the meantime will post shorter entries such as this to allow for commenters to chip in and keep up the discussion.

Image above: Buffalo Light Rail, from Flickr user Jenn Durfey (CC)