Streetsblog San Francisco

"We know we don’t have the votes."

With those seven words last Thursday, Senate Majority Leader Harry Reid dashed hopes for a comprehensive climate bill. Prospects also dimmed for a transportation component in the final energy legislation that emerges from the Senate. Reid is expected to announce that plan later today.

Up until Reid's announcement, advocates for transportation reform had reason to believe the Senate bill might include some form of action to improve fuel efficiency, increase transit options, and encourage more sustainable land use patterns -- ideas drawn from the Oil Independence Bill introduced by Oregon Senator Jeff Merkley. The oil independence legislation contained elements of Delaware Senator Tom Carper's "CLEAN-TEA" bill, introduced in March 2009, which would have funded the planning and implementation of green transportation projects with revenues from a carbon emissions cap-and-trade system.

Instead, Reid indicated that his bill will likely contain language dealing only with the Gulf oil spill and some energy efficiency provisions.

"The package that Reid announced [Thursday] doesn’t address climate change at all,” said Colin Peppard, deputy director of federal transportation policy at the Natural Resources Defense Council. "What we were hearing from staff on the Senate side is that basically up until pretty close to Reid’s announcement, there was still consideration for pieces of the Merkley bill."

Reid’s announcement “took the entire environmental community off-guard,” said Stephanie Potts, a policy analyst with Smart Growth America.

While the Deepwater Horizon catastrophe became an emblem of the need to wean the nation off oil, it did not stiffen many spines in Congress. In fact, said Potts, the Gulf spill may have worked against a broader climate bill by narrowing the avenues for compromise and horsetrading. Without expanded offshore drilling as a bargaining chit, there were few lures to win the votes of some recalcitrant Senators, especially those from coastal states.

In the end, the globs of brown in the Gulf of Mexico didn't overcome the absence of will to raise revenues. "The biggest obstacle is lack of funding," said one source close to the legislation, who said some transportation component may still surface in the final bill. "[Reid's bill] has not been released. There are opportunities to effect influence on that legislation, that bill, via amendments."

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The fat lady hasn’t sung yet, but the country’s auto dealers have been exempted from the financial reform bill now in its final stage in Congress. Given that the purpose of the bill is to protect Americans from harmful manipulation by the people selling them financial products, this is a pretty stunning development. The nation’s auto dealers either provide or broker most of the $850 billion worth of currently outstanding car loans across America. That’s a pile of financial product: It’s more than household credit card debt and second only to home mortgages.

Every year, 50 million people buy a car, and 94 percent of those sales are loan-financed, to an average tune of over $28,000 for a new vehicle. At both new and used lots, a good number of those loans involve unethical and fraudulent practices. Like the mortgage industry, dealers have pushed credit and pricey products on people who couldn’t afford them, and then fudged paperwork to make it appear they could. They offered "zero interest and no money down" and extended loan terms from what was until recently an average of three or four years to seven and even eight years, leaving huge numbers of car owners "upside-down" on their loans -- which is to say, owing more than their car is worth.

More egregiously, their business innovations -- not advertised as such, of course -- include such activities as “power-booking” (reporting to lenders that a car is equipped with non-existent options, thereby raising the amount of the loan) and “yo-yo financing” (a form of bait and switch, in which car buyers leave a down payment or trade in their car, drive off the lot, and then are falsely told that the financing "fell through" and that they have to pay a higher interest rate, often under threat of repossession or arrest).

The list goes on. Dealers regularly get kickbacks and markups from other lenders. Car loans have been packaged and dangerously securitized, just like home mortgages. Dealers encouraged many car buyers to use home equity loans to make their purchases, obliterating whatever cushion they had when home prices plummeted. It’s a jungle on the lot for consumers, especially the poor and those with poor credit.

In a recent New Yorker article, James Surowiecki seeks to explain how the auto dealer exemption could have happened when it is so opposed to the public interest, and when powerful actors like Citibank and J. P. Morgan did not escape regulation. He sees it as mostly a public relations coup, with the dealers presenting themselves as Main Street plain folks, virtually victims of the financial system themselves. They also played up the number of jobs dealerships provide in communities across the nation (how those jobs would dry up if dealers had to make an honest living was not made clear).

But what wasn’t noted is the power of the car dealers over the press itself.

