The Federal Government Increases Commitment to Better Roads and Transit

Transportation infrastructure is drawing significant attention from the new administration. President Obama’s first major legislative effort, the economic stimulus bill, allocated nearly $50 billion to transportation projects. His first budget, for fiscal year 2010, included plans for a national infrastructure bank that would be the first large new funding source for such projects in many years. The new secretaries of the Department of Transportation, Ray LaHood, and Housing and Urban Development, Shaun Donovan, have announced a plan to work together to build housing and “livable” neighborhoods in conjunction with mass transit. And Obama has announced a plan to connect the country’s major economic centers with high speed and upgraded conventional rail.

Shortly after his election, President Obama began pushing for a massive economic stimulus package, which Congress ultimately passed on February 13, 2009. In speeches during the transition, he called for an investment in transportation infrastructure not seen since the creation of the federal highway system in the 1950s. At the same time, he said the stimulus investments should be “transformational,” helping to put the country on a path to energy independence, curb climate-damaging emissions, and provide the underpinnings of an emerging new economy that would be dynamic, mobile, and less dependent on fossil fuels. Many envisioned a “new New Deal,” a federal building program on the scale of the Depression-era construction of highways, parks, dams, civic buildings, and more, much of which we still use today.

The Stimulus Bill

Those aspirations ran head-on into the screen applied by President Obama’s economic advisers, led by Lawrence Summers. In order to provide the hoped-for, near-term stimulus, Summers’s team urged spending on “shovel-ready” projects that could put people to work almost immediately. There was no time to do the planning and big-picture thinking necessary for “transformational” investments. This meant that much of the money would have to be pushed out through existing programs, for projects--highways, primarily--already in the pipeline. It was a major disappointment for those hoping that the stimulus would mean a major infusion for oil-saving, low-carbon transportation systems, such as rail and other public transit, that could become the spines of more walkable or bike-friendly neighborhoods. 
“We had all been talking about this potential new vision, but when we did the recovery package it was, ‘Shovel the money out the door and forget about the consequences,’” lamented Robert Puentes, who tracks transportation issues for the Brookings Institution. “In the end we fell back on the same processes, the same projects, and the same interests.”

In leaning on yesterday’s priorities for expediency’s sake, the nation postponed the debate on priorities for the future until the renewal of the federal transportation program later this year, Puentes said.

Still, the final stimulus bill, dubbed the American Recovery and Reinvestment Act, did break some new ground with unprecedented flexibility in how the money can be spent. With nearly 40 percent of the transportation dollars dedicated to intercity rail and public transit construction and rehabilitation, the bill broke with the past custom that highways always receive at least 80 percent of transportation funds. After White House Chief of Staff Rahm Emanuel intervened on the president’s behalf, $8 billion was added for high speed rail and “higher speed” conventional rail, as well as nearly $1.5 billion for Amtrak.

Even the $27.5 billion ostensibly designated for highways was put largely into a funding category, the Surface Transportation Program, that can be used for transit, ports, and other transportation modes. About 30 percent of the money was assigned to metropolitan area planning agencies for allocation as they see fit. Congress resisted entreaties to require state Departments of Transportation to fix their worst highways and before building big, new projects. Even so, the requirement that the funds be spent quickly has meant that most DOTs are fast-tracking maintenance and rehabilitation, resurfacings, and bridge painting. These are the types of projects that can move without a lot of engineering and approval processes.

The bill also designates $8.4 billion for public transit capital projects. It was a bittersweet moment for transit supporters: Overjoyed at receiving the capital dollars at a moment when transit ridership was at a 50-year high, they were disappointed that there were no funds to preserve existing service in the face of economic devastation that was requiring major cuts in operations.

The 2010 Budget

If the stimulus debate sent mixed messages about the nation’s direction on transportation infrastructure, President Obama’s first full-year budget, for fiscal year 2010, seemed to give clearer indications of future priorities. The narrative in the budget overview emphasized investments that advance environmental sustainability, livable communities, and productive growth. It charted new territory by proposing to require more rigorous economic analysis and performance measures for transportation projects. The president’s budget document also linked cleaner transportation options like public transit to climate and air-quality issues.

