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Posts from the 2009 Transportation Bill Category

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Wall Street Bailout Money For Infrastructure? Maybe Not

President Obama will deliver a speech on job creation this morning in Washington, but one tactic that has won over quite a few
Democrats of late — redirecting unspent money from last year’s
financial bailout to transportation — may not be as possible as
lawmakers had thought.

House economic adviser Larry Summers promised earlier this year that
bailout money would not be used on "an industrial policy." (Photo: WEF via Flickr)

The Wall Street Journal has the story,
including a rundown of the factors that could curtail the Obama
administration’s latitude to spend bailout funds on infrastructure:

An issue for the president is that the original TARP legislation
mentions job creation only twice, and both references refer to
stabilizing the nation’s financial system, said Steve Ellis, vice
president of Taxpayers for Common Sense, a watchdog group. The Treasury
secretary is given some latitude in using the funds, but the
legislation states he "shall take into consideration" first "the
interests of taxpayers by maximizing overall returns and minimizing the
impact on the national debt," the law states.

Second, the secretary is to use the funds for "providing stability
and preventing disruption to financial markets in order to limit the
impact on the American economy and protect American jobs, savings, and
retirement security." …

Lawmakers may be able to tap more than $100 billion in unspent TARP
money, but that too is complicated. Because TARP was created primarily
for lending, lawmakers could use only a fraction of the available funds
for projects that will not give the money back, such as aid to states
and spending on infrastructure.

The inability to pay for new transit, bridge, road and rail projects with repaid bailout funds, which are coming in at an unexpectedly rapid clip, does not mean that Congress is any less likely to make transportation part of its jobs bill.

fact, significant infrastructure investment may be more likely to win
GOP votes if congressional leaders change course and look beyond the
bailout for spending offsets. The Wall Street rescue bill, pushed
through during the waning weeks of the Bush White House and continued
under Obama, "is not supposed to be a piggy bank for members of
Congress," Sen. Judd Gregg (R-NH) said yesterday.

next question on tap, then, is whether Democrats should pursue other
avenues to pay for its jobs bill or begin persuading the fiscal
conservatives in their party that more deficit spending is in order. No
matter what happens, a strong speech by Obama today is the first step
in herding the cats.

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Rendell: National Infrastructure Bank Could Move as Part of New Jobs Bill

Pennsylvania Gov. Ed Rendell (D), who is in Washington today continuing his push for a "front-loaded"
federal transportation bill, told Streetsblog Capitol Hill that he sees
momentum building for a National Infrastructure Bank (NIB) to be
created as part of the jobs bill now moving forward in Congress.

20080113rad_rendell_330.jpgGov. Ed Rendell (D-PA) (Photo: Post-Gazette)

Rendell, who co-chairs the infrastructure advocacy group Building America’s Future
with New York City Mayor Michael Bloomberg (I) and California Gov.
Arnold Schwarzenegger (R), has proposed seeding a new NIB using part of
a short-term loan from the federal Treasury to the nation’s highway
trust fund — the meat of the "front-loading" concept.

original stimulus bill had decent infrastructure spending," Rendell
said in an interview. "It probably should have had more."

The Pennsylvanian, who is bidding
for his state to become only the third in America to add tolls to an
existing interstate highway, described a "front-loaded" transport
spending bill as a means to create jobs quickly while giving Congress
time to reach an agreement on long-term infrastructure reform after the
2010 midterms.

Approving a loan from the federal
government’s general fund to the highway trust fund would ensure that
"the tough political decisions involved in" debating a new six-year
transportation bill don’t slow the pace of job creation, Rendell said.

His pitch would involve postponing the "guts of reform" — for example, progress on national performance targets for transport and more flexibility
for states to spend highway money on transit — for 12 months, at which
point lawmakers would be called upon to resolve the nation’s
transportation funding gap in order to pass a new bill that repays the
Treasury’s loan.

