Sen. Kit Bond (R-MO) (Photo: Politico)

But Transportation Secretary Ray LaHood's visit with Senate appropriators today was anything but humdrum, as Sen. Kit Bond (R-MO) challenged him repeatedly to defend the White House's efforts on sustainable development and high-speed rail.

Bond cited a recent Wall Street Journal editorial by Wendell Cox, a conservative pundit who has penned laudatory literature for road lobbying groups, in accusing the Obama administration of frittering away taxpayers' money on high-speed rail.

LaHood fired back, remarking wryly that Bond's home state sought high-speed rail grants and publicly celebrated its $31 million haul. "I got calls on this every day from senators and governors" clamoring for an opportunity to build inter-city passenger rail, LaHood said.

Answering Bond's charge that the rail funding process was less than transparent, the U.S. DOT chief threw in a bold claim: "I don't know of one lobbyist that darkened our door with an application … that came to our door with the idea they were going to have some edge."

A November investigation by the nonpartisan Center for Public Integrity found that more than 50 government entities and private companies have hired high-speed rail lobbyists, including the AFL-CIO, the Mayo Clinic, and overseas train manufacturers such as Siemens and Bombardier.

The sharpest exchange between Bond and LaHood came on the topic of walkable local development, which the U.S. DOT has worked to promote through $150 million in 2010 grants and an inter-agency partnership with housing and environmental protection officials.

"What is livability?" Bond asked LaHood, minutes after comparing the task of defining the term to defining pornography. (The origins of that reference are explained here.)

"Communities where people have access to many different forms of transportation, and affordable housing ... maybe they don't want a car, so they can walk to work or take mass transit to work," LaHood said, using the newly built-up neighborhood surrounding his office as an example.

Bond's reply summed up the challenge of crafting new federal transportation policy in an era marked by rural-urban-suburban culture clashes. "I've got a lot of constituents for whom livability means having a decent highway," he said. "They've got to drive between one town and another town."

LaHood gamely tried to put Bond's criticism in perspective, noting that highways received the lion's share -- $27 billion -- of the transportation funding in last year's economic stimulus law.

Yet Bond only dug in his heels, arguing that Americans had shown their eagerness to use roads and bridges but would not embrace rail or walkable infrastructure. "When did it become the responsibility of the federal DOT to build sidewalks?" the soon-to-retire senator asked, before LaHood that reminded him Congress set up dedicated funding for pedestrian improvements nearly 20 years ago.

A longtime critic of congressional earmarking, Feingold has proposed legislation that would take back earmarked money at all federal agencies that remained unobligated after a decade. During a Wednesday Senate Budget Committee hearing, Feingold asked Transportation Secretary Ray LaHood if the Obama administration would support the portion of his plan that affects infrastructure.

LaHood gave a hearty affirmative (viewable in the above video), telling Feingold that the U.S. DOT had begun identifying earmarks that were ripe for cancellation due to lack of use.

(Photo: brainlink.org)

The sample bill text [PDF] was prepared by the U.S. DOT's National Highway Traffic Safety Administration, which invited road safety groups to join auto industry representatives, the AAA, and officials from state DOTs to help craft consensus language.

Transportation Secretary Ray LaHood called the legislation in a statement "another powerful tool in our arsenal to help the states combat this serious threat” of texting while driving in a statement that accompanied the sample text -- which carves out an exemption from any fines or penalties for drivers who (emphasis mine):

Receiv[e] messages related to the operation or navigation of a motor vehicle; safety-related information including emergency, traffic, or weather alerts; data used primarily by the motor vehicle; or radio.

States that adopt the Obama administration's sample language, then, would allow drivers to continue getting traffic tweets and texts from their local DOTs, a practice dubbed "mixed messages" by the Associated Press in a September investigation.

"It's not a perfect bill, but it was something that everybody in the group felt they could put their name on it and say, 'this is a good start,'" Judith Lee Stone, president of Advocates for Highway and Auto Safety, said in an interview, adding that the exemption for drivers getting traffic and weather alerts "may have just slipped by us."

If the Advocates were to write their own version of sample distracted driving legislation, Stone said, "we probably wouldn't include" the exemption. But she noted that the group has no plans to draft its own language for states working on texting bans.

The U.S. DOT noted in its release today that the sample bill "reflects current circumstances and state of knowledge, but may be revised in the future to incorporate new research findings, address evolving technologies, or to harmonize with other legislation."

A research team from the University of Utah reported in December that reading incoming text messages had a more deleterious effect on drivers' braking response times than writing texts.

