Categories
President

The Age of Neoliberalism at its End

Obama’s budget stands in opposition to thirty years of failed subsidies to the private sector

Though President Obama’s first budget proposal, whose rough outlines were released yesterday, doesn’t say much about his transportation proposals, it does provide insight into our country’s new direction overall.

America’s fundamental problem is that it has allowed income inequality to increase rapidly over the past four decades, especially as compared to that in other developed nations. Because of our generous corporate tax breaks, lack of national health care, and inferior education system, we have simply made the problem worse, exasperating the plight of the poor and encouraging the rich to continue enriching themselves – but not the economy as a whole.

Since World War II, the world’s developed economies have provided increasing standards of living to their inhabitants, but at a slowly mounting cost. Pressure by private interests in recent decades has sacrificed many of those gains by destroying social protections at the alter of “free” trade; the result was a reduction in the power of democracies to govern as corporate multinationals, working under the auspices of organizations such as the WTO, have created markets that prioritize the profit-making of a few above the promotion of a quality of life for all. In the name of economic freedom, the liberty of the majority has been reduced.

The Bush administration marked the high point of this neoliberal philosophy by encouraging government to subcontract every aspect of its operations to the private sphere, at higher costs and at reduced dividends. The disaster represented by Hurricane Katrina, which Bobby Jindal claimed showed that “the strength of America is not found in our government,” rather was a demonstration that a government that doesn’t believe in government doesn’t work. The death of thousands of people in New Orleans was the result of a government not willing to take account for its responsibilities, which are fundamentally to provide for the public welfare. That mission has been diluted and sometimes lost since the rise of modern conservatism.

States and cities, quickly loosing the support of the federal government, often have had no choice but to sell off public assets – or let them rot. In transportation, the result was clear: Washington wanted much of the interstate highway system auctioned off to the highest bidder; it wanted a public Amtrak to fail; it was willing to let transit systems fall into disrepair; and it saw no reason to encourage sustainable transportation if it wasn’t profitable.

Mr. Obama’s budget promises a new day in the United States, a return to the hope that as a collective, we can ensure the health and well-being of all individuals. It turns its back on the premise that the market forever decides what is right or what is wrong. It encourages us as a people to ask what we can do for one another, rather than what we can do for our own self-interests.

This year, Congress will debate and eventually approve the new transportation bill. Lawmakers can choose to continue to deny the fact that automobiles and their product – sprawl – are the principal causes of the environmental disaster that lies ahead of us. They can continue to ignore the rapid deterioration of our infrastructure, sell it to private industrialists, and allow it to continue falling apart.

Or, our congresspeople can do something new, pushing for sustainable, environmentally-friendly mobility that encourages the kind of dense living that has been proven time and time again to be better for the health of the world’s ecosystems. Congress can choose to advance a massive reconstruction of our railways and roads and bridges that will secure our standing in the twenty-first century. It can choose to work on behalf of everyone, rather than just the wealthy few.

I hope that this week marks a turning point in American society, a recognition that somewhere, we went off course. Mr. Obama’s budget proposal represents a strong starting point. Now the rest of us need to get to work.

Categories
Finance President

How the Next Budget Stacks Up

Huge budget provides billions to transportation, but doesn’t appear to mark sea change in vision for U.S. mobility

The Obama administration has officially released its budget outline, which provides a summary of how the federal government will spend money in fiscal year 2010 (from July 2009 to July 2010). It also provided some information about how it intends to use its limited funds over the next 10 years. Here is what we know so far:

  • The bill will “increase” funding to public transit, focusing on public transportation’s environmental benefits,
  • It will provide $1 billion a year for at least five years for high-speed rail, above the $8 billion already authorized from the stimulus bill
  • It will form a national infrastructure bank, such as Mr. Obama proposed during the campaign, which will be funded by $5 billion in appropriations over the next 5 years

Note that the information we have right now is the preliminary budget outline. This means that it is not detailed since the final bill has yet to be written, and that the administration may choose to change certain aspects of the bill in consultation with members of the House and Senate. It will also of course have to be approved by the Congress to enter into the law.

