Streetsblog Capitol Hill

The CBO's projection of the HTF transit account's tumble into insolvency, from February 2013. Image: CBO

President Obama’s transportation budget proposal can give you a contact high if you stand too close. The prospect of budget surpluses — in the near-term, at least — is intoxicating. And the source of those surpluses — from Overseas Contingency Operations — is a hallucination.

The Congressional Budget Office, in its invaluable “just-the-facts” way, released its analysis Friday of the implications of the president’s budget proposal for transportation [PDF]. The long and the short of it is this:

• The fund gets a long-awaited name change to Transportation Trust Fund.
• Instead of falling into insolvency in fiscal year 2015, the highway account would go broke in 2021. The transit account stays solvent under Obama’s proposal through at least 2023 — the last year the CBO contemplates.
• A rail account is added to the trust fund for the first time, bringing Amtrak into the fold of the surface transportation program.

Under the president’s proposal, both highway and transit spending would decline after 2021, when the surplus money runs out.

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All government forecasts predict far more driving than even the most conservative scenario envisioned by U.S. PIRG and the Frontier Group. Image: A New Direction

The driving boom is over.

After decades of steady growth, U.S. driving rates have stagnated and even fallen. Per capita driving is as low as it was in 1996. And yet, federal and state government estimates continue to predict inexorable growth, relentlessly building expensive new highways for drivers who might not materialize.

A groundbreaking new study from U.S. PIRG and the Frontier Group shows that any of three likely scenarios for future U.S. driving trends show far lower vehicle miles traveled than any of the principal current government estimates. That creates a disconnect between the kinds of transportation Americans are choosing with their feet and the kinds of transportation the system is designing for them.

Transit ridership is rising steadily – Americans took 10 percent more transit trips in 2011 than in 2005 – yet more than half of U.S. transit systems have been forced by budget constraints to either raise fares or cut service – or both – since the beginning of 2010. Meanwhile, although Americans are showing a flagging interest in automobile travel, states are breaking the bank to build shiny new roads.

Here are the three possible future scenarios for driving behavior that authors Phineas Baxandall of U.S. PIRG and Tony Dutzik of the Frontier Group laid out:

Back to the Future: This scenario assumes that the decline in driving is a temporary “blip,” largely due to the economic recession, and not a lasting trend. It assumes driving rates will soon pick right up where they left off. In this scenario, driving rates by age cohort and sex return to 2004 levels by 2020 and continue marching upward.

Enduring Shift: Under this scenario, the last decade’s shift in driving behaviors is real and lasting, with people continuing to embrace different forms of transportation and more compact communities. Gas prices stay high, the economy bounces back without leading to a huge jump in VMT, and the digitally-connected world continues to reduce the need for travel. This assumes each age and sex cohort keeps driving at lower rates than the same cohort did in previous generations. “For example, if 20 year-old males in 2009 drove 20 percent less than 20 year-old males did in 2001, it is assumed that eleven years later in 2020 they will similarly drive 20 percent less than 31-year-old males did in 2001,” Baxandall and Dutzik write.

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The Highway Trust Fund is expected to slip into negative territory in 2015. Estimates are based on CBO's February 2013 baseline projections. Image: CBO

MAP-21 expires in a year and five months. When it does, if lawmakers haven’t already found a solution to the “transportation fiscal cliff,” they’ll have to do one of three things, according to a report issued last week by the Congressional Budget Office [PDF]:

• Transfer $14 billion more in general funds
• Raise the gas tax by 10 cents a gallon
• Cut the authority to obligate funds in 2015 from about $51 billion projected under current law to about $4 billion

“If lawmakers chose to wait until fiscal year 2015,” wrote CBO analyst Sarah Puro, “at the expiration of MAP-21, to reduce spending, those cuts in 2015 would need to total about 92 percent for the highway account and 100 percent for the transit account.”

It couldn’t be clearer. Congress has to stop dithering and start working on a revenue solution, stat. Oh, and the president and his new secretary of transportation have to get behind it, guns blazing.

Congress has three potential vehicles for a revenue solution: 1) a “grand bargain” on the deficit, the sequester and the fiscal cliff, 2) tax reform, and 3) the next surface transportation bill.