Boxer and LaHood get on the same page. (Photo: AP)

If this sounds familiar, it's because Boxer held a similar forum downtown back in September 2008, where various officials from around Los Angeles, ranging from Mayor Antonio Villaraigosa and then-Metro CEO Roger Snoble, testified about their priorities for a long-term federal transportation bill.

The hours and hours of testimony can be described in two terms: "new starts" and "ports."  There was no mention of words such as "bicycle," "pedestrian," or even "smart growth."

The key to whether this new town hall will provide a chance to discuss what various transportation stakeholders need and desire in a transportation reauthorization bill will be up to Boxer, LaHood and Art Leahy, the new Metro CEO. Last time, non-VIPs had to wait through hours of presentations by elected officials and bureaucrats before any advocates -- or other people that don't collect a government paycheck -- got to take their turn.

If this is really a town hall, then hopefully all of the stakeholders, including commuters that don't have a paid driver, will get a chance to speak.

The Southern California Transit Advocate's Dana Gabbard agrees:

I'm glad to see Senator Barbara Boxer and U.S. Transportation Secretary Ray LaHood have announced they are reaching out to stakeholders seeking input on the currently stalled federal transportation funding reauthorization bill. Which is all well and good IF the attendees reflect a wide range of stakeholders, not just usual suspects. Heretofore our region hasn't always done as well as it should in that regard. If more a diverse group of people see the process as being connected to their needs and concerns, maybe the chances of some progress [for] passage sooner rather than later would improve. At least the preliminary agenda includes some good concepts for discussion, including livability and safety.

Transportation Secretary LaHood, at left, with the president. (Photo: NYT)

"There is a great deal of interest in this concept in the Senate," LaHood told reporters during a wide-ranging discussion of the White House's transport budget for the fiscal year that begins in October.

Asked about resolving any differences between the administration's Fund plan and a more bank-like entity envisioned by senior lawmakers, LaHood emphasized his openness to cooperation: "The idea is that we'd work with Congress on their ideas."

LaHood also noted that the U.S. DOT's $78.8 billion budget request for 2011, which marks a 2 percent increase from last year's levels, includes $50 million in grants for an issue that he has turned into a personal signature for him -- cracking down on distracted driving.

One topic of particular interest was the White House's continued assumption of transfers from the general Treasury to the highway trust fund (HTF) pending enactment of a new long-term federal transportation bill. As the federal gas tax, last raised in 1993, remains static and lawmakers decline to discuss an alternative funding source, the presidential budget document projects that the HTF would need more than $11 billion to make it through the current fiscal year.

LaHood told reporters that while "we've gone along with the short-term extensions" of the 2005 federal transport law, the most recent of which expires at the end of this month, the White House has always sought to postpone the next bill until 2011.

"The biggest dilemma for all of us is finding $400 [billion] to $500 billion, given that the highway trust fund is insufficient to fund all the things we want to do," the former House Republican added.

The uncertain status of future HTF infusions prompted one reporter to ask whether transportation spending would be subject to the president's proposed three-year freeze on discretionary accounts. (Indeed, today's budget includes a chart projecting that long-term transit funding would remain flat.) Chris Bertram, the U.S. DOT's chief financial officer, said the budget's funding levels should be considered "placeholder, rather than frozen."

LaHood made his announcement today at the Transportation Research Board conference. (Photo: AP)

The first move: LaHood's DOT will rescind a 2005 rule that elevated "cost-effectiveness" above all other criteria used to determine whether a local transit project can receive federal funds. Cost remains a factor in the "New Starts" process, but is no longer given more weight than factors such as congestion relief.

House transportation committee chairman Jim Oberstar (D-MN) and Rep. Pete DeFazio (D-OR), his top lieutenant, quickly issued a statement hailing the reversal of the Bush-era mandate, which is blamed for slowing down transit expansions in several major cities.

"Now we need increased investment dollars to follow this reform, so that we can move forward with transit projects that relieve congestion, reduce emissions, increase our energy independence, and promote more livable communities across the country,” Oberstar said in a statement.  “We must all continue to work together toward a long-term authorization bill that makes transit options available to more people."

The second of the Obama administration's moves: Environmental and economic benefits will become official factors in evaluating "New Starts" proposals. This change requires a rulemaking by the Federal Transit Administration (FTA), which typically includes a period of public comment, so will not take effect immediately.

In announcing this latter shift, LaHood and FTA chief Peter Rogoff emphasized the need to look at the community-building benefits of transit.

"To put it simply: We will take livability into account," LaHood said today. "This new approach will help us do a much better job aligning our priorities and values with our investments in transit projects that truly strengthen communities. We’ll finally be able to make the case for investing in popular streetcar projects and other transit systems that people want – and that our old ways of doing business didn’t value enough."