The design of a new NIB, which the Obama
administration strongly supports, is a key issue for Rendell. The bill
introduced in June by House transportation committee chairman Jim
Oberstar (D-MN) would make an NIB part of the U.S. DOT and set up an
Office of Public Benefit within the Federal Highway Administration to
monitor the terms of any public-private partnerships.

expressed concerns that such a setup would limit the NIB’s independence
and subject it to excessive political scrutiny. His preferred method
would be setting up an independent board to manage the NIB, as envisioned in legislation offered by Connecticut Rep. Rosa DeLauro (D) and Sen. Chris Dodd (D).

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Streetsblog Capitol Hill Q&A: Blumenauer Talks Economic Recovery

On the issue of clean transportation, from transit to bike paths to
clean water, few members of Congress are as knowledgeable or active as
Rep. Earl Blumenauer (D-OR). Chief of the Congressional Bicycle Caucus
and founder of the new Livable Communities Task Force,
the Portland lawmaker is on the front lines of Washington’s biggest
infrastructure debates. Streetsblog Capitol Hill spoke with him
yesterday about the prospects for transportation in the coming jobs
bill, which he has said could be paid for in part with Wall Street bailout money. Below is a lightly edited transcript of the discussion.

2494173073_f0615b70c6.jpgRep. Earl Blumenauer (D-OR) (Photo: CAP via Flickr)

SCH: There is a growing focus
on Capitol Hill on new infrastructure investments as part of a jobs
bill that moves separately from the six-year transportation bill. What
are your thoughts on the merits of moving on new spending versus a
broader long-term bill?

EB: There is a terrific
and very important complementary opportunity. Make no mistake, we need
to have a six-year blueprint for how we rebuild and renew America for
transportation. We’ve got a lot of work that has been done for last
two-and-a-half years by the transportation committee; they’re in the
home stretch. Literally, in a month, they could have a finalized
version [of a six-year federal bill] and work it through with the
administration, send it over to the Senate.

That’s not to
say we shouldn’t be looking for opportunties to put people to work
tomorrow, and the two are not by any stretch of the imagination
mutually exclusive. We have so many transit agencies with deferred
maintenance [needs], so many bridges that are functionally obsolete or

I recently finished a conversation with Gov.
[Ed] Rendell [D-PA], and the opportunities in his state are amazing.
Lieutenant Gov. Dick Ravitch in New York, he’s got literally billions
of dollars of things that need to be done. I’d be prepared to argue
that we should go ahead with a big, comprehensive transportation bill,
but there’s no reason we cannot put money out the door, literally
within weeks, that can put tens of thousands of people to work in
virtually every state in the union within a matter of months. Done
right, the [two bills] will complement each other.

Clearly speed is a big concern, given that the goal is to put people to
work quickly on projects. But we saw a lot of, for example, paving
projects funded by the stimulus that may have created jobs but didn’t
address larger problems with crumbling infrastructure. To what extent
should the quality of transportation projects, and the need for a "fix-it-first" requirement, be a factor?

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LaHood to Congress: It’s Time to Talk About a Gas Tax Increase

As Congress maneuvers to end the political impasse over the next
long-term national transportation bill, lawmakers going to have to
debate an increase in the federal gas tax, Transportation Secretary Ray
LaHood said today.

Trans_Secretary_Ray_LaHood_Discusses_Cash_Jx_HxR08cPwl.jpgTransportation Secretary Ray LaHood (Photo: Getty Images)

In his remarks at a Fort Worth transportation meeting, first reported by the local Star-Telegram, LaHood stopped far short of reversing the White House’s stated opposition to raising the federal gas tax, which has remained at 18.3 cents per gallon since 1993.

LaHood appeared to edge the door open to a solution to the nation’s
transportation funding crisis — provided that lawmakers swallow their
re-election concerns and acknowledge that the current gas tax is no longer raising enough money to run an effective system.

