Thursday, July 7, 2011

The House and Senate Transportation Budget versions, but HSR appears to be missing.

In reading articles like these, one gets the impression that the Transportation Budget Bill is in for a lot more confrontation politics.  Apparently, today's press release about the House version does not indicate the status of HSR.  It has been said that this would be dealt with "later." 

The chaos and confusion never end.  Boxer wants a two year bill. Mica wants a six year bill. Boxer wants a national infrastructure trust; like a lending bank. Mica wants each state to have their own.  Either way, with these 'lending' entities, decision-making is supposed to be more in the hands of experts than in the hands of Congress.

One big issue, as William Grindley constantly reminds me, is the pay/go requirement.  That means there can be no funds in a budget that don't have a specific source identified.  Where that leaves HSR, which has had no such support up to now, is one more open question. 

Dueling Transport Bills Loom
Boxer and Mica Not on Same Page
Thursday, July 7, 2011
By Dennis Moore and Patrick Temple-West

WASHINGTON — Leaders of the House and Senate transportation committees are preparing two significantly different bills to reauthorize highway and transit programs after the current law expires on Sept. 30.

Sen. Barbara Boxer, D-Calif., chairwoman of the Senate Environment and Public Works Committee, and Rep. John Mica, R-Fla., chairman of the House Transportation Committee, are nowhere near each other on the amount of money they want the federal government to spend on transportation or on how many years to provide funding.

At a press conference on Wednesday, Boxer told reporters her committee would finish writing a two-year, $109 billion bill in "a couple of weeks." She is positioning her plan as a jobs bill.

"Congress must decide in the coming days which path to choose: protect jobs and put people to work, or throw hundreds of thousands of people out of work in a sector that has suffered enormously during the recession," Boxer said. Half a million construction jobs would be lost if Congress passes the transportation spending cuts proposed by lawmakers in the House, she added.

Boxer says her $109 billion bill will maintain current funding but will fall short of the $12 billion of revenue needed to pay for it over the two years. The gap would occurs, in part, because of insufficient revenues in the Highway Trust Fund.

Boxer said she is negotiating with the Senate Finance Committee, chaired by Sen. Max Baucus, D-Mont., on where to find the extra money. She told reporters that the wind-down of the wars in Afghanistan and Iraq, which cost $12 billion a month, could fill the gap.

Meanwhile, Mica met with reporters the same day to preview the six-year bill he plans to roll out Thursday, which he says "goes in the opposite direction" from Boxer. Mica said his bill would propose spending backed mostly with $35 billion of annual revenue from the Highway Trust Fund. The $35 billion would be almost $2 billion less than the projected revenue of the fund, according to the Congressional Budget Office.

Mica said that while Boxer favors a national infrastructure bank, he plans to propose funding for state infrastructure banks, so states "don't have to come on bended knee to Washington for approval." The state banks would be allowed to join together for cross-border projects.

He said he will submit recommendations for other revenue-raising measures to the House Ways and Means Committee, but declined to be specific or say if they will include a proposal for Build America Bonds that would be issued solely to finance transportation projects.

"I have to deal with the cards that are dealt to me," Mica told reporters. But his political hand may not be strong. He was set to meet with House Republican leaders later in the afternoon. The transportation bill has already been left off the list of things that Majority Leader Eric Cantor wants to do before September. GOP leaders may want further changes in Mica's proposals.

"Everything hinges on the House leadership and how they handle it in face of all their other priorities and not add to the deficit," according to Ken Orski, who publishes Innovation NewsBriefs on transportation.

The one area of agreement between Boxer and Mica is that the Transportation Infrastructure Finance and Innovation Act program should be expanded. They each propose providing $1 billion per year to TIFIA, which Mica said could be leveraged to provide up to $120 billion for construction projects over six years.

The Boxer and Mica proposals fall far short of President Obama's fiscal 2012 budget proposal for a six-year, $500 billion transportation program.

Money is the problem in putting together a transportation bill. It just isn't there.

"I don't think there's any consensus on the revenue provisions and how to fund it," said Melissa Loesburg of ISI Group's Washington watchers.

Gasoline tax receipts are falling and won't provide the Highway Trust Fund with enough to finance the current level of transportation spending. And it's politically impossible to raise the gas tax.

Actual transportation spending for 2011 has been authorized at $52 billion. Using just the trust fund revenues, annual spending would fall to $36.9 billion. But some money has come from general revenues, especially from the stimulus law.

Orski questions the focus on current spending. "The last two years have been way out of scale with what occurred earlier," he said. Returning to pre-stimulus spending levels, "while not insignificant, would not be catastrophic."

The whole political calculus of transportation spending has changed, according to Deron Lovass, transportation policy director at the Natural Resources Defense Council. "The way this bill traditionally moves, it's a big investment bill," he said. "There's money in it that provides for additional capacity and there's enough money in it to make all 50 states or at least most of them happy."

Now, the math doesn't add up. There's not enough money to keep everybody happy.


House GOP Offers $210 Billion Transport Bill
R.G. Edmonson | Jul 7, 2011 8:12PM GMT
The Journal of Commerce Online - News Story
Mica says plan would 'do more with less,' leverage spending

House Republicans on Thursday unveiled a $210 billion, six-year surface transportation bill they said could be leveraged to $450 billion, setting up a showdown with highway advocates and Democrats who say the tight spending shortchanges infrastructure and the American economy.

The bill would give greater authority and flexibility to states in the way they spend federal highway money, reduce by half the time it takes to complete projects and reduce the bureaucracy at the U.S. Department of Transportation.

It also would carry less spending upfront than other plans circulating in Washington, and come in about three-quarters the size of the last surface transportation reauthorization plan.

Rep. John Mica, R-Fla., chairman of the House Transportation and Infrastructure Committee, said rules the House adopted in January require the committee offer a bill that would spend only the annual revenue of the Highway Trust Fund, between $30 billion and $35 billion.

“But we can do a lot more with a lot less,” Mica said.

By his “back of the envelope” calculations, the trust fund money would have a multiplier effect when invested in the Transportation Infrastructure Finance and Innovation Act and Rail Rehabilitation and Improvement Financing loan programs. He said he planned to testify before the House Ways and Means Committee about finding new sources of transportation revenue.

Mica said the existing revenue stream would be enhanced by savings accrued in getting projects done faster. Projects that now take as long as 15 years from inception to final construction could be completed through concurrent reviews by federal oversight agencies, and relaxing environmental regulations. In particular, Mica said the bill exempts projects on existing right-of-way from mandatory environmental review.

“This is not a highway bill, this is a multimodal bill,” Mica said.

The bill proposed $1 billion a year for TIFIA, that will yield $60 billion in low interest loans to fund $120 billion in transportation projects. RRIF will be improved through a faster and more predictable loan application process and flexibility in loan terms.
The bill also includes for the first time provisions for marine transportation. Expenditures from the Harbor Maintenance Trust Fund would be linked to revenue, and the funds will be used only for harbor and channel dredging.

The bill would encourage domestic shipbuilding through expansion of the Capital Construction Fund, and eliminate the Harbor Maintenance Tax for domestic shipping.

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