Late Update: Rep. Earl Blumenauer (D-OR) weighed in with a statement connecting today's news to the White House's broader sustainable communities push:

Rescinding this Bush administration restriction will unleash funding for important transportation projects across the nation, jumpstarting local economies and creating good jobs.  This means quicker and better funding for streetcars, light rail, and bus projects that improve transportation, revive local economies, and reduce global warming pollution. After much hard work with the administration and my Congressional colleagues, this is an exciting outcome that will create better and more transportation opportunities.

Even Later Update: Transportation for America weighs in on LaHood's announcement on its blog, deeming the changes a positive step but emphasizing that cities and towns are still competing for a limited pot of transit money.

"Even under the old narrow rules for winning approval, only a small percentage of the many applicants were receiving limited funding," T4A communications associate Stephen Lee Davis wrote.

The appropriate vehicle for making broad changes to the funding distribution between roads and transit, however, remains the six-year federal transportation bill -- which is stalled on the Hill for a number of reasons.

LaHood addressed the ongoing impasse over a new federal bill during his remarks today on the transit rules change, calling fresh six-year legislation a "critical piece of the puzzle."

"I recognize there’s a lot of capacity and demand for additional transportation investments across the country that neither the stimulus nor a new jobs bill can provide," he said. "We need to empower regional and local transportation authorities to invest in the kinds of projects that will spur economic growth, enhance livability, and preserve the qualities that make each area special."

To help advance those goals in the absence of concrete congressional action, the former GOP lawmaker vowed that U.S. DOT would "pursue more flexible partnerships with states, MPOs, transportation agencies, and local communities."

U.S. DOT chief Ray LaHood's team is working on a six-year transport proposal of its own. (Photo: Getty)

"A lot of it [is] the disjointed federal programs that often discourage and certainly do not incentivize the coordination of housing policy and transportation policy, water infrastructure policy, economic development policy," she said.

"In fact, within the transportation program, we really disincentivize this," she said. A state that improves traffic flow and transit use will burn less gasoline, meaning it will lose revenue from its main source of transport funding -- the gas tax. "That state that creates greater efficiency can see their own budget get slashed as a reward."

This tension between the desire to cut transportation emissions and the nation's reliance on the gas tax for the majority of its transport funding is a familiar one for Rep. Jerrold Nadler (D-NY) and other urban members of Congress.

Nadler lamented back in June that many states were insisting on a guaranteed rate of return from their gas-tax revenue based on a nonsensical "equity argument" that says: "The more energy-efficient you are, the less gas you use, the less [federal] funding you should get."

One key ingredient in the Obama administration's effort to carve out a stronger federal role in local planning, of course, is the still-stalled six-year federal transportation bill. And Osborne -- seemingly aware of the value of that legislation in removing longstanding obstacles to coordination -- told the TRB meeting that "Capitol Hill has asked DOT to craft its own version of a transportation reauthorization bill," according to ClimateWire.

A legislative outline from Transportation Secretary Ray LaHood, who spent much of 2009 urging lawmakers to put off discussion of the next six-year bill until 2011, would be an undeniable boost to Democrats who have long urged the administration to play a more active part in solving the puzzle of long-term financing.

But the political hurdles to enacting a new federal transport bill this year remain steep, as ITS America President Scott Belcher remarked in one of today's TRB conference sessions.

"Everybody wants to get past the elections" before passing new long-term legislation," Belcher said, "and they want to get past the election because they don't want to raise taxes."

Transportation 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.

But 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.

GM CEO Fritz Henderson's company can earn fuel-efficiency "credits" for its Chevy Volt. (Photo: IB Times)

But the "German provision" isn't the only loophole that made it into today's new rule.

The Obama administration also would allow car companies to earn credits for achieving a lower CO2 emissions standard than the government requires in any specific year.

Those credits could be carried forward five years or back three years, used to make up for deficiencies in other vehicle fleets, and even earned this year, ahead of the new fuel-efficiency standard's phase-in period, which begins in 2012.

For instance, an automaker that beats the standard for its cars could use the credits it earns to safely produce more gas-guzzling trucks. That automaker could earn even more credits for any electric vehicles it produces, for improving its air-conditioning systems, or for making more "flex-fuel" autos that can run on ethanol-blended E85 gas -- which is available in fewer than 2,500 gas stations nationwide.

Today's rule even allows automakers to trade credits with other manufacturers, opening the door to a bit of horse-trading between Ford and Honda or Toyota and General Motors.

