The Future of a Long-Term Transportation Bill Bleakens

Ken Orski weighs in on a few worthy insights on the prospects for a long-term transportation bill passing Congress in the wake of the Obama Administration’s announcement of a $50 billion transportation intiative. Writing in Innovation Briefs (vol. 21, no. 20, September 16, 2010), Ken observes:

“Should the $50 billion be made an integral part of a multi-year transportation bill, the outlook becomes more promising. While little can be done to advance a long-term bill in the few weeks left before Congress adjourns for elections, the matter could be taken up in a lame duck session. Still, the odds of passing a complex piece of legislation in a lame duck session are small. Instead, Congress is likely to pass another six- or eight-month program extension (the current program authority expires on December 31). This time, however, there will be no need to vote more money since the Highway Trust Fund is projected to end FY 2010 with a healthy balance of $31.4 billion according to the latest Congressional Budget Office estimate. Indeed, the Trust Fund is projected to remain solvent for another two years, ending Fiscal Year 2012 with an estimated balance of $13.3 billion.

“What will happen in the next Congress can only be a matter of conjecture. Should the Republicans take control of the House—something that most political analysts and pollsters seem to take almost for granted— the pressure to reduce the budget deficit and reduce spending will increase. But with active support from the White House, a bipartisan agreement on a scaled-down program during the next session of Congress is conceivable. To be sure, a bill “front-loaded ” with an extra $50 billion — i.e. funded at $110.8 billion in FY 2011, which includes $60.8 billion in requested regular program funding — is out of the question. (“Anyone who thinks that is a credible sum of money must be smoking something,” one congressional source, who requested anonymity, told us.) A $500 billion six-year bill ($83 billion/year) as proposed by Rep. Jim Oberstar, may be equally unrealistic. But a more modest four-year bill, funded at an annual level of $60 billion/year (i.e. roughly, the level requested by the Administration for FY 2011) would cost a more manageable sum of $240 billion. With FY 2011-2014 tax revenues and interest expected to generate approximately $160 billion (CBO estimate), the annual shortfall would require a general revenue appropriation of only $20 billion/year.

“Substantively, a bill reported out of a Rep.John Mica (R-FL)-led committee would look very different from the bill that was authored by Rep. James Oberstar (D-MN) earlier this year. But many of the reforms suggested by the White House in its September 6 announcement — such as program consolidation, performance-driven investment decisions, an infrastructure bank, even inclusion of passenger rail — are not ideologically motivated and could find their way into a bipartisan bill.

Samuel R. Staley, Ph.D. is a senior research fellow at Reason Foundation and managing director of the DeVoe L. Moore Center at Florida State University in Tallahassee where he teaches graduate and undergraduate courses in urban planning, regulation, and urban economics. Prior to joining Florida State, Staley was director of urban growth and land-use policy for Reason Foundation where he helped establish its urban policy program in 1997.