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New Year, Same Old Transportation Budget from the White House

Baruch Feigenbaum
April 12, 2013, 6:00am

President Obama has released his 2014 transportation budget. It includes much the same nonsense as his 2010, 2011, 2012 and 2013 budgets. And since Congress is no more likely to approve the projects for 2014, it is just as pointless. 

Let’s detail the old proposals in the new budget: 

$50 billion in stimulus spending: In February 2011, September 2011, and February 2012, the President requested $50 billion in one-time stimulus spending. None of these three previous proposals ever made it out of a committee. Republicans have promised the fourth time will be no different. 

Transportation Trust Fund: In FY 2012 and FY 2013 the budgets proposed to convert the Highway Trust Fund into a Transportation Trust Fund. Why? The President wanted to transition Amtrak and high-speed rail funding into mandatory trust funds so that they would be exempted from discretionary funding caps. The problem is that the gas tax, which supports the trust fund is intended for highway use only since it is paid for by drivers and bus users. And this same gas tax is going broke; before MAP-21’s gimmicky accounting rules provided a temporary fix, the highway trust fund needed 10 bailouts from the general fund. What is the solution for an account going bankrupt in part because it funds activities it was never designed to support? In Washington, the answer is to add new activities but not the revenue to pay for them. For this reason, Congress clearly rejected this approach when it passed MAP-21. Yet less than a year after MAP-21 was signed, the President wants to undo this change and increase funding by $2.7 billion for Amtrak and $3.7 billion for high-speed rail. 

Increasing the statutory cap on passenger facility charges: In the FY 2012 and FY 2013 budget the President wanted to increase the statutory cap on passenger facility charges at the largest airports in exchange for removing these airports from the Airport Program grants. However, in the 2012 FAA reauthorization law Congress rejected this approach and did not change the funding level. This reauthorization locks in existing levels until 2015. This is actually a very good idea that would save several hundred million dollars and I must give credit to the White House for proposing it. But just because a new policy is a good idea that does not justify discarding current law in the middle of a long-term authorization. And just how Congress would implement this is a mystery. 

In his FY 2010, 2011, 2012 and 2013 budgets the president proposed creation of a national infrastructure bank. While the exact details changed, the proposal never went anywhere in Congress. The 2014 national infrastructure bank would use $10 billion in seed money to finance transportation, water and energy projects. There is no reason that the transportation projects could not rely on TIFIA. Congress substantially increased the funding of TIFIA in lieu of an infrastructure bank in MAP-21. And while loans are important, the White House has not articulated why it needs an infrastructure bank. 

The White House proposal includes a few elements that are more realistic such as pipeline user safety fees and the relocation of the Research and Innovative Technology Administration from its own administration to the Office of the Secretary of Transportation. Further, the funding proposals for Surface Transportation are more realistic than in the past. (Although the targets for the FAA remain completely unrealistic.) But too many of the proposals are completely unrealistic. 

But the White House has knowledgeable transportation experts (Not Ray LaHood) who know this budget proposal is completely unrealistic, so what is really going on? The budget has always been a political document more about setting priorities than offering a real outline forward. But President Obama’s transportation budgets have taken politics to a level never before seen. The White House’s goal is to build support behind these changes for the next transportation reauthorization whether it is the Surface Reauthorization in 2014 or 2015 or the Aviation reauthorization which may not occur until after the President leaves office. The budget has become completely political. 

Transportation in Washington D.C. has become almost all about building coalitions and scoring political points; there is very little focus on solving actual real world problems. Despite passage of long-range Surface and Aviation transportation bills, U.S. transportation policy is at a crossroads. A new funding source to supplement or replace the declining fuel tax and removal of waste in the transportation budget remains a priority. After four long years the administration has finally admitted that public-private partnerships are a critical part to solving the transportation problem. I had my own unrealistic hopes that this White House might get serious about fixing our transportation problems. But I should have realized that the President’s main use for transportation is politics. In reality this administration cares very little about actual transportation policy.


Baruch Feigenbaum is Transportation Policy Analyst


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