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2009 Transportation Bill

Former U.S. DOT Chief on the Worst-Case Scenario: 4 Years of Extensions

To a certain extent, hope springs eternal in federal transportation
circles. Even as state DOTs and metropolitan planning organizations
operate under the latest in a series of extensions of the
2005 law
that governs road, transit, and bike-ped spending, few are
willing to envision a future in which new legislation doesn't pass by
next year.

AntiTaxProtesters.jpgAnti-tax protesters in Washington
state. (Photo:

After all, even the Obama administration -- which last spring
called for an 18-month
in taking up House transport committee chairman Jim
Oberstar's (D-MN) infrastructure
-- has signaled a willingness to begin talks on broader
policy changes by next spring.

But that outcome assumes that Congress and the White House can
reach an agreement by early 2011 on how to find as much as $200 billion
to pay for a significant six-year investment in infrastructure.

Right now there remains only two practical options on the table:
paying for a new transport bill with general Treasury money, which would
amount to deficit spending at a time when White House aides profess mounting
about the nation's red ink; and raising the federal gas
tax, which the president has flatly ruled out.

What would the worst-case scenario look like? It is rarely
mentioned on the record by Washington infrastructure watchers, but
former Transportation Secretary James Burnley IV outlined it neatly in
an interview this week with
D.C. Velocity

I started saying a year ago that we were facing four years ofshort-term extensions of existing [federal transport funding] programs,and I'm sorry to say thisis a prediction that I believe will come true. It will be especiallydifficult for the Obama administration and Congress to agree on asolution to the [highway] trust fund crisis if the political environment holds inNovember and we have more Republicans occupying both Houses who areskeptical of higher taxes of any kind.

What worries me is that the whole concept of the trust fund isbreaking down. You can't make the argument with a straight face thatthe trust fund should be spent just on transportation programs and thatit should be walled off from the appropriations process while at thesame time getting huge sums of money from general revenues. That is acorrosive process. By 2013, we could find the whole notion of the trustfund obsolete.

What Burnley does not mention is that extending the 2005 transportation
law past the current fiscal year would require continued transfers from
the Treasury (what he calls "general revenues") to the highway trust
fund, which belies
its name
by providing a regular source of funding for transit as
well as roads.

The jobs bill that President Obama signed
last month
shifts $19.5 billion into the trust fund, a sum expected
to keep it solvent until the end of fiscal year 2010, but preserving
even the inadequate existing levels of maintenance for roads and rails
would require extra money this fall unless Congress passes a new
transportation bill.

Still, Burnley's assessment of the political reality rings true.
With the rise of the anti-tax Tea Party movement drawing media and
public attention to the prospect of future tax hikes to help shrink the
deficit, Democrats are already taking great care to reinforce the
president's campaign pledge
not to raise taxes for households earning less than $250,000 a year.
Anyone predicting a more hospitable environment on the Hill next year
for raising gas taxes to pay for infrastructure would be safely accused
of wishful thinking.

And the more that Democrats shrink from the T-word, the stronger
the likelihood that the 2005 transport law would be extended until after
the 2012 presidential race -- barring a breakthrough on new financing
tactics, that is.

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