And what will that “revenue solution” be? The simplest, most easily implemented fix is a gas tax hike, but over the long term, taxing fossil fuels as a way to pay for transportation infrastructure just won’t cut it.

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From the beginning of today’s hearing, Republicans on the House Appropriations Committee made it clear they weren’t going to let Transportation Secretary Ray LaHood’s last appearance before them be an easy one. While the hearing’s purpose was to examine the department’s budget request, the tough questions LaHood fielded on the budget were nothing compared to the fight one lawmaker picked about the Columbia River Crossing.

Rep. Jaime Herrera Beutler wants to take light rail out of the Columbia River Crossing.

Transportation Appropriations Subcommittee Chair Tom Latham derided the administration request for $50 billion for “immediate transportation investments” as “a proposal we’ve seen three times before” which, like the 2009 stimulus package, is “not paid for or offset by reductions elsewhere.” He dismissed the plan to pay for transportation with war savings as “dubious,” saying, “Many members hope that the drawdown of our forces in Iraq and Afghanistan will provide an opportunity to reduce spending and the deficit, and not serve as excuse for even more spending.”

LaHood told Latham he “can’t have it both ways.”

“The first two years I was in this job you all criticized us for not coming up with a way to fund transportation,” LaHood said. “For the last two years, after receiving criticism for the first two years, for no funding, we’ve come up with a funding mechanism.”

Even worse than defending a gimmicky pay-for, LaHood tied himself in knots promising the U.S. DOT “has never promoted building anything to get anywhere faster.” He defended this position when it came to the Columbia River Crossing in the Portland area, which Rep. Jaime Herrera Beutler raked him over the coals for, and even for high-speed rail, which he pledged was not actually about increasing speeds. A weird position, indeed.

Latham noted that the administration budget proposal included $40 billion for rail and wondered when the administration might send over a draft proposal of the rail reauthorization those numbers are based on. He reminded LaHood that the administration never actually sent a draft surface transportation reauthorization.

LaHood tried to turn the tables on Latham, saying the president was busy with guns, immigration and the sequester, and when Congress does its work on those three issues, Obama will bring out his bold plans for transportation. LaHood has made this argument before, and it’s one I find perplexing. Isn’t that why there are Cabinet secretaries, with thousands of people working under them? No one at DOT is working on guns and immigration, but I bet someone there has a pretty good handle on their plans for the next rail bill.

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Sen. James Inhofe has always said that, although he’s one of the most conservative members of the Senate, he’s a “big spender” on two things: national security and infrastructure. An influential conservative group appears to be humming the same tune.

The ACU's Alberto Cardenas has had a big-spender conversion, thanks, perhaps, to deep-pocketed friends in the transportation industry. Photo: Univision

The American Conservative Union is the 50-year-old organization behind the annual Conservative Political Action Conference (CPAC) and a highly influential rating system for members of Congress. The group’s new effort, the American Strength Program, is dedicated to lobbying Congress to increase spending – words they must have trouble getting their mouths around – on transportation and defense. Their interest in transportation appears to stem from their belief that transportation helps “foster personal freedom” by “facilitating a robust market economy.”

“While it is part of our heritage to question the role and size of government,” reads the group’s proposal, “defense and transportation infrastructure activities are national in scope and require federal leadership and investment.” The proposal was published last week by the New York Times, which broke the story.

The ACU plans to build conservative leadership around the issue to educate Congress and the public, and it plans to start including infrastructure votes in its legislative scorecards. That’s a huge shift – for the “gold standard” of conservative accountability for lawmakers to start rewarding votes for spending and punishing excessive attention to deficits.

This group would have come down harshly on House Republicans in 2011, for example, when they tried to cut transportation spending by a third to keep expenditures in line with revenues. Despite the fact that their actions were motivated by a desire for fiscal conservatism, those lawmakers would have gotten dinged on their conservative ratings for such a move.

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In order to “address our insolvent transportation program and end the taxpayer bailouts of the Highway Trust Fund,” Rep. Scott Garrett (R-NJ) has introduced a bill to let states “opt out” of the federal transportation program altogether.

