More on the President’s 2013 Transportation Budget–Totally Politics and Mostly Irrelevant

The Office of Management and Budget released the President’s 2013 budget for the Department of Transportation. Due to new agreements for Aviation and the President’s desire to adopt the Senate transportation bill, parts of his proposal were irrelevant as soon as the document was released.

My colleague Adrian Moore summarized the budget here. Ken Orski of Innovation Briefs also discussed the document. I want to take an in-depth look at the budget and highlight the worse parts.

The proposal increases funding for the highways account to $41.8 billion in 2013, an increase over 2012’s $39.1 billion but less than $42.2 billion proposed by the Senate. The proposed funding for the Federal Aviation Administration totals $16.1 billion. This is $196 million more than 2012 and $326 million more than the new long-term aviation bill. The budget requests $10.8 billion for the Federal Transit Administration, an increase of $233 million over 2012. Because of account restructuring, the actual increase to transit may be closer to $300 million. A total of $2.7 billion will go to the Federal Railroad Administration. Of the total, $2.5 billion will fund Amtrak and High-speed rail. This is more than a billion dollar increase from 2012. Will this administration ever face the reality that high-speed rail is not going to be built anytime soon? The bill also includes $580 million from the federal Motor Carrier Safety Administration and $981 million for the National Highway Traffic Safety Administration, $276 million for the Pipeline and Hazardous Materials Safety Administration, and $344 million for the Maritime Administration. The Office of the Secretary again proposed $500 million for the TIGER style discretionary grants. The full transportation proposal is available on the Office of Management and Budget website here.

This transportation part of the budget proposal has several major problems:

1) Parts of it are already moot. The House and Senate have agreed on a new aviation bill that the President signed yesterday. The Senate has proposed a new transportation bill that the President intends to support. As a result, the highway, aviation, and transit parts are irrelevant.

2) The President’s plan ignores the failure of the Super Committee. The failure of the committee lowers the budget cap from $1.05 trillion to $958 billion. The President’s plan assumes this cap will be tossed aside.

3) The budget reclassifies high-speed rail, Amtrak funds and new subway and light-rail projects as mandatory. Previously these programs were discretionary. What does this mean? “Mandatory funding” operates under different budgetary rules. The President can include large funding increases for mandatory programs that he cannot include for discretionary programs.

4) A $50 million national infrastructure bank is included (again). The President has cajoled Congress into passing this proposal. Congress has been studying the issue since 2009. At least three bills have been proposed and subsequently died in the Senate. An infrastructure bank is a good idea in theory. However, the U.S. already has an infrastructure bank called TIFIA. The recently passed Senate bill increases TIFIA funding to $1 billion. The President’s proposal is not a bank but rather a discretionary grant program. The White House already has discretionary grant programs, including TIGER. Another grant program is not needed and only figures to increase politically motivated discretionary grants. (My colleague Robert Poole previously discussed the problems with creating a good infrastructure bank here.)

5) The President’s proposal has no funding plan. It is easy to dream of grandiose solutions but without funding they are just dreams. Both the House and Senate bills have funding issues. The House bill relies on unrealistic revenue from oil and gas leasing. The Senate bill has a large funding hole. However, at least both the House and the Senate have attempted to find revenue and explore different revenue sources. What revenue sources is the president considering? Will he consider a vehicle-miles-travel fee? No. Is he willing to cut non-motorized transportation that benefit only local interests from the bill? No. Will he cut local transit? No. Will he cut high-speed rail funding or the TIGER Grants Program? No, and No.

6) It is a campaign document. Budget documents are always somewhat unrealistic. The past three Presidents have used even year budgets to promote their policies. Presidents limited to proposing legislation, not passing it. The 2013 budget is intended to please his base. However, past transportation proposals have included sensible programs with a realistic sense of passage.

Perhaps it was too much to expect this President to make transportation a priority. When SAFETEA-LU the last long-term transportation bill expired in 2009, the President did not place a high priority on enacting a new bill. Over the last two and half years he has been content to create the political TIGER Grant Program while his Secretary LaHood focuses on distracted driving. This budget is exactly what we should have expected from the White House.