Tag Archives: budget

Making a Good Budget Great

President Trump’s 2018 budget takes a meat cleaver to many federal programs. In my issue areas–transportation, housing, and public lands–it would end the Federal Transit Administration’s New Starts program; end funding for Amtrak’s long-distance trains; eliminate HUD community development block grants; and reduce funding for public land acquisition. There’s no high-speed rail or trillion-dollar infrastructure program, and nothing that suggests Trump would support federal funding for those things.

Trump calls this the “America First” budget. What it really is is a “Federal Funding Last” budget, as Trump proposes to devolve to state and local governments and private parties a number of programs now funded by the feds. In theory, the result should be greater efficiency and less regulation. However, in most of the areas I know about, Trump could have gone further and produced even better results.

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Obama’s Transportation Plan

President Obama’s latest transportation “vision” is as unrealistic as Governor Brown’s plan to pay for high-speed rail with cap-and-trade revenues. Obama proposes that Congress spend $302 billion on surface transportation over the next four years, or $75.5 billion a year. This is nearly $25 billion more per year than Congress is spending today, which is already $10 billion more per year than federal surface transportation revenues.

In the 2012 round of transportation reauthorization, the debate was whether to limit spending to actual revenues of about $40 billion a year or continue spending at historic rates of about $50 billion a year. Senate Democrats prevailed at the $50 billion rate, but only by agreeing to limit the bill to just two years instead of the usual six. That compromise expires this year just before the Highway Trust Fund runs out of money due to overspending.

In 2012, revenues (mainly from fuel taxes but also excise taxes on truck tires, trucks, buses, and trailers) in 2012 were $40.2 billion. By law, $5.0 billion of this was dedicated to transit. Congress actually spent $8.2 billion on transit while $41.1 billion nominally went to highways (but in fact some of this also went for transit and other non-highway programs). Spending increased by more than revenues in 2013 and 2014.

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Obama’s 2012 Transportation Budget

“The Obama administration’s embrace of high-speed rail . . . ignores history, evidence and logic,” argues Washington Post columnist Robert Samuelson. “The case against it is overwhelming. The case in favor rests on fashionable platitudes. High-speed rail,” he concludes, “is not an ‘investment in the future’; it’s mostly a waste of money.”

Yet Obama’s 2012 budget proposal, released yesterday, proposes to increase annual spending on high-speed rail by $8 billion. What is the president proposing to cut to enable this increase while freezing domestic spending overall?

The answer: housing. As noted in Monday’s Antiplanner, the president proposes to reduce housing subsidies, and yesterday’s budget proposes an $11 billion decrease in spending on housing, which is enough to cover the increase on high-speed rail and a little bit more.

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