The concept of credit trading is not a new one; the EPA has employed it in other pollution regulations that were drafted under Clean Air Act authority. Still, the extent of the credits proposed today unsettled veteran fuel-efficiency advocate Dan Becker, director of the Safe Climate Campaign.

California and 13 other states have gotten the go-ahead to begin imposing stricter fuel standards on automakers before the national rule starts taking effect in 2012, Becker said in an interview.

That could create a perverse incentive for car companies to earn extra credits, he added, "by shuffling more efficient vehicles into those states, then com[ing] back in 2012 and say[ing] we over-complied with the national law by selling these cleaner cars."

For some domestic automakers, however, the "German provision" may sting most of all. The chairman of the Center for Automotive Research in Michigan told the Detroit News last week that the loophole amounted to a "subsidy" for foreign companies. 

The EPA states in today's fuel rule that it believes the "environmental impact of the ['German provision'] will be very small," resulting in 0.4 percent more greenhouse gas emissions if every eligible car company took advantage of the exemption.

In fact, not every company selling fewer than 400,000 vehicles is expected to avail themselves of the loophole. Becker, pointing out that most automakers are already meeting Japanese and European fuel-efficiency standards stronger than those in the U.S., urged the smaller companies to comply with the full extent of the law.

"BMW and Mercedes talk about the prowess of their engineers," he said. "One would think their engineers are good enough that they could comply with what GM and Honda have to comply with."

There is a 60-day window for public comments on the new fuel rule, after which time the White House could make changes. Given the intensity of industry lobbying in favor of the efficiency loopholes, however, Becker said environmental advocates would push for a "backstop" that forces automakers to meet higher fuel standards if they fail to comply with the previous year's limits.

(Photo: Newsday)

Was CARS a good policy, all things considered? Let's look at a few of the latest numbers on the program.

There were approximately 1.17 million vehicle sales in August, which works out to a seasonally adjusted annual rate of about 14 million vehicles. June's sales rate was under 10 million and near the recession low, while last August's rate was also about 14 million. Meanwhile, the August norm in good times was about 16 million.

What does that say about the value of the program? Well, let's say that August sales would have matched June's sales in the absence of CARS. They almost certainly would have been higher given economic improvements between June and August, but for argument's sake, let's say they were the same. We can then estimate how many additional sales CARS produced and the actual subsidy per new sale.

Here's economics blogger Calculated Risk:

If Edmonds.com is correct, and total sales were 1.17 million...in August, then the tax credit only generated about 320 thousand extra sales. Of course some regular car buyers might have put off a purchase to avoid the rush in August, so this isn't perfect, but instead of costing taxpayers $4,170 per car (as announced by DOT), the cost to taxpayers per additional car sold was close to $7,200.

In other words, CARS just didn't generate that many new sales. Much of the subsidy went to buyers who would have purchased anyway.

As it turns out, much of the subsidy also went to people who weren't interested in purchasing GM or Chrysler vehicles. While year-over-year sales figures rose in August for Ford, Honda, and Toyota, sales declined by 15 percent and 20 percent respectively for Chrysler and GM. To the extent that CARS was designed to help struggling American automakers, it doesn't seem to have had the desired effect.

Particularly worrisome is today's report that sales fell precipitously in the last week of August -- after the CARS program ended. Rather than generate momentum for the automobile industry, CARS may have primarily moved sales around. To a certain extent, it might also have been counterproductive. How so?

Given fixed supply, a purchase subsidy will often just lead to an increase in price:

Jeremy Anwyl, CEO of the auto Web site Edmunds.com, said dealers and automakers clearly gained from the big boost in sales. But while the incentives helped consumers, average prices for vehicles went up as buyers less concerned about prices rushed to take advantage of the rebates.

Inventory shortages from the popular program could keep prices high and drive down new vehicle sales. "We have created a sales bubble and now that bubble has burst," Anwyl said.

And while Transportation Secretary Ray LaHood claimed that CARS saved jobs and the the inventory draw-down would lead to increased production, automakers are likely to be cautious in building new vehicles if demand appears unsustainable. The White House's claim that CARS will boost third quarter output by 0.3 percent to 0.4 percent will not prove accurate if September sales fall back below trend.

And then there's the environmental effect of the plan. Much attention has been paid to the fact that purchased vehicles were some 9 miles per gallon more efficient than traded-in vehicles. As I've noted before, much of that gain would likely have taken place without the program, based solely on the fact that oil prices rose steadily over the past decade.

One pair of economists estimated that the carbon savings from the CARS program worked out to roughly $596 per vehicle -- well below the voucher values of $3,500 or $4,500 per new vehicle. Another economist estimated that the implied cost of carbon under the program was somewhere between $237 and $500, much higher than what is assumed to be an efficient carbon price.