Here’s what LaHood said today (emphasis mine):

To index the federal fuel tax [to inflation], that’s something Congress is going to
have to decide. As we get into the reauthorization bill, the debate
will be how we fund all the things we want to do. You can raise a lot
of money with tolling. Another means of funding can be the
infrastructural bank. You can sell bonds and set aside money for big
projects, multi-billion-dollar projects. Another way is [charging motorists for] vehicle miles traveled. The idea of indexing the
taxes that are collected at the gas pump is something I believe
Congress will debate.
When the gas tax was raised in 1992 or 1993, in
the Clinton administration, there was a big debate whether it should be
indexed. At that time, they thought there’d be a sufficient amount of
money collected. Now we know that isn’t the case. That is one way to
keep up with the decline in driving, and more fuel-efficient cars.

Another fact not mentioned by LaHood: Transportation construction inflation has increased at a rate twice as high [PDF]
as the Consumer Price Index, the Labor Department’s traditional method
of measuring price hikes for household goods. That means that raising
the federal gas tax to appropriately reflect the cost of infrastructure
improvements would be even more challenging than many in Washington now

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Three GOP Senators Ask Reid to Call Up Six-Month Transport Bill Extension

The senior Republicans on three of the Senate's four infrastructure-centric committees today signed onto a letter asking the leaders of Congress' upper chamber to call up a six-month extension of the 2005 transportation law.

Sen_Barbara_Boxer_D_CA_1.jpgSenate environment chairman Barbara Boxer (D-CA) (Photo: Politics Now)

In the letter, Sens. Jim Inhofe (OK), Kay Bailey Hutchison (TX), and Richard Shelby (AL) ask both parties' leaders to overcome the objections of a "small number of senators" who prevented quick passage of a six-month extension in September -- citing their opposition to using unspent financial bailout money to keep transportation programs running.

The three Republicans were joined by their Democratic counterparts: Environment committee chairman Barbara Boxer (CA), Commerce Committee chairman Jay Rockefeller (WV), and Banking Committee chairman Chris Dodd (CT). Senate Finance Committee Chairman Max Baucus also signed the letter, but the Finance panel's chief Republican, Sen. Chuck Grassley (IA), did not attach his name.

A call to Grassley's office about his stance on a six-month extension of current transportation law was not immediately returned.

The political climate surrounding infrastructure investment, roiled in recent days by Democrats' new determination to pass job-creation legislation before the end of the year, remains highly uncertain. But the senators' letter signals that any new transportation spending is likely to be distributed using the same funding framework used in the 2005 bill, rather than through any revamped policy that might put roads and transit projects on a more equal footing.

The reason, simply put: If a six-month extension wins approval before the current stopgap transportation measure expires on December 18, a 2010 jobs bill could well be on its way to the president's desk by the time any broad reforms would reach the top of the congressional agenda.

However, the fate of any extra infrastructure spending was not mentioned in the senators' letter, which emphasized the importance of providing a steady funding stream that would "give states the certainty they need to plan and contract for" road as well as transit and bike infrastructure projects. A cancellation of contract authority triggered by the congressional inaction forced cuts to clean transportation budgets in more than 45 states.

Check out a complete copy of today's letter after the jump.

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Introducing the Samuelson Gas Tax Increase: A Penny Every Month

Democratic lawmakers are discussing the possibility of a one-year
stopgap transportation bill but have yet to reach consensus on how to
pay for the measure, Sen. Tom Carper (D-DE) said today.

carper.jpgSen. Tom Carper (D-DE) (Photo: Politics Daily)

speaking at a National Journal policy conference, said the prospects
for short-term transport legislation still depend on finding a workable
funding source. He mentioned an idea first floated last year by economist and Washington Post columnist Robert Samuelson: increase the fuel tax by one penny every month.

a gradual increase, Samuelson wrote, would send a price signal in favor
of fuel efficiency. Carper acknowledged that his colleagues didn’t
immediately warm to Samuelson’s revenue-raising idea, but he also
hinted that another economic stimulus measure paid for by deficit
spending could be a non-starter in the Senate.

"Are we going
to have another stimulus bill? I sure hope not, because it means we’re
in the tank again," Carper said, pointing to recent signs of an economic turnaround.