President Obama also called for $25.2 billion to create and operate a national infrastructure bank through 2019. Like the Federal Reserve Bank, the infrastructure bank would operate under an independent board, evaluating and funding infrastructure of national significance, including water and sewer plants, public transit systems, roads and bridges, and affordable housing. The bank essentially would be a revolving loan fund, allowing transportation projects to be debt-financed. Most federal projects today are funded on a pay-as-you-go basis from gas tax receipts.

In a February 2009 interview President Obama said, “The idea [is] that we get engineers, and not just elected officials, involved in thinking about and planning how we’re spending these dollars …The needs are massive and we can’t do everything. It would be nice if we said here are the 10 most important projects and let’s do those first, instead of maybe doing the 10 least important projects, but the ones that have the most political pull.”

Not everyone in Congress loves the idea. Sen. Max Baucus, the Montana Democrat who chairs the Finance Committee, which would have a say on creating the legislation, has voiced opposition. “I think that bank idea will rob the future growth of the highway program and that will destroy the national scope of our highway program,” he said during an April hearing on transportation spending held by the Senate Environment and Public Works Committee. Baucus indicated that he believes that wealthier states would be better suited to compete for the funds, which would have to be paid back.

A New Direction for the U.S. DOT

At the Department of Transportation, Secretary Ray LaHood--the former Illinois congressman who was the second Republican in the administration--came into office promising to promote “livability” as the watchword of his tenure. 

“The era of one-size-fits-all transportation projects must give way to ones where preserving and enhancing unique community characteristics, be they rural or urban, is a primary goal rather than an afterthought,” LaHood said at his Senate confirmation hearing.

He followed that with a joint announcement with Housing and Urban Development Secretary Shaun Donovan that the two departments would begin to coordinate on transit planning and housing development, and that they would examine federal rules that either promote or thwart the creation of walkable neighborhoods. Smart growth principles would animate this initiative, the two said. They aim to build affordable housing near public transportation, create shorter neighborhood street blocks to promote walking, and expand bus routes to reach more areas.

Reviving Rail Networks

On April 16, with LaHood and Vice President Joseph Biden by his side, President Obama pulled back the curtain on his vision for a revived rail network for America, including development of high speed passenger rail lines in at least 10 regions. This would be the first such transnational effort since the Interstate Highway System was launched in 1956. To jumpstart the project, he said that he would add $1 billion a year for five years to the $8 billion to be spent in two years under the stimulus bill.

In announcing the plan, he noted that clogged highways, struggling airlines and overburdened airways, along with uncertain energy costs and the need to reduce oil consumption, threatened the long-term viability of intercity travel in the United States.

“What we need, then, is a smart transportation system equal to the needs of the 21st century,” the president said, “a system that reduces travel times and increases mobility, a system that reduces congestion and boosts productivity, a system that reduces destructive emissions and creates jobs.”

The administration plan outlined 10 corridors that have passed muster in various studies: a northern New England line; an Empire line running east to west in New York State; a Keystone corridor in Pennsylvania connecting Philadelphia and Pittsburgh; a Chicago hub network; a southeast network connecting Washington, D.C., to Florida and the Gulf Coast; a Gulf Coast line extending from eastern Texas to western Alabama; a corridor in central and southern Florida; a Texas-to-Oklahoma line; a Portland-Seattle-Vancouver corridor in the Northwest; and a California corridor from San Francisco to Los Angeles that was part of the voter-approved financing initiative last fall.

“Imagine whisking through towns at speeds more than 100 miles per hour, walking only a few steps to public transportation, and ending up just blocks from your destination,” President Obama said. “It is happening right now; it’s been happening for decades. The problem is, it’s been happening elsewhere, not here.” He noted that Japan, France and Spain all were ahead of us. But, he added: “There’s no reason why we can’t do this.”

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