No matter how you cut it, CARS was an expensive means to reduce emissions.

That doesn't mean that it was a total waste. There was almost certainly some positive economic and environmental impact from the policy.

But that $3 billion could have been used elsewhere. Other potential programs -- restoring heavily used transit services trimmed by budget cuts or funding weatherization programs, for instance -- would almost certainly have been greener and more stimulative.

In the end, "cash for clunkers" should be understood as a missed opportunity, politically attractive but far from ideal as policy.

The scene at yesterday's N.C. toll road groundbreaking. (Photo: WRAL)

The highway was financed by a package of toll-backed bonds and Build America Bonds, supplemented by a $386 million loan from the Obama DOT. Electronic tolls would be levied on drivers through a windshield-mounted transponder device that deducts fees based on the number of miles driven.

Transportation Secretary Ray LaHood hailed the tolling method on his blog today,  calling it a sign that the Triangle Expressway is "not just another highway."

Indeed, the success of an all-electronic system such as North Carolina's could pave the way for tech-dependent tolls on vehicle miles traveled (VMT) and congestion pricing as supplements to the increasingly outmoded federal gas tax.

Some local residents, however, have aired concerns about the toll road's impact on low-income drivers who lack the means to purchase a transponder. Those without the device will have to pay higher toll bills that are mailed based on video-captured images of their license plates.

Meanwhile, transit expansion in the Triangle area of Raleigh-Durham is proceeding, albeit at a slower pace than the new toll road. The state legislature voted in April to let counties opt for local sales taxes to pay for rail and bus improvements. Those taxes would likely come before voters in mid-2010 at the earliest.

(Photo: GT Channel)

In a preview of his remarks to the AP, LaHood said that he would prefer to ban texting while driving right away, but that the nation's experience with seat belt laws shows a broad approach involving education and proper penalties needs to be part of the mix.

"When we are done" with the summit, LaHood said, "I expect to have a list of concrete steps to announce."

Verizon, the nation's largest wireless provider, is already backing the Senate bill to encourage state-level bans, though other carriers have stopped short of an endorsement.

The Governors Highway Safety Association, which represents state road safety officials, remains opposed to broad bans on texting while driving, citing "the difficulty of enforcing such laws."

Two weeks ago, Ray LaHood candidly addressed the need to reduce the nation's vehicle miles traveled in order to halt the devastating effects of climate change. But the Transportation Secretary had a decidedly different message today.

(Photo: NYT)

Originally touted as a boost to both the environment and the adrift domestic auto industry, the "cash for clunkers" concept quickly became nothing but the latter after Congress watered it down to apply to cars that get as little as 22 miles per gallon -- and trucks that boast even lower fuel efficiency.

But today's event continued to perpetuate the erroneous claim that $1 billion in public subsidies for new car purchases would help reduce emissions as well as rescue the auto industry.

"This really is a three-for," Sen. Carl Levin (D-MI) said. "It's great for the economy, a great thing for consumers ... third, of course, it's great for the environment itself."

Who the program isn't great for is transit riders hoping to escape their cars. The original "clunkers" bill would have allowed car owners to take their trade-in benefit in the form of transit vouchers, but LaHood said that option is unavailable now that the program has been implemented.

The program also brings bad news in the fine print for owners of serious "clunkers": Benefits are not available for cars manufactured before 1984.

While the DOT estimates that as many as 250,000 autos will be scrapped before the initial infusion of cash runs out, car industry forecasters at Edmunds.com believe only 50,000 extra sales will result, leaving the taxpayers with a whopping $20,000 bill for every new car purchased.

What's more, the program could have an unforeseen cost as dealers figure out how to transport the junked vehicles to a government-approved salvaging plant. Other than the engine, parts of the old "clunker" can be recycled into other cars, but that resale is not required.

The Automotive Aftermarket Industry Association, which represents more than 23,000 car parts and service companies, predicted a "consumer backlash" to the program as more people realize the bureaucratic hurdles and environmental costs of disposing of traded-in cars.

Still, today was a happy occasion for lawmakers such as Levin and freshman Rep. Betty Sutton (D-OH), who out-maneuevered senators backing a stronger version of "cash for clunkers" in pushing her version of the program into law.

Echoing an argument used during the economic stimulus debate earlier this year, Sutton depicted the "clunkers" idea as, quite simply, a way to keep people employed. In her home district, Sutton declared, "car dealerships are bustling!" As many as 50,000 jobs in her state depend on the local auto assembly plant, she added.

And that's good news for the Obama administration. which has steered GM and Chrysler through bankruptcy amid criticism from some in the president's party.

