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President Obama Proposes Major Funding Increases, Reorganization for Nation’s Transport

In the president’s proposed Fiscal Year 2012 budget, transportation spending increased significantly even as appropriations for most other programs are reduced. Yet GOP opposition in the House of Representatives, focused on cutting government investment, will pose a major obstacle.

February 14, 2011

Today, the White House Office of Management and Budget released the President’s proposed FY 2012 budget, announcing a major increase in funding for the nation’s transportation infrastructure, both this year and over the next six.

The President, if his wishes are endorsed by the Congress, would increase federal support for transportation to $128 billion in 2012, compared to $77 billion in 2010. The Administration will begin pushing for a $556 billion six-year transportation bill, almost d0ubling what was approved in SAFETEA-LU, the last — and now expired — piece of transportation legislation. Though the White House has yet to demonstrate where it would find the funding to support these measures, the President has argued that any increased spending be compensated through reduced spending elsewhere or revenue increases.

Funding would apparently come from a “bipartisan financing for the transportation trust fund,” though no such agreement on what that means yet exists.

The budget justifies the $50 billion year-on-year increase by arguing that joblessness remains a significant problem for the nation as a whole. The transportation spending, the Administration has argued, would pave the way towards giving thousands of unemployed people new jobs.

Though the Administration would increase funding for roads construction from $41 billion in the previous budget to $70 billion, that increase is dwarfed in percentage by proposed spending on transit, which would more than double from $8 billion annually currently to $22 billion. Over six years, spending on capital improvements for public transportation would add up to $119 billion. Some reorganization of the Department of Transportation would occur, as 55 overlapping highway grant programs would be morphed into just five, easing accountability and management.

In addition, the White House has endorsed a major increase in spending for its controversial livability program, and a $4.1 billion competitive grant mechanism would be established to fund projects that aid in the construction of such improvements as streetcars, busways, bike paths, and sidewalks.

An infrastructure bank, which would fund meritorious programs through a competitive process, remains on the president’s agenda after having proposed it two years in a row without much of a response from the Congress. This “I-Bank,” as the Administration is now referring to it, would receive $30 billion in start-up funds to begin providing grants. At the same time, $32 billion in funds for a state-based competitive grant program would be distributed by the DOT. The aims that each of these programs would be supporting have yet to be put forth by anyone in the Administration.

The release of the budget comes a week after the White House revealed that it would be pushing a 6-year, $53 billion plan to expand the nation’s high-speed rail network. The 2012 budget would include $8 billion for the proposal and merge existing Amtrak subsidies into the intercity rail program. This implies that the national rail carrier will have to begin competing with other groups, including private corporations, to offer services on corridors which the Federal Railroad Administration or states are upgrading.

The Administration’s chief priorities for this year will be in capital construction projects. President Obama made explicit today his feeling that “infrastructure is what we need to win the future.” And indeed, the FY 2012 budget would represent one of the most ambitious steps forward in financing for transportation in decades — and it reinforces the Administration’s demonstrated support for alternative modes of transportation, including pedestrian, bicycling, transit, and intercity rail modes. In this budget, President Obama is making clear that even in the face of austerity, he is interested in improving the nation’s transport systems.

The President’s budget, however, is only a suggestion: It is up to the Congress to ultimately determine how revenues are collected and how spending is distributed. In that context, the House Republican caucus’ adamant opposition to increased spending on infrastructure will make passing anything remotely familiar to Mr. Obama’s proposal extremely difficult. The House GOP is already planning to strip funding from high-speed rail and other transportation projects in FY 2011. With the right-wing party convinced that it has a winning electoral position in its opposition to transit, and especially high-speed rail, can Democrats force through an FY 2012 budget and a transportation bill that prioritizes them?

Perhaps even more complicated is the fact that House Transportation and Infrastructure Chairman John Mica (R-FL) and Senate Environment and Public Works Committee Chairwoman Barbara Boxer (D-CA) say that they have already begun work on a transportation reauthorization bill. Meanwhile, Senate Committee on Commerce, Science, and Transportation Chairman Jay Rockefeller (D-WV) introduced last week a bill that would “establish a clear set of goals and objectives for the Department of Transportation.” Is there any evidence that these Congressional proposals look anything like what the president has suggested?

These questions remain without answers. The future for American transportation investment remains murky.

 

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