Carper, the lead sponsor of a proposal to give clean transportation 10 percent of money generated by a future climate change bill, also addressed rising pessimism about Congress’ ability to pass carbon emissions limits before next year’s midterm elections.

a health care reform bill that’s fully paid for, Carper said, would go
a long way towards bolstering the prospects for climate legislation by
demonstrating lawmakers’ commitment to fiscal rectitude.

Carper’s remarks were followed by a panel discussion that featured Polly Trottenberg, assistant U.S. transportation secretary for policy, and James Corless, director of Transportation for America.

Trottenberg and Corless emphasized the importance of messaging in
encouraging public acceptance of infrastructure policy reforms. Asked
about decreasing the nation’s total vehicle miles traveled by telling
Americans to "drive less," Corless re-framed the question as one of
providing more transport options.

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‘The Concrete is Cracking’: Front-Loaded New Transport Bill Gains Steam

With the U.S. unemployment rate hitting 10.2 percent today, its highest level in 26 years, a palpable shift is occurring on Capitol Hill.

20070102_oberstar_2.jpgHouse transportation chairman Jim Oberstar (D-MN) (Photo: STLToday)

For weeks, we’ve heard senior Democrats and the transit industry
make the case for more transportation spending as a potent job creator,
but the lack of funding for a full six-year bill has kept the
conversation stalled.

But two things have happened in the week since Senate Majority Whip Dick Durbin (D-IL) floated the idea of a "front-loaded" infrastructure plan that would concentrate investment in the first two years:

  • The defeat of two Democratic candidates in Tuesday’s off-year elections reinforced that job creation and economic worries are the No. 1 concerns for voters.
  • Gross domestic product may be rebounding, but unemployment decidedly is not.

adds up to renewed interest in fast-tracking a new transportation bill,
perhaps with a two-year window. As House transport committee chairman
Jim Oberstar (D-MN) told David Rogers of Politico, "The concrete is cracking."

But even if the White House is prepared to abandon its insistence
on an 18-month extension of current law, how to pay for new
transportation legislation remains a very open question. House Majority
Whip James Clyburn (D-SC), for his part, told Rogers that he likes the
sound of Rep. Pete DeFazio’s (D-OR) proposed tax on Wall Street oil speculators:

are some painless ways to fund the highway bill. Transaction taxes,
that’s a painless way … Where are the shared contributions to all
this? If you’re sitting
there on Wall Street, if you’re Goldman Sachs, if you’re making all
this money, if you got all this federal money [in a] bailout, and you
are paying all these big bonuses to your folks, where is your
contribution to this recovery? That’s why it’s painless.

Clyburn’s reference to the "highway" bill brings up another lingering
mystery about the type of transportation spending being envisioned by
senior Democrats. If the White House does agree to support a new
infrastructure bill after health care is finished, will it include
policy changes or just new money?

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Inhofe Blasts Transport Bill Inaction That Comes From His Own Party

The Senate environment committee’s senior Republican, Jim Inhofe (OK), delivered
a stern warning today to any lawmakers who would force another
short-term extension of federal transportation programs, which are set to expire at midnight Saturday.

medium.htmSen. Jim Inhofe (R-OK) (Photo: NewsOK)

have bridges in Oklahoma that are crumbling and falling down. People
could be hurt," Inhofe told a talk radio station in his home state, as reported
by the local Associated Press. "We have to do this. … Any government
that can spend $700 billion to bail out banks shouldn’t be having the
problems that we’re having."

Oklahoma is far from the only state that faces urgent problems
caused by decaying infrastructure. A commercially vital bridge over
Lake Champlain was shut down
last week when the New York state DOT found weaknesses in its supports,
cutting off a large Vermont dairy farm from its own milking cows.

Inhofe did not mention the leading source of the impasse over a
longer-term extension of the 2005 transportation bill: his own party.

Oklahoman told CQ earlier this week that "at least two Republicans
objected" to unanimously approving six months’ worth of funding, "and
that there is not enough floor time to finish a bill this week under
normal procedure."

A similar situation played out in the wee hours of last month, when Republican senators blocked a plan
to use unspent money from the $700 billion banking bailout — which
Inhofe voted against — to prevent the cancellation of more than $8
billion in transportation contracts.