The U.S. DOT's readiness to lend automakers a hand -- no matter the mixed environmental messages that result -- is a testament to the White House's belief in the political benefits of keeping car companies flush.

Transportation Secretary LaHood said today he'll weigh in later on climate-change money for transit. Photo: HillBuzz

Asked by Streetsblog Capitol Hill today about the so-called "CLEAN TEA" plan, which would set aside 10 percent of the revenue from any carbon cap-and-trade system for sustainable modes of transport, LaHood said the administration would wait until the House and Senate began merging their climate bills before expressing a view.

"We're going to let the Senate have their debate," LaHood said. "I believe you will see the administration weigh in during the conference report [stage] rather than me trying to tell the Senate what they should be doing."

In a sense, this approach is consistent with the "let Congress work its will" strategy that's been regularly employed by a White House stocked with congressional veterans. But a strong show of support for "CLEAN TEA" by LaHood, who often talks about his desire to expand transport options and transit-oriented development, could make the difference as the Senate works its way towards a first draft of climate legislation in September.

Indeed, the House-passed climate bill did not include "CLEAN TEA" and ultimately devoted just 1 percent of its cap-and-trade revenue to green transportation.

The climate-money-for-transit plan is sponsored in the House by Rep. Earl Blumenauer (D-OR) and in the Senate by Tom Carper (D-DE), who yesterday urged his colleagues to add it to their version of cap-and-trade legislation:

When Americans drive less, our transportation dollars dry up. So states and seeking to cut oil use, to lower greenhouse gas emissions and to reduce their constituetns' gas costs end up getting less federal transportation funds. This is punishing them for doing good.

Instead, we ought to reward state and local governments by sending federal dollars based on how much they reduce dangerous emissions.

Whether Carper can sway Environment and Public Works Committee Chairman Barbara Boxer (D-CA), who gave more to transit in her 2008 climate bill than this year's House measure does, remains to be seen.

Transportation Secretary Ray LaHood, with his boss at right. (Photo: whitehouse via Flickr)

Streetsblog Capitol Hill obtained a copy of the item the administration wants to see added to any 18-month extension. The proposals are narrowly tailored and relatively inexpensive. Still, securing their passage could prove difficult given the House's preference for passing its new federal bill and the Senate's affinity for a "clean as a whistle" extension.

The biggest item on the administration's agenda is $310 million to help state DOTs and local Metropolitan Planning Organizations (MPOs) begin collecting data on the usage and ridership of transportation projects.

"This voluntary program would provide participating entities the opportunity to integrate analysis into investment decisions and prepare for improved accountability standards and merit criteria in the long-term reauthorization," the administration document states.

The administration is also seeking stricter requirements for states and MPOs to report on the costs and performance of projects that are getting federal money.

Coupled with the money for "capacity-building" at states and MPOs, the plan suggests that national performance targets -- the type proposed by Rep. Russ Carnahan (D-MO) but absent from the House's current legislation -- are on the DOT's radar as it plans for transportation reform over the next year or two.

In fact, the White House appears highly cognizant of the political blowback coming from House Democrats over its proposed delay in the transportation re-write. The $20 billion patch to the highway trust fund that Congres aims to pass by August "should be considered 'Stage I' of the broader reauthorization process," the administration document states.

But the new help for states and MPOs isn't the only transportation policy shift the administration is prepared to push for this year. A national infrastructure bank could also be on tap -- one that looks a bit different from what's proposed in the House transportation bill.

The administration's summary of its infrastructure bank plan is available in full after the jump.

BANK PURPOSE AND OBJECTIVES

Given the nation’s diverse infrastructure needs—including energy, water, transportation, and telecommunications—the Administration proposes the establishment of a National Infrastructure Bank with an initial focus on transportation-related investments and flexibility to expand to other sectors over time. This approach will help target resources to the federal transportation funding system, which is particularly in need of bold reform at this time. In the meantime, the Recovery Act and other funding will help clarify the highest-value approaches to investing in other sectors.

The purpose of the Infrastructure Bank is to establish a new direction in federal infrastructure investment: one that supports regionally and nationally significant, high-value projects funded through a merit-based selection process. The Bank would fund relatively large and transformative projects currently underfunded by the allocation process, including:

• Projects that cross state and local jurisdictions, such as freight and passenger rail;
• Projects that integrate sectors and policy goals, such as highway projects that consider land use and economic development; and
• Projects that cross transportation silos, such as bridge construction that includes a rail line and harbor dredging.

Merit-based project selection would be a fundamental principle of the national Infrastructure Bank. The Bank would compare projects of different modes, incorporating cost effectiveness and equity considerations into its decisions.

