Tag