Blog Skepticism Greets US DOT’s Draft Transportation Bill

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Innovation Briefs, now
in their 20th year of publication, are published by Ken Orski. Cascadia
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Discovery Institute.

May 6, 2011

An undated— and possibly still unvetted by OMB—draft of US DOT’s legislative proposal for surface transportation reauthorization, the “Transportation Opportunities Act,” has been making the rounds in Washington for the past week. Its publication, however, has been largely ignored by the inside-the-Beltway transportation community. What would ordinarily be an eagerly awaited event and an  occasion to compliment the Department , has passed virtually unnoticed. Even the usual cheering squad of Administration-supportive advocacy groups such as Transportation for America, the Building America’s Future coalition and US PIRG has been muted in their approval.

The reason for this indifference is twofold. Partly, it’s because the DOT draft contains no surprises: it merely restates the proposals already revealed in the President’s FY 2012 Budget request. But more importantly, the draft has been ignored because it has been judged to lack political savvy and realism. Even the highly partisan liberal Streetsblog was obliged to pronounce the draft bill as irrelevant. Wrote Tanya Snyder, its Capitol Hill correspondent in a level-headed assessment, “…don’t expect it to be central to the debate in Congress. By refusing to adjust to a still-struggling economy, high gas prices, and a deficit-obsessed Congress, the president has rendered his own plan moot.”

Snyder’s dismissive verdict is understandable. Consider the following:

Item: Multiple congressional spokesmen have stated in recent months that future surface transportation funding will be limited to the tax revenues deposited into the Highway Trust Fund. There will be no further rescue or “bailout” of the Trust Fund using general funds; “deficit funding is out of the question”; “government must learn to live within its means.” The House Transportation and Infrastructure Committee reaffirmed this position as recently as March 15 in its “Views and Estimates for Fiscal Year 2012” report. Yet the US DOT chose to ignore these unambiguous congressional signals. Its legislative draft has reaffirmed the initial White House proposal for a six-year surface transportation program totaling $556 billion, with an up-front FY 2012 appropriation of $50 billion. Meanwhile, transportation-related tax revenues are expected to average only $38 billion/year, for a six-year total of $230 billion according to the latest Congressional Budget Office estimates. In recent appropriation hearings on the FY 2012 transportation budget, Transportation Department officials failed to explain how the resulting shortfall of over $300 billion would be funded.

Item: In its draft bill, the US DOT has proposed to devote $53 billion over six-years to pursue a “high-speed” rail program that would eventually (in 25 years) give 80 percent of Americans access to high-speed rail service. Yet Congress has rescinded all of FY 2011 funding for the high-speed rail program and House Republican leadership has announced its intention to totally eliminate support for high-speed rail beginning next year. Even if a modest passenger rail program should survive, it is likely to be focused on the Northeast Corridor, as Rep. Mica has strongly suggested, and not pursue a quixotic multi-billion dollar national “high-speed” rail vision as conceived and advocated by the White House.

Item: In its draft bill, the US DOT has proposed to expand the existing Highway Trust Fund into a successor “Transportation Trust Fund.” The expanded Fund would include four accounts – for Passenger Rail, Highways, Transit and an Infrastructure Fund. To fund the two new accounts plus the expanded Highway and Transit accounts, the Transportation Department has proposed an unspecified new “energy tax” to supplement the existing sources of revenue (i.e. transportation-related taxes on fuel, heavy trucks and tires). However, the initiative for any new tax measures must originate with the House Ways and Means Committee. With the House Republicans on record as opposed to any new taxes, and with bipartisan desire not to increase the consumers’ cost of energy, any proposed “energy tax” has virtually zero chance of success in the 112th Congress. (Note: it’s not even certain whether the energy tax proposal would survive OMB review).

Item: The US DOT has proposed a three-part “Livability” program totaling $27.5 billion over six years. The program would subsume existing formula-based transportation enhancement activities and include a program of discretionary grants for bicycle, pedestrian and capacity building activities. However, the ill-defined “livability” concept has met with profound skepticism on the part of House Republicans. Congressional sources have made it known that a “livability” program is unlikely to be a part of any future surface transportation bill.

Item: The US DOT has proposed a “National Infrastructure Innovation and Finance Fund” to finance transportation infrastructure projects of national and regional significance through grants, loans, loan guarantees and lines of credit. The Fund, administered by a heavily bureaucratized structure  (executive director, nine-member Investment Council, Advisory Committee)  would receive $30 billion over six years. This proposal, also know as the National Infrastructure Bank,  faces considerable bipartisan skepticism and overt opposition by several influential House and Senate leaders. Its chances of passage are rated at less than 50-50.

In sum, the unreality of its fiscal ambitions and the lack of political support for its key programmatic initiatives has rendered the DOT’s legislative proposal “dead on arrival” in the judgment of congressional observers. That is not to say that the proposal deserves to be totally ignored. Many of its programmatic provisions – for example, those dealing with accelerated project delivery, tolling, highway and motor vehicle safety, “state of good repair” policy, pursuit of  VMT fees, performance management  and freight policy–are worthy of consideration and will likely find their way into the final bill.

However, the Washington policy establishment is largely ignoring what it considers a stubborn refusal by the drafters of the US DOT bill to face the facts and adjust to political realities.  Instead, transportation stakeholders are awaiting the release (probably in late June) of the House Transportation and Infrastructure Committee bill that will more correctly reflect the mood of the Congress,  the stakeholders and of the country.  It is safe to conclude that what is likely to emerge from that committee — and eventually approved by the full House and the Senate– will bear little resemblance to the U.S. Transportation Department’s  unrealistic draft legislative proposal.