Federal budget proposals, especially preliminary ones, are written in sand. Given the new Republican majority in the House, President Obama's 2012 budget proposal last month is even less permanent than that. Realistically, it's a safe opening gambit in a game where each side will try to grab the high ground of deficit reduction, and the final budget that eventually gets hammered out will almost certainly be quite different.
One of the key elements in the proposal, though, is the President's commitment to a six-year transportation bill that sharply increases spending for infrastructure. It also formalizes his proposal for the creation of an infrastructure investment bank as a long-term funding mechanism for major transportation projects, and renews his call for an immediate $50 billion in infrastructure spending to jump-start job creation.
This shouldn't come as a surprise. After all, President Obama made rebuilding our transportation network a major theme in his State of the Union address in January.
In theory, this proposal should have been greeted with cheers from many quarters. The deteriorating condition of our transportation network and increasing congestion of our highways have been a major focus of criticism by groups as varied as the American Trucking Assns., the U.S. Chamber of Commerce and the Environmental Defense Fund.
Instead, the bricks started flying within hours of the budget proposal's release. And like every other political issue these days, the complaints all involved questions of how to pay for it.
The budget proposal puts a $556 billion price tag on the six-year transportation bill, $107 billion in the first year alone. Funding for all transportation infrastructure investment is supposed to come from the federal fuel tax, which the Congressional Budget Office estimates will raise $230 billion over that six-year period. Critics like ATA president & CEO Bill Graves want to know where the other $326 billion will come from in this time of growing deficits.
In the past, ATA has supported raising fuel taxes to fund highway spending, as has the usually tax-adverse Chamber of Commerce. But this time the President's plan sets aside 10% of the six-year spending for creation of high-speed rail and another $30 billion to start the infrastructure bank. To ATA, that's siphoning off highway tax money to pay for non-highway projects. Reiterating ATA's call for “massive long-term investments in transportation,” Graves slammed the new budget proposals, saying they “beg the question of who is going to pay for it and what are they paying for.”
This is probably negotiation posturing as lobbying groups prepare for the real budget fight ahead, but it strains credulity when you call for increased transportation investment and then complain when it's proposed. Even the rail opposition is hard to defend when you've been so focused on highway congestion in recent years and been asking the government to reduce traffic so commerce can move.
As a preliminary budget, the President's proposal seems to be an extremely positive sign that his administration recognizes the importance of our national transportation network and is willing to start rebuilding it after years of neglect. If trucking is, as it has said repeatedly, ready to step up and pay for that reinvestment, here's the opportunity to put those words into action.