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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How long, how much?
The real issues, however, are what kind of longer-term bill will come forward, and particularly, at what levels. House Republicans in their chamber's budget resolution voted for revenue-constrained surface transportation assistance at $28 billion annually, roughly a cut of one-third from existing levels. Sen. Barbara Boxer (D-CA), chair of the Senate's Environment and Public Works Committee, which has jurisdiction over highway authorization, commissioned a study of the impact of such cuts. It found that 800,000 jobs would be lost if this was the final funding level enacted in a long-term bill. Instead, she said her committee would mark up a bill that would keep funding at $109 billion over two years, roughly at current levels. The Senate Banking and Urban Affairs Committee, where any public transportation authorization is written in the Senate, is said to be in agreement, which puts public transportation funding at around $10 to $11 billion annually, of which around $2 billion would be in New Starts and Small Starts.

Rail projects, especially the New Starts/Small Starts program, are the most vulnerable in any budget cutting or lower budget proposals because the focus in all of these fights has been on discretionary spending. To bridge the gap between what the Mass Transit Account could fund, virtually all of the Major Capital Investment Program, including New Starts/Small Starts, was shifted in recent years to discretionary spending — and financed by the annual federal deficit.

However, to sustain those higher levels would require an additional $12 billion in revenues over a two-year period and nearly $20 billion over a full six-year authorization. Some sources indicated that Senate Finance Committee Chair Max Baucus (D-Mont.) found the required amount in reprogrammed revenues designed to fund provisions of the health care financing reform bill enacted last year, but others want the funding for their programs, so it is unclear if this proposal is even possible. If not, then more bailouts from the General Fund — and more deficit spending — would be required for any longer-term legislation to be passed.

Sen. James Inhofe (R-OK), the ranking member on the Senate Environment and Public Works Committee, has pointed out that the Administration has not sent a proposed authorization bill to Congress, the first time a president has failed to do so in the history of the Highway Trust Fund.         

"Ironically, President Obama noted the need to have a conversation about a long term highway bill," Inhofe said. "The question that must be asked is where has he been? But given Obama's record on infrastructure, maybe it's better that he has stayed out of the discussions."

The president proposed a $553 billion, six-year bill with his FY 2012 budget, but neither sent a companion bill to Congress nor a proposed funding source for this record amount. The budget and the proposal were rejected in both chambers earlier this year.

Transit vs. highways
As difficult as a lack of a longer-term surface transportation bill has been on public transportation, it has arguably been worse for the highway programs. Since 1995, 11 states got more road construction and repair money from the federal government than they raised from their own state or local sources. In only five states — Pennsylvania, New York, Virginia, Massachusetts, Delaware, and New Jersey — is the share of federal funds less than 25 percent of total roadway expenditures. By contrast, federal funding constitutes around 40 percent of total public transportation capital investment; state assistance and local funding, much of the latter in dedicated taxes, make up the rest. When operating funds are added, federal assistance comprises less than 15 percent of the total.

Transportation is a relatively significant portion of most state budgets, but most of it is for highway projects. At 7.9 percent of general state expenditures, transportation generally ranks third among state spending categories after education and public welfare. Of total capital spending on public transportation, states contribute 14 percent of the total in 2009, the most recent year for which data is available.

Still, Petra Todorovich, director of America 2050, a national initiative of the Regional Plan Association, called the House bill "a brutal cut that will certainly be felt around the region in jobs and in the condition of our roads, bridges and transit systems."

Real cooperation?
The conventional wisdom in Washington these days is that only recently has politics played into transportation policy, that it had always been bipartisan or nonpartisan prior to the divisive 112th Congress. A look at the facts, however, show that it has always been that way, or at least for much of the past half-century. Even President Eisenhower, hero of World War II, was opposed by his own party on the interstate highway program, initially. Only after defeat in the mid-term election of his first term and after no real progress on unemployment did Ronald Reagan agree to a gas tax increase and the first New Starts program funded with it. Only after a threatened merger of the transit program with highways and two government shutdowns did Republicans agree to the landmark Transportation Equity Act for the 21st Century in 1996.

If attempts at bipartisan cooperation on transportation policy fail this time, it won't be continuation of recent exceptions. Rather, it would be the historical rule.