As Streetsblog Capitol Hill reported yesterday,
barring a last-minute agreement to take up the six-month extension, the
federal transportation program is likely to be extended under a
"continuing resolution" that lasts until Dec. 18 or a three-month
extension, already approved in the House, that lasts until Dec. 31.

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Transportation Policy Becomes the Proverbial Tree Falling in the Forest

Halfway through this afternoon’s rally
in support of a new federal transportation bill, there came an
accidental but telling moment. A group of tourists, attracted by the
hundreds of orange flags planted in the National Mall for the rally,
walked through the event and whispered questions to attendees about its
purpose. Once their curiosity was sated, the group lost interest and
ambled away.

0131mnfederal_dd_graphic_oberstar.jpgRep. Jim Oberstar (D-MN) (Photo: Capitol Chatter)

The tourists may well have been speaking for most senior lawmakers on Capitol Hill, where this week’s growing momentum
towards a six-month timetable for taking up the next long-term
infrastructure bill was abruptly squelched by GOP senators’ inability
to find consensus among their members.

As the subscription-only CQ reported today:

Efforts in the Senate
to take up a six-month extension of surface transportation law this
week appear dead, over objections by a few Republicans to passing it
without a full debate, said James M. Inhofe of Oklahoma, the ranking
Republican on the Environment and Public Works Committee.

… Inhofe said Tuesday that at least two Republicans objected
and that there is not enough floor time to finish a bill this week under
normal procedure. 

The Senate’s lack of progress means that officials working on the
nation’s transit, roads, bridges, and bike paths will likely have to
continue operating under a second short-term extension of the 2005 transportation law, this time lasting until December 18.

the prospects of continuing uncertainty on the local level, House
transportation committee chairman Jim Oberstar (D-MN) remained upbeat
and focused on a singular goal: getting his colleagues to elevate
infrastructure to the top-of-mind status currently occupied by health
care (followed by financial regulation and climate change).

the White House," Oberstar advised the organizers of today’s rally, who
parked heavy-duty construction equipment along the sidewalk to
symbolize their plea for more transportation spending. "Encircle the

The economic stimulus law’s $48 billion in transport
aid, $8.4 billion of which went to transit, "will dry up" by spring of
next year, Oberstar added. He threw in a jab at Obama administration
officials who insisted on cutting stimulus transit spending to pay for tax cuts: "I don’t know of anybody who’s thanked me for their $250 tax credit … God only knows what’s happened to it."

Speaking to reporters after the rally, Oberstar said that extending
the 2005 transportation law until the holidays "will give us time
between now and Christmas to agree on a six-year bill."

But the Minnesotan’s push for taking up his $450 billion proposal
by year’s end has yet to be met with any enthusiasm from the White
House and senior Senate Democrats, who until recently had aligned with
Obama aides in favor of an 18-month delay.

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Transport Policy Update: Senate to Pass 6-Month Extension This Week

Before week’s end, the Senate will pass a six-month extension of the
nation’s four-year-old transportation law — setting the stage for
another showdown with the House, where transportation committee
chairman Jim Oberstar remains on the fence about abandoning the push for a new long-term bill before 2010.


Majority Leader Harry Reid (D-NV) confirmed yesterday that the upper
chamber would scale back its original plan to delay the next federal
transportation law by 18 months, as was originally proposed by the Obama administration.

six-month extension is "expect[ed] to pass," Reid said on the Senate
floor last night. That leaves the ball in Oberstar’s court, with time
running out before the expiration of the one-month reprieve under which state transportation officials are now operating.

the Senate can keep its six-month extension within the budgetary
boundaries set by the House "pay-as-you-go" rule, which requires any
new spending to be offset by cuts elsewhere, that may force the hand of
Democrats in the lower chamber.

An early answer from the
House side may well come tomorrow, when Oberstar is scheduled to appear
at a rally sponsored by the construction equipment industry aimed at
drumming up support for passage of a new infrastructure bill before the
end of the year.