Rep. Scott Garrett's own state would likely not do well under his plan to hand states the reins on transportation funding. Photo: Pete Marovich/Zuma via Mother Jones

In true devolutionist fantasy style, Garrett says he wants to give states the option to forgo their transportation allocations and keep the 18.4 cents per gallon that now is charged as a federal tax.

It harkens back to the old griping from “donor” states that they pay more in gas taxes than they get back in formula funds, only there’s no such thing as a donor state anymore because of the constant stream of federal bailouts. Garrett says that’s the target of his bill.

“For our children and our grandchildren’s future, we must put an end to Washington bailouts,” said Garrett upon introducing the bill. “On top of the bailouts to the banks and car companies, the hardworking American taxpayers have bailed out the Highway Trust Fund no less than three times over the last five years. It must stop.”

Garrett’s press release also notes that MAP-21 provided for $18.8 billion more from the general fund in 2013 and 2014.

He says letting states opt out of the federal program would “free up states’ transportation dollars from federal micromanagement” – though MAP-21 gave states an even longer leash than they’d asked for.

Giving states sole authority over the nation’s infrastructure is a funny way to “solve” the infrastructure funding problem. First of all, the recession has been brutally hard on states, forcing cuts to just about every program, no matter how essential. Second, virtually all states are constitutionally bound to balance their budgets. Maybe that’s Garrett’s big idea – states can’t run up deficits like the feds can, so let the states handle it. That’s a recipe for either massive cuts in infrastructure spending – fresh on the heels of the latest D+ from the American Society of Civil Engineers – or tax hikes.

Garrett’s bill is almost definitely going nowhere (he introduced the same bill two years ago, and it died without any serious consideration), but it would be interesting to consider what would happen if his home state opted out of the federal transportation program.

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So, right now you’re thinking, “God save me, not another post about the budget!”

Sen. Patty Murray proposes $100 billion for transportation in her FY 2014 budget. Photo: Puget Sound Business Journal/Kent Hoover

And you’re to be forgiven. There are two versions of the FY 2013 budget out there right now (House and Senate), for a year that’s half over. There are the budget cuts from the sequester that everyone’s still waiting to feel the full impact of. Rep. Paul Ryan, chair of the Budget Committee, put out his FY 2014 blueprint Tuesday. And Wednesday, Senate Budget Committee Chair Patty Murray (D-WA) rolled out her budget proposal. Considering how dysfunctional every single one of these budget processes is, it’s no wonder we plug our ears at more budget news.

But there is a silver lining: Murray’s budget, which her committee approved yesterday, contains a $100 billion “targeted jobs and infrastructure package” that would focus on transportation.

It includes $50 billion to create jobs repairing “our nation’s highest priority deteriorating
transportation infrastructure” — fixing roads, bridges, and airports, and also “updating”
mass transit systems, which could mean more than just state of good repair. She notes that a 21st century transportation system includes “road projects that make room for bicyclists and pedestrians, bridge projects that include transit as well as cars and trucks, and regional plans that require multiple jurisdictions to work together.” She also mentions that transit is essential, as “building more roads alone will not solve the nation’s congestion challenge.”

Murray’s proposal also creates an infrastructure bank to leverage private sector investment, seeded at $10 billion, as Sens. Frank Lautenberg and Jay Rockefeller recently proposed, and as former Sens. John Kerry and Kay Bailey Hutchison had also proposed.

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“In 2014, federal investment in surface transportation — which is currently about $50 billion per year — will drop to $6 billion or $7 billion. In one year.”

Rep. Peter DeFazio says underinvestment in transit is killing people, and it's about to get way worse.

Those were the dire words spoken by Rep. Peter DeFazio (D-OR) at the start of this morning’s Transportation & Infrastructure Committee hearing on MAP-21. What he meant was this: At the end of MAP-21, the Highway Trust Fund is expected to have a balance of almost zero and a $7.1 billion shortfall in 2015. Congress would have to radically reduce FY 2015 highway and transit investment levels to ensure that the trust fund remains solvent. According to AASHTO, federal highway investments would have to be cut from approximately $41 billion to $6 billion and transit investment from $11 billion to $3 billion.