BANK DESIGN PRINCIPLES

The budget resolution adopted by Congress includes $2 billion this year and $5 billion next year for a national Infrastructure Bank. President Obama has outlined broad design principles on the focus, governance structure, and financing mechanisms of the Infrastructure Bank. The Obama Administration will work with Congress to establish specific policies and practices for the Bank. 

• Sectors for investment: Transportation & transportation-affiliated projects. The Infrastructure Bank should target transportation and transportation-affiliated projects that emphasize smart land use, economic development, intermodalism, energy conservation, and other priorities of our modern infrastructure system. Focusing on cross-modal transportation projects with special attention to broader economic and environmental impacts would allow for effective targeting of Infrastructure Bank dollars. It would also direct funds to high-value projects that are difficult to finance in the existing system. As the Infrastructure Bank grows over time, its scope could expand to more sectors.

• Project size: Low minimum threshold. The Administration proposes a $25 million minimum threshold on project size. This relatively low project threshold is consistent with the fundamental principle of merit-based selection and would allow the Bank to choose the most valuable of a broad array of projects. The low threshold would also help make Bank funding accessible to all potential applicants, whether large or small, urban or rural. 

• Governance and structure: Independent entity within DOT. Political independence is critical to the success of an Infrastructure Bank. For this reason, the Administration proposes that the Bank be housed as an independent entity within DOT, consistent with the proposed Bank focus on transportation and transportation-affiliated projects. The Bank would be governed by a board of non-governmental advisors with proven expertise in infrastructure, appointed by the President and confirmed by the Senate.  Similar to the role of the IRS Oversight Board, the Bank board would lend expertise and insight to project selection, approve final selection decisions, and protect the Bank from internal and external political pressures.

• Financing mechanisms: Combination of grants and credit products.  A flexible set of financing tools would allow the Bank to provide the most appropriate form of financing to a given project.  The Administration would allow the Bank to offer a combination of grants and credit products like direct loans and loan guarantees.  The Administration does not support Bank authority to borrow independently from private capital markets, since Treasury is the sole entity that borrows on behalf of the federal government and can do so more cheaply and efficiently than any other entity.

Sen. Barbara Boxer (D-CA), chairman of the Environment and Public Works Committee and a key player in the federal transportation re-write, just released a statement hailing Transportation Secretary Ray LaHood's call for an 18-month extension of the existing transport law:

I am very pleased that the White House is being proactive in working with the Congress to address the shortfall in the Highway Trust Fund.  As we work our way out of this recession, the last thing we want to do is to drastically cut back on necessary transportation priorities.  The White House proposal to replenish the Trust Fund until 2011 will keep the recovery and job creation moving forward and give us the necessary time to pass a more comprehensive multi-year transportation authorization bill with stable and reliable funding sources.

Photo: AP

LaHood's request comes at an awkward time for Jim Oberstar (D-MN), chairman of the House transportation committee. Oberstar had planned to release an outline of his priorities for a new transportation bill tomorrow and vowed to oppose any short-term extensions of the Bush-era legislation -- exactly what LaHood is now seeking.

LaHood urged Congress to couple its extension with "critical reforms" to existing federal transportation policy that streamline cost-benefit analyses and help to promote more livable communities. But it's far from clear that such changes could pass Congress by the end of next month, when lawmakers are slated to leave Washington and must come to a decision on shoring up the highway trust fund.

In addition, LaHood's call to effectively postpone debate on long-term transportation policy reform may not sit well with the small but vocal group of lawmakers who would prefer to start a broader discussion this year.

Extending the existing law also puts off a discussion over whether to keep relying on the gas tax to fund transportation improvements or move to a new revenue source -- a politically volatile issue for the Obama team, but one that lawmakers from both parties increasingly say is necessary.

Oberstar plans to stick to his schedule for moving forward on a new transportation bill, his spokesman told Streetsblog. During an invitation-only briefing with reporters earlier today, he called extending the existing law "unacceptable."

LaHood's full statement follows the jump.

This morning, I went to Capitol Hill to brief members of Congress on the situation with the Highway Trust Fund. I am proposing an immediate 18-month highway reauthorization that will replenish the Highway Trust Fund. If this step is not taken the trust fund will run out of money as soon as late August and states will be in danger of losing the vital transportation funding they need and expect. 

As part of this, I am proposing that we enact critical reforms to help us make better investment decisions with cost-benefit analysis, focus on more investments in metropolitan areas and promote the concept of livability to more closely link home and work. The Administration opposes a gas tax increase during this challenging, recessionary period, which has hit consumers and businesses hard across our country. 

