After two years of discussions about how to reform the system by which the federal government distributes transportation funding, the debate remains stalled: There is no consensus in Washington on just how much should be spent on transportation, what modes should be financed, and how revenue for the program should be collected. Though then-Chairman of the House Transportation and Infrastructure Committee James Oberstar (D-MN) in 2009 proposed a $450 billion six-year bill, his initiative was ignored by the U.S. Senate and put off by the White House, which had other priorities. Highway and transit funding have been put on life support, financed through $34 billion in infusions from the general fund to support short-term extensions of the SAFETEA-LU bill first passed in 2005.
The arrival of a new Republican majority in the House of Representatives complicates the matter further, as that caucus has been even more hostile to tax increases than the Democrats once in control. There is virtually no interest on either side of the aisle for a fuel tax increase to pay for better transportation infrastructure. And the Obama Administration’s focus on livability and high-speed rail — two features once expected to be featured in any new transportation bill — is not shared by many conservatives, forcing the question of how a compromise bill can be structured to support both Democratic and Republican priorities, especially in the run-up to the 2012 presidential election.
Robert Puentes, Senior Fellow at the Brookings Institution, has introduced a new proposal that attempts to skirt around the problem by implementing a two-year transportation reauthorization bill that relies on existing funding alone and makes only minor changes to the manner in which corridors are financed. Not coincidentally, it would come up for reconsideration only after the 2012 elections. This plan, though so far not endorsed by any members of Congress, nevertheless represents a potentially fertile ground for compromise and could guarantee federal support for transportation investments until at least 2013.
Puentes notes that existing funding for transportation, including receipts from the fuel tax and the infusions from the general fund, should be adequate to maintain existing levels of federal spending until 2013. Therefore, he argues that the question of how to increase those expenditures in the long term (vitally necessary) should be put off until the political storm has passed.
In the meantime, the two-year reauthorization, which Puentes has labeled SAFETEA-TWO, would make minor improvements to the existing law. Metropolitan areas that invest in their own transportation systems such as through the implementation of local-option sales taxes would receive incentives. Highway trust fund dollars distributed automatically to states by formula would be transferable to pay for rail operations. The government would streamline distribution of government infrastructure financing programs such as TIFIA, Private Activity Bonds, and Railroad Rehabilitation and Improvement Bonds, allowing interested bodies to apply for more than one program at the same time. Big, multi-corridor projects such as L.A.’s 30/10 program — currently split up into a number of pieces, limiting their potential implementation — would be fundable through the structure. Public-private partnerships would be encouraged through a special office. And out-of-date programs like the Appalachian Development Highway System would be put to rest.
Puentes also suggests that the Obama Administration’s discretionary transportation funding programs — including TIGER and high-speed rail grants — are not adequately transparent and should be altered to encourage the use of performance outcome measures and cost/benefit analyses. Of course, the new Republican House majority has not laid out its particular interest in extending the lives of those programs. Keeping money flowing for highway construction seems thus far to be the main priority.
On the whole, these are all reasonable ideas: They would provide marginal improvement in the manner in which transportation dollars flow from Washington and they would offer states the assurance that their highway and transit funding is guaranteed — at least for the next two years. They would also set the standard for the next transportation bill, incorporating objective standards to judge the best investments for any one corridor.
The basic principle underpinning Puentes’ plan — that passing a full new transportation bill now is too politically difficult — is hard to dismiss. TEA-21, which preceded SAFETEA-LU, was extended 12 times over the course of almost two years, so there is precedent for delaying action on transportation legislation. But is there a substantive enough difference between the “reauthorization” he is proposing and the extensions currently being passed by the Congress? Is it worth spending potentially months negotiating the outlines of a bill that would be in effect for only two years and that fails to resolve the more basic problems facing the U.S. transportation system, namely a lack of adequate funding?
Puentes’ proposal does advocate funding further research into alternative funding mechanisms, like a vehicle miles traveled fee. And it suggests that a long-term bill to be passed in 2013 incorporate two programs, one focusing on maintenance of the existing system and another on expansion of the system. But it is hard to see how passing a two-year reauthorization would reduce the conflict between the parties about how to fund transportation and what transportation to fund. After all, no matter what happens in the 2012 elections, there will still be disagreements about increasing taxes, and there will remain questions about whether to invest more in highways or transit. These problems will be unresolved.
Nonetheless, a two-year reauthorization may be the only feasible option for now, as the Congress seems likely to spend most of the next two years fighting over what programs to cut to pay for to the just-agreed-upon $858 billion federal tax cut, seeing as how revenue increases are on no one’s agenda. Serious thinking about improving the nation’s transportation infrastructure will be delayed.
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