The budget does promise increased funding for mass transit, something I’m excited to hear… but we’ll have to wait to see the official figures over the next few weeks. It is unclear whether discretionary funding for transit will increase over SAFETEA-LU-mandated levels, based on gas tax receipts. The budget’s inclusion of a 5-year fund for high-speed rail is a good sign, but unfortunately for the U.S. treasury, it’s going to cost a lot more than that to actually build fast train lines. In order to fund the future of intercity rail in the country, we’re going to have to keep asking for more funding on rail.

The table below summarizes transportation funding in Obama’s proposed budget with those in Clinton’s proposed 2000 budget, Bush’s proposed 2008 budget, and the actual expenditures by the U.S. government in fiscal year 2008. I’ll update the table on the transport politic as I receive more information about funding for transportation programs over the next few weeks.

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CLINTON
BUSH
BUSH/DEMS OBAMA
Proposed ’00
Proposed ’08
Actual ’08 Proposed ’10
Program $B
%DOT
$B %DOT $B %DOT $B %DOT
Highways $31.4 58.8% $39.6 59.1% $42.2 60.1% $ ? % ?
Amtrak $0.6 1.1% $0.8 1.2% $1.3 1.9% $ ? % ?
Rail Grants $0.0 0% $0.1 0.1% $0.0 0% $1.0 1.4 %
FTA $6.1 11.4% $9.4 14.0% $9.5 13.5% $ ? % ?
» Formula $4.9 9.2% $7.9 11.8% $7.8 11.1% $ ? % ?
» Capital $1.1 2.1% $1.4 2.1% $1.6 2.3% $ ? % ?
DOT Overall $53.4 $67.0 $70.2 $72.5
Categories
Congress President

Mr. Obama's Address to Congress Avoids Transportation Issues, but Mr. Jindal's Reaction Repeats GOP Vegas HSR Lie

Hints at broad interest in nation-building at home

Last night, President Barack Obama addressed the nation in a pseudo-State of the Union address in front of a joint session of Congress, with the Supreme Court and the Cabinet in attendance. His comments, meant to encourage the nation in this period of collective doldrums, were focused on energy, health care, and education, with a small element at the end focused on foreign affairs. In his 52-minute speech, he didn’t address how transportation is an integral element of the energy problem, but he did mention public transportation when talking about the stimulus bill:

“Over the next two years, this plan will save or create 3.5 million jobs.  More than 90% of these jobs will be in the private sector – jobs rebuilding our roads and bridges; constructing wind turbines and solar panels; laying broadband and expanding mass transit.”

That said, he did suggest that it was time for a new era of national planning:

“In the next few days, I will submit a budget to Congress.  So often, we have come to view these documents as simply numbers on a page or laundry lists of programs.  I see this document differently.  I see it as a vision for America – as a blueprint for our future….

“History reminds us that at every moment of economic upheaval and transformation, this nation has responded with bold action and big ideas.  In the midst of civil war, we laid railroad tracks from one coast to another that spurred commerce and industry.  From the turmoil of the Industrial Revolution came a system of public high schools that prepared our citizens for a new age.  In the wake of war and depression, the GI Bill sent a generation to college and created the largest middle-class in history.  And a twilight struggle for freedom led to a nation of highways, an American on the moon, and an explosion of technology that still shapes our world.”

There was no mention of high-speed rail here, but the overall impression is that he’s suggesting we need a national infrastructure project. The obvious candidate for such an investment is a fast railway network. We’ll see whether Mr. Obama replicates the advocacy he demonstrated for the mode in the stimulus in future spending bills.

That said, in his lackluster GOP response, Louisiana Governor Bobby Jindal didn’t have a problem mentioning high-speed rail:

“But Democratic leaders in Congress rejected this approach. Instead of trusting us to make wise decisions with our own money, they passed the largest government spending bill in history – with a price tag of more than $1 trillion with interest. While some of the projects in the bill make sense, their legislation is larded with wasteful spending. It includes $300 million to buy new cars for the government, $8 billion for high-speed rail projects, such as a ‘magnetic levitation’ line from Las Vegas to Disneyland, and $140 million for something called ‘volcano monitoring.’ Instead of monitoring volcanoes, what Congress should be monitoring is the eruption of spending in Washington, DC.”

I’ve pointed out in the past that this Republican line of thinking is not simply political spin on an issue… it is a lie. The bill includes no specific earmarks for a Las Vegas maglev line. While it is possible that the corridor will get some funding, it will be waiting in line along with other far more advanced projects in California, the Midwest, and the Southeast. Mr. Jindal’s line is embarrassing and repeats the Republican mistake of assuming that if a lie is repeated enough, it becomes true in the minds of the American people.