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With financial reform nearly complete, the Senate Banking Committee
turned its attention today to one of Senator Chris Dodd’s (D-CT) next
priorities, the Livable
Communities Act. Local government came out strong for the
initiative to promote sustainable and integrated regional planning, with
representatives of the nation’s cities, towns, counties, and regional
planning organizations testifying in favor. Among committee members,
concerns persisted about whether
the bill would disadvantage rural areas. 

The Livable Communities Act would
provide
about $4 billion in competitive grants to coordinate housing,
transportation, and economic development policy with an eye toward
promoting sustainable development. About $400 million would be slated
for planning with the remainder funding implementation. The bill would
also create a new office within the Department of Housing and Urban
Development to guide and administer the programs. If passed, it would
strengthen the Obama administration’s multi-agency Sustainable
Communities effort. 

At today’s committee hearing representatives of the National League
of Cities, the National Association of Counties, the National
Association of Development Organizations, and the National Association
of Regional Councils each strongly endorsed the goals of the bill. 

Witnesses drew on professional experience — from trying to
revitalize barren neighborhoods in Indianapolis to managing the growth
of a rural Maryland county — to explain how federal policy could spur
better development where they live. The Hartford region, for example, is
investing in a new bus rapid transit line, said Lyle Wray, the
executive director for the region’s Council of Governments, but they
haven’t been able to tie the transit project to broader goals. "Linking
that opportunity to affordable housing, jobs, and sustainability is what
the Livable Communities Act would allow us to do," he said.

Describing the bill today, Dodd stressed that integrated
transportation and land use planning can help address a host of
challenges: high foreclosure rates, climate change and oil dependency,
deteriorating infrastructure, traffic congestion, and the loss of
farmland. Those problems, Dodd argued, aren’t urban or rural. "One
community can use the grants to develop brownfields in a post-industrial
area," he said, and "another might create a livable town center or main
street." 

Even so, Senator Jon Tester (D-MT), expressed doubt about whether
his rural state would benefit under Dodd’s legislation.

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The AFL-CIO, a formidable lobbying force in Washington, is throwing
its weight behind a Senate bill offered
last week that would authorize $2 billion in emergency funding for
transit agencies forced to hike fares or cut service in lean budgetary
times.

"Unless the U.S. Senate passes" the transit
operating legislation, the union’s Mike Hall wrote in a Friday
blog post, "working families who count on public transportation
systems in
communities across the country will face even more severe fare
increases and service cuts and transit workers are looking at further
layoffs."

The president of the AFL-CIO’s Transportation Trades Department, Ed
Wytkind, also pushed for passage of the Senate bill in a National
Journal guest
blog post this morning. The Amalgamated Transit Union and the
Transport Workers Union, both AFL-CIO members, have aligned with Rev.
Jesse Jackson, environmental groups, and civil-rights advocates for a
campaign dubbed Save Our Ride that
seeks to stave off sweeping transit cuts in major cities.

The unions have several hurdles to clear before the transit funding
becomes available, however. The Senate legislation contains only
authorizing language, meaning that lawmakers must quickly follow with
"appropriating" language that technically disburses the operating money.

That two-step process would have been accomplished quickly by
attaching the transit aid to a larger bill that is considered
"must-pass" by Congress, such as the upcoming supplemental funding bill
for the wars in Iraq and Afghanistan. But Republican senators vowed
early on to oppose any attempt to add unrelated spending to that
measure, and the Senate passed
its version sans transit aid before adjourning for the Memorial Day
recess.

That leaves room for the AFL-CIO to generate momentum for another
vehicle to carry the transit funding — but given the resistance among
both House and Senate Democrats to any new spending not offset by cuts
elsewhere in the budget, the union may face an uphill battle this
summer.

While transport reform advocates hailed last week’s long-awaited Senate
climate bill for
directing an estimated $6 billion-plus towards local land use
planning and green infrastructure, state DOTs and construction interests
criticized the legislation — suggesting that the measure’s sponsors
could face stiff resistance from the transportation industry’s
mainstream despite making concessions to win over all sides.

The central complaint raised by
mainstream transport players boils down to, as American Association of
State Highway and Transportation Officials (AASHTO) executive director
John Horsley put it in
a statement, the Senate bill’s "preemption" of user-fee revenue
that historically has gone into the nation’s dwindling highway trust
fund.