I recognize that there will be concerns raised about this approach. However, with the reality of our fiscal environment and the critical demand to address our infrastructure investments in a smarter, more focused approach, we should not rush legislation. We should work together on a full reauthorization that best meets the demands of the country. The first step is making sure that the Highway Trust Fund is solvent. The next step is addressing our transportation priorities over the long term.

Update: In an interview with Bloomberg, LaHood describes his decision as one to "face reality" instead of "stringing Congress along with three-month or six-month extensions."

Transportation Secretary Ray LaHood (Photo: HillBuzz)

The circumstances behind the trust fund's financial troubles are well-known: a nationwide decline in driving coupled with political resistance to raising the gas tax -- which has remained static since 1993 -- forced the Bush administration to push $8 billion into the federal transportation coffers last summer. But that infusion was not offset by corresponding spending cuts, which LaHood says the Obama team is committed to this time around.

"We believe very strongly that any trust fund fix must be paid for," LaHood told members of the House Appropriations Committee's transportation panel. "We also believe that any trust fund fix must be tied to reform of the current highway program to make it more performance-based and accountable, such as improving safety or improving the livability of our communities -- two priorities for me."

Urbanites and transit riders may be cheered by LaHood's call to tie new highway funding to livability. Yet the administration's quest to offset its trust fund fix, which will cost as much as $7 billion, could prove fruitless.

Rep. John Olver (D-MA), chairman of the panel that greeted LaHood today, put it simply when asked if the necessary spending cuts could be found. "That'd be very tough," he said, noting that his own annual transportation spending is unlikely to become law before the highway trust fund runs out of cash.

Livable streets advocates may wonder why the highway trust fund is relevant to their cause, particularly since the mass transit account of the fund isn't projected to go bust until 2012.

The answer is pragmatic and incremental -- but unfortunately, so is Congress. Replenishing the trust fund with a cost offset, as LaHood suggests, requires a serious conversation about finding new long-term revenue sources for not just highways but all modes of transportation.

If lawmakers take the easy way out by not paying for the trust fund fix, it doesn't bode well for their chances of writing a new federal transportation bill that dedicates more money to streetcars, buses and rail, not to mention more responsible spending on roads.

Already there is a broad acknowledgment in Congress that the six-year federal bill will likely be put off until 2010. Rep. Tom Latham (IA), the senior Republican in charge of transportation spending, even predicted that the federal bill would not pass until 2011; next year is an election year, after all, which never inspires courage in the Capitol.

The ball is now in the court of the Ways and Means Committee, which has jurisdiction over the trust fund and would be tasked with finding spending cuts to offset any upcoming transfer of transportation money. Ways and Means Chairman Charles Rangel (D-NY) has influence and moxie to rival any of his fellow lawmakers, but he has been silent on transportation funding issues as health care and climate change legislation take center stage for now.

The high-speed Midwest Regional Rail Initiative's proposed reach. (Photo: Michigan Messenger)

"This is how the interstate highway system started, folks," Biden told the governors, according to the pool report filed by the White House press corps. "It wasn't like the Lord on the eighth day said -- boom! -- there's the interstate highway system."

The group included eight governors -- from Michigan, Pennsylvania, Virginia, Wisconsin, Illinois, Massachusetts, Georgia and Missouri -- but not New York's David Paterson, who's taking some flak from a Democratic state legislator for his decision to focus on legislative priorities in Albany.

Applications are due this summer for the $8 billion in high-speed rail money that was added to the economic stimulus bill, and detailed guidance on that process is slated for release by month's end.

It's still unclear, though, how many projects are in line for a share of that pot, not to mention the passenger demand and matching-funds requirements that rail proposals would have to meet.

As Sarah pointed out in her Streetsblog Network post today, directing the money to the most high-demand areas remains a key concern for transportation planners.

Another unanswered question is whether Congress will sign on to the administration's pitch for $5 billion in annual high-speed rail funding over the next five years. LaHood is headed to the House Appropriations Committee tomorrow morning, where part of his job will be to sell that long-term rail investment to his former colleagues on the Hill.

Meanwhile, the most well-represented corridor at the meeting appears to be the Midwest Regional Rail Initiative, which would link Chicago with St. Louis, the Detroit area, Wisconsin and the Twin Cities of Minnesota. In an April letter to LaHood, governors from that region estimated the cost of their high-speed rail corridor at $3.4 billion, using 3,000 miles of track that don't require negotiations over rights-of-way.

Midwestern senators are also working the phones to ensure that freight rail doesn't stand in the way of an expansion of high-speed passenger service. Will the Midwest initiative's political might -- both LaHood and the president are Illinoisans -- help vault it ahead of the competition?