I think we’ll be seeing four more years of mindless Republican opposition to sensible transportation investments.

Categories
Congress Finance President

This Week in Washington: Budget FY 2010

The President will reveal his priorities for the next year in a Congressional address and in his budget proposal

Tonight, President Obama will speak to a joint session of Congress in a pseudo-State of the Union address. He will describe his legislative priorities for the year – in terms of health care, the environment, and potentially transportation issues.

The Overhead Wire suggests that the President’s proposed Livable Community initiative might provide increasing funds for streetcars and other forms of transit, but we haven’t heard much about that program so far. With the economy continuing its downward spiral, it seems likely that this won’t be high on the priority list and probably won’t be mentioned in the speech to Congress.

There have been a number of reports, however, that suggest that Mr. Obama will be working for the inclusion of at least $1 billion more for high-speed rail in the 2010 budget, and considering that this is on top of the $8 billion already included in the stimulus, the President might see fit to at least mention the issue tonight. We’ll see.

No matter what, though, on Thursday, Mr. Obama will unveil his proposed FY 2010 budget. No details on transportation issues have leaked yet, but we should expect to see more details on funding for Amtrak, high-speed rail, and transit.

Categories
Finance President

A Mileage Tax in Question

When cars are no longer powered by gas, who will pay for roads and transit?

Yesterday, an AP reporter asked White House press secretary Robert Gibbs if the Obama Administration was considering imposing a mileage tax to pay for transportation, claiming that Transportation Secretary Ray LaHood had come out in favor of the revenue generator in an interview. Mr. Gibbs immediately shot down the reporter, saying that the administration would not be advocating such a plan. But with high-mileage cars increasingly common, will the government find the funds to build roads and operate transit systems?

Currently, the vast majority of revenue for highway construction and transit subsidies comes from the gas tax, which is 18.4¢ per gallon. Many states add to that amount, increasing the tax to a maximum of 62.8¢ per gallon in California, though the nationwide average is 47¢ per gallon. (Diesel fees are slightly higher.) This system is based on two concepts: one, that people who drive should pay for the roads that they use; and two, that people who drive more efficient cars should be rewarded for their vehicle choice.

Gas tax revenues go directly to the Federal Highway Trust Fund, which was created in 1956 to fund the Interstate Highway System and which has three accounts: roads, transit (2.85¢/gallon), and underground gas storage (0.1¢/gallon). Last year, the fund ran out of money, forcing the U.S. Congress to allocate $8 billion to ensure adequate funding for projects already under construction; the fund is likely to run out of money once again this year, even though allocations from the fund are supposed to be based on the pay-as-you-go principle. Though the majority of money from the account goes to roads projects, the 1982 Surface Transportation Assistance Act added the small but important mass transit account.

The problem with the gas tax system is threefold: for one, it hasn’t changed since August 1993, meaning that its relative value has declined over time as inflation has taken its toll; second, people started driving less beginning last year; and third, as people drive more and more fuel efficient cars – and eventually electric ones – the fund will lose a large percentage of its revenue since people will not be buying as much gas as before. Mr. Gibbs’ quick response, then, doesn’t answer the United States’ long-term transportation-funding dilemma.

The mileage tax, which would require people to pay based on the numbers of miles driven, rather than based on the number of gallons consumed, should be given rightful consideration, as Secretary LaHood had indicated. It would be more feasible to implement than tolling devices all over the country and it would be fairer than using general funds from federal income tax revenues to pay for transportation, which not everyone uses equally.

At the moment, it may seem completely politically infeasible because it would intrude into the privacy of America’s drivers – it would require drivers to install a GPS devise to monitor their every movements. But, theoretically, a system could be created that blocks information about the driver’s location and simply records their total movement.

Without a new revenue source, our transportation dollars are likely to decline steadily over the next few years, and Mr. Gibbs’ glib rejection of the mileage tax seems less thought out than we should expect from an administration that claims to be concerned about the steadily increasing deficit. After all, if we don’t pay for transportation through a defined revenue source, and we don’t raise general taxes, we’re going to be paying for our roads by taking on debt.