"Congress can ill-afford to consider any legislation that" siphons
off money from the trust fund, which has required more than $30 billion
in replenishment from the general Treasury over the past 18 months,
Horsley said.

Stephen Sandherr, chief of the Associated General Contractors — a
backer of the
Senate effort to bar the Environmental Protection Agency (EPA) from
regulating greenhouse gas emissions in the absence of congressional
action — echoed that sentiment in his
own statement on the upper-chamber climate proposal.

"[B]y taking funds raised through the proposal’s new transportation
fees
and committing all but a small percentage to unrelated spending, the
legislation leaves our aging and inefficient roads, airways and transit
systems vastly underfunded," Sandherr said.

But does the Senate climate bill impose a user fee on
transportation fuel consumers? The text of the measure specifically
requires "each refined [fuel] product provider" to purchase emissions
permits from the EPA on a quarterly basis at a fixed price, with no
permit trading allowed. Horsley’s depiction of those charges as a "user
fee" relies on the considerable likelihood that oil companies and
refiners would pass on the cost of those emissions permits to consumers
in the form of higher gas prices.

In the meantime, how much of the revenue raised by the bill’s new
fuel permits would infrastructure receive?

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As Transportation Secretary Ray LaHood tangled with a senior GOP
senator today over the White House’s $500
million-plus request for its inter-agency office of sustainable
communities — a
new project aimed at channeling federal energy towards local
transit-oriented and smart growth plans — an influential Democrat
joined her fellow senator in raising questions about diverting highway
money to the effort.

Sen.
Patty Murray (D-WA), chairman of the upper chamber’s transportation
spending panel, praised the mission of the sustainability office but
told LaHood she has "concerns about" the Obama administration’s pitch to
send $200 million in Federal Highway Administration (FHWA) funding to
the effort next year.

"I also have questions about how these proposals from [U.S.] DOT
fit into our
larger debate over" paying for the next long-term federal
transportation bill, Murray said.

Murray’s measured assessment of the new alliance between LaHood,
Housing and Urban Development (HUD) Secretary Shaun Donovan, and the
Environmental Protection Agency (EPA) focused on how federal officials
would define the concept of "sustainability" as they determined how to
dole out grants to local development plans.

But her Republican counterpart on the spending panel, Sen. Kit Bond
(MO), took a harder line in challenging LaHood on the administration’s
ability to positively influence on-the-ground urban and rural planning.

"I’m not as confident [as others] that trusting federal
decision-makers in Washington to lead the process, to tell communities
how they should grow, is the right way to go," Bond said, tangling with
LaHood as he aligned with a road construction industry group that
criticized the administration’s sustainability budget.

Sending that $200 million from highways — about one-two-hundredth
of the FHWA’s annual budget — to the sustainable communities office
"may reflect a view that we want to get rid of auto transportation,"
Bond said.

Read more…

Transportation groups of all shapes and sizes have been
concerned that the Senate’s forthcoming climate bill could set back
the prospects for a federal transportation measure by imposing extra
carbon fees on Big Oil — which would then be passed on to
customers at the pump, effectively increasing the gas tax for purposes
other than funding new infrastructure projects.

But
it looks like there’s no need to worry. The Obama administration
yesterday gave a statement to the Wall
Street Journal that sought to lock down any attempt to associate
the Senate climate plan with higher fuel charges: “The Senators don’t
support a gas tax, and neither does the White House."

A spokesman for Sen. Lindsey Graham (R-SC), the climate proposal’s
sole GOP sponsor, also denied that the bill would include a gas tax. The
bulk of the back-and-forth is a semantic battle that reflects how
politically poisonous a gas tax increase remains for both parties in
Washington.

But it may also suggest that Graham and his co-authors are moving
away from the carbon fee they had originally conceived. Graham described
the idea to
The Hill last month as "an assessment on what they do in the carbon
world. They are creating a carbon product, they are going to pay a
fee." The cost of such a fee, he added at the time, would be partially
passed on to customers at the pump.

On the whole, the fact that the White House is already denying the
existence of a gas tax more than a week before the climate bill is set
to emerge may not bode well for its future (not to mention that of the still-stalled
six-year transportation legislation).

"So Much For Kerry-Graham-Lieberman Global Warming Gas Tax?" the
press office of Sen. Jim Inhofe (R-OK) tweeted.