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Prospectus Blog A Few Questions Concerning the President’s FY 2012 Budget Submission on Transportation

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Thumbnail image for Thumbnail image for Ken-Orski-Headshot.pngFebruary 16, 2011

The President’s FY 2012 Budget submission on transportaton has raised more questions than has offered answers.  The President said he will make sure that his transportation program will be “fully paid for” and pledged to work with Congress to ensure that funding for surface transportation will not increase the deficit. But  these  vague expressions of intent are hardly appropriate in a Budget message which traditionally was meant to offer Congress and the public concrete explanations on how  the Administration intends to fund its proposed program initiatives.
 
Here are a few questions that beg for more specific answers. Since the Republican House leadership has already announced its intent  to limit the future surface transportation budget authority to tax revenues deposited into the Highway Trust Fund,  where will the additional  money come from to fund the proposed FY 2012  surface transportation program of $107 billion  or the six-year surface transportation bill amounting to $556 billion? The tax revenues generated by the gas tax are estimated to total  $36.8 billion in FY 2012 and $230 billion over the next six years according to the latest projections of the Congressional Budget Office. How does the President propose to bridge the $70 billion funding shortfall in FY 2012 and the $326 billion shortfall over the life of the next reauthorization?
 
The President has proposed a Passenger Rail account to be added to a new unified Transportation Trust Fund. What will be the source of revenue for the Passenger Rail account? Will it be a tax on rail tickets? And what will be the source of funds for the proposed $30 billion National Infrastructure Bank. Again, the President’s Budget is silent on it. 


Finally, has the Administration thought through the idea and the politics of a unified Transportation Trust Fund? Who will make the allocation decisions as between highways, transit,  Amtrak, high-speed rail,  “livable communities” grants, “Transportation Leadership Awards,” and other Administration priorities? What criteria will be used to make those  subjective and often controversial decisions?  Who will adjudicate conflicting and competing priorities between the different modes? Will Congress have any say in these decisions and in the selection of investments by  the Infrastructure Bank?
 
Has the Administration consulted with the transportation industry stakeholders on this issue? Apparently not. As Stephen E. Sandherr, CEO of the Associated General Contractors of America, said, “it is hard to take this proposal seriously when the administration has yet to identify how it will pay for the other programs it wants to add to the Trust Fund.” Added Bill Graves, President of the American Trucking Association: “This proposal purports to carve up already scarce federal dollars across even more modes.” “Utterly out of touch with reality,” was the reaction of yet another senior association executive.
 
These are just a few comments and questions that have been left unanswered in the President’s Budget proposal — questions to which Congress has a right to demand specific, unambiguous answers.  

Innovation Briefs, now in their 20th year of publication, are published by Ken Orski. Cascadia Prospectus reprints them with permission. The content of Innovation Briefs does not necessarily represent the views of Cascadia Center of Discovery Institute.