“That is pathetic,” DeFazio said. “And we have to do something about it.”

Funding Cuts Force FTA to Break Agreements

T&I Chair Bill Shuster agreed. “That’s our biggest challenge moving forward,” he said. And Ranking Democrat Nick Rahall added that the sequester cuts and Congress’s inability to pass a real budget has compounded the funding crisis.

FTA Administrator Peter Rogoff warned that the cuts will have a profound impact on transit projects around the country:

Overall, the sequester struck $656 million from FTA’s budget. It reduced program funding for our [New Starts] capital investment grants program by almost $100 million. This will means that few, if any, New Starts construction projects will be fundable in the near term.

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If you were hoping the Senate would swoop in and save the day after the House voted to cut $785 million from the transportation budget, you might be disappointed. Politico’s Burgess Everett reports that Senate Appropriations Chair Barbara Mikulski (D-MD) isn’t planning to present an alternative transportation budget proposal. Mikulski is considering rolling several appropriations bills into a “hybrid” continuing resolution bill, but transportation isn’t one of them.

Sen. Barbara Mikulski isn't planning to introduce a transportation budget to compete with the one the House passed.

Why not include transportation in her CR? Sounds like she thought transportation was just too controversial. “Some people in the House don’t like bills that help transportation, some don’t like high speed rails, some don’t like a lot of things,” she told Politico. So what are the non-controversial items she’s planning to work on? “Agriculture, commerce-justice-science, homeland security, defense and military construction,” says Everett.

Meanwhile, Everett also reports that House Transportation Appropriations Subcommittee Chair Tom Latham (R-IA) is trying to make sure the Democrats don’t try any funny stuff. Since Congress can never agree on a budget anymore, they keep passing the previous year’s budget and agreeing not to make too many changes, because arguments over the changes will gum up the works.

Of course, the Republicans just made a change not just to the previous year’s budget but to the delicate compromise of the transportation bill. But if the Democrats try to just start fresh and pass a real budget for the rest of FY 2013, Latham has a poison pill in store for them: another ban on funding California high-speed rail. No matter: as Everett reports, “California doesn’t need any money for two years and was unlikely to get any federal help in the last six months of this year anyway.”

In any event, no one seems to have much appetite for a real budget fight anyway. They fight enough over these “easy” CRs.

Tuesday morning, Rep. Earl Blumenauer took his usual place behind the podium at the National Bike Summit. (He never misses a Bike Summit.)

Rep. Earl Blumenauer never misses a Bike Summit. Photo: Brian Palmer

“I’m coming up this morning and smiling at someone going past me on the bike lane on Pennsylvania Avenue,” Blumenauer said. “Remember four years ago, I talked about risking my life on Pennsylvania Avenue. And I talked from a podium not unlike this and said, ‘Maybe we could just put bike lanes on Pennsylvania Avenue.’ Some of you clapped; others of you said, ‘I agree, but not in my lifetime.’ [Four] years later: It’s there, it’s a fixture, it matters to people. And it’s part of the renaissance in our nation’s capital.”

Blumenauer encouraged the 750 assembled cycling advocates to be “proud and modestly aggressive” in driving home the point that cycling infrastructure creates good, family-wage jobs. Safe Routes to School “gives us an opportunity to reduce [congestion during] the morning commute 30 percent and not have so many morbidly obese fourth graders,” he said.

Summit participants were already planning to spend the next day on Capitol Hill, talking to members of Congress and their staff about increasing federal support for cycling programs. But Blumenauer told them not to stop there — they should be lobbying even harder when the members are at home, and the district staff are trying to fill their schedules with events that will put them face-to-face with constituents. Inviting them out for a ride to try out a trail that was made possible by federal funds would be a good way of showing them the concrete (and asphalt!) benefits of programs like TIGER and Transportation Enhancements (now Transportation Alternatives).

Another member who made the trip up Pennsylvania Avenue to speak to the Bike Summit was Sen. Ben Cardin, who solidified his standing as Bike Hero when he fought for the Cardin-Cochran amendment, which preserved some local control over bike/ped funds, even as dedicated funding was stripped out of the federal bill.

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