September 2011

Job Pressures Beginning to Drive Rail Transit Agenda

by Cliff Henke

Photo Courtesy Denver RTD.

Photo Courtesy Denver RTD.
After years of languishing in policy limbo, with a series of short-term extensions to federal law supplemented by stimulus legislation, both the Administration and Congress are showing slight movements in favor of a longer-term surface transportation bill. In a policy area that was considered noncontroversial and bipartisan, this area had been politicized as well. Now, both sides appear ready to deal, driven by major components of each party's traditional constituent base; business in the case of the Republicans and labor in the case of the Democrats.

Both sides now appear to have rediscovered the job-creation effects of transportation infrastructure spending, including on rail transit projects. From the stimulus bill to a proposed infrastructure bank to record levels of New Starts budget requests, the Administration, of course, has long acknowledged this connection, but had appeared unwilling to fight for such spending. Indeed, during the budget deal avoiding government shutdown this past spring as well as in the recent debt negotiations, the president was willing to allow unobligated New Starts and Recovery Act funds to be sacrificed.

In a press statement prior to the president's jobs speech to a joint session of Congress, House Majority Whip Eric Cantor (R-Va.) floated a proposal to eliminate the 10 percent set aside for enhancements in federal surface transportation funding. Such funds typically go to bicycle paths and pedestrian walkways as well as "museums, education and preservation," Cantor charged. Scrapping that provision, he proposed, would "allow states to devote these monies to high-priority infrastructure projects, without adding to the deficit."

At least some cooperation?
While there is no new money in Cantor's announcement, it does represent an encouraging acknowledgment that transportation spending can generate jobs and jump-start economic activity. After all, why bother streamlining rules for transportation investment if it's ineffective anyway?

For his part, President Obama issued a memorandum directing five federal departments, including the U.S. Department of Transportation (U.S. DOT), to come up with up to three projects per department that could be fast-tracked through environmental approvals and other hurdles. Priority will be placed on the number of jobs that can be created quickly.

The memo also instructs these agencies to implement new measures to improve accountability, transparency and efficiency through the use of information technology for each selected project. By Dec. 1, 2011, the memo says that these departments must launch the pilot phase of an online "dashboard" to provide the public information about the status and progress of the priority projects. By the end of 2011, the federal government must deploy, at one or more transit agencies, technology tools that have "significant potential" to reduce the time and cost to complete permitting and environmental reviews.

Meanwhile, President Obama warned Congress, in one of his weekly radio addresses as well as a number of speeches in August and early September, that such small steps toward bipartisan infrastructure policy cooperation could be reversed by failure to enact another extension to the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU). Acknowledging the need to avoid similar avoidable crises that gave rise to both the debt debate as well as the Federal Aviation Administration shutdown in August, House Transportation and Infrastructure Committee Chairman John Mica (R-Fla) said that he would support another short-term SAFETEA-LU extension beyond the current one's Sept. 30, 2011 expiration, but it might be the last one that he would support. Significantly, any extensions past this expiration, whether short-term or in the form of a longer-term bill, must also extend most of the gas tax because it, too, was scheduled to expire at the end of September.

"If we allow the transportation bill [and most of the gas tax] to expire, over 4,000 workers will be furloughed without pay," Obama said. "If it's delayed for merely 10 days, we will lose almost $1 billion in highway funds. That's money we can never get back. That's just not acceptable. It's inexcusable to put more jobs at risk in an industry that's already one of the hardest hit in the last decade."

"No one has suggested that the highway bill will be allowed to expire," said Speaker of the House John Boehner's (R-Ohio) spokesman Brendan Buck in a statement, calling the president's remarks "scare tactics."

"Republicans support an extension of the highway bill and appreciate the need for a long-term solution for infrastructure projects," Buck added. This was a departure from comments made by key Republican ally Grover Norquist, founder and leader of Americans for Tax Reform and famous for his "taxpayers' pledge" that every Republican member of the House and Senate has signed for decades, and its contradiction by President H.W. Bush's economic program, which partly led to the first Bush's defeat by Bill Clinton.

An early test of the newfound sentiment for cooperation, at least in the short term, will be another federal aviation extension of current law that is set to expire in mid-September. Although Chairman Mica has expressed willingness to do another one, he said he would have to talk to his leadership in the House first.


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