As you may know, there are two Transportation Re-authorization Budget bills in the Congressional pipeline, one from the House and one from the Senate. They House bill, under John Mica's Chairmanship of the Transportation Committee, contains no funding for HSR.
While the Senate Transportation Budget Bill does contain railroad funding, led by Senator Boxer, it is not funding that is covered by the Highway Trust Fund, and therefore, those proposed expenditures are "uncovered" without an identified source of revenue. Uncovered funds are unacceptable to the Republicans, who, although a minority in the Senate can prevent passage of this Transportation re-authorization. Remember, the Senator Boxer is from California and a high-speed rail advocate.
Ken's newsletter article will give you some of the details.
As Ken Orski puts it: Nor did the Committee include funds for Amtrak or for President Obama’s favorite initiative — the High Speed Rail program. Where is the extra money to come from?
The answer to that question is presently unclear. It's far too early to pop the champagne. Although Orski points out that there is "widespread skepticism about the bill's chances of gaining political momentum," we have a long way to go in the Senate, and whatever passes there needs to be reconciled with the House version in a joint-committee process.
Anyway, Ken's reports are always appreciated comments on the government process and as we always say on this blog, what's happening in Washington is the prime determiner of what will happen with high-speed rail in California, and in the rest of the United States.
Meanwhile, the Chinese high-speed train wreck has been filling the news media world-wide. This was an accident waiting to happen. There have been a series of HSR mishaps in China and at the same time there have been flagrant violations of rules by the trains organizations building and operating high-speed and other trains in that country.
The message for us in the US ought to be clear. The Chinese are not reliable manufacturers or operators of high-speed rail, and we have no business in the US buying their hardware or services. That's only an invitation to disaster. Of course, all that presumes that we are proceeding to build high-speed rail systems in the United States, and that is by no means assured, fortunately.
Vol. 22, No. 20
July 25, 2012
The Senate Transportation Bill Lacks Political Momentum
The release by the Senate Environment and Public Works (EPW) Committee of its reauthorization proposal and its July 21 hearing on "Legislative Issues for Transportation Reauthorization" were greeted with a muted reaction. Despite Sen. Boxer's official optimism, we have encountered widespread skepticism about the bill's chances of gaining political momentum.
The opening remarks by Ranking Member Sen. James Inhofe (R-OK) at the July 21 hearing explain why the Committee was able only to publish an "outline" of its proposed highway bill. "Before we proceed to mark up," the Senator stated, " I must insist that the Finance Committee has identified a bipartisan way of filling this hole [in funding]. It is unwise to push an unfunded proposal to spend over $100 billion at the same time the nation is singularly focused on cutting trillions of dollars in spending. If we proceed before we have identified funding, we will lose Republican support and kill the bill for this Congress, doing irreparable harm in the process."
Filling that "hole" may prove to be a daunting task. The Highway Trust Fund is expected to receive no more than $75 billion in tax revenue over the next two years (FY 2012-13) according to the Congressional Budget Office (CBO). That would leave a shortfall of $34 billion in the $109 billion program proposed by the Senate EPW Committee. The Committee partially solved this dilemma by drawing down the $21.7 billion balance expected to be left over in the Trust Fund at the end of FY 2011 ($14.8 billion in the Highway Account and $6.9 billion in the Transit Account, according to CBO). But this still left an unfunded shortfall of $12 billion. Nor did the Committee include funds for Amtrak or for President Obama’s favorite initiative — the High Speed Rail program. Where is the extra money to come from?
Sen. Boxer has bravely asserted that "we will find a way to pay for this bill" while the EPW Outline states that this will be done "in a way that does not increase the deficit." This poses a challenge for the Senate Finance Committee which has the ultimate responsibility for funding the bill and which will be under pressure to limit deficit spending in the wake of the debt ceiling negotiations. Sen. Orrin Hatch's remarks at a May 17 infrastructure financing hearing suggest that the Senate Finance Committee will come under heavy pressure from the Republicans on the committee (and in the Senate at large) not to fund the transportation program "in excess of our ability to pay for it" in the words of the Ranking Member of the Finance Committee.
All this, plus the fact that the Senate Banking and Commerce committees have yet to draft their portions of the bill, casts doubt on the bill’s chances of gaining an early approval by the full Senate, not to mention its chances of surviving intact a House-Senate conference.
Observers are not losing hope of seeing a surface transportation reauthorization enacted during this session of Congress, but any such action will require a willingness by the Senate to make serious concessions. The House may be expected to insist on a longer-term bill and on ensuring that Congress "does not spend money it does not have." A two-year bill, it will be argued, deprives states of the certainty they require for planning large-scale infrastructure investments, without offering any assurance that the fiscal and political environment two years down the road will allow for a more generous funding of the transportation program.
Judging by the progress of the ongoing debt ceiling negotiations, arriving at a congressional compromise could turn out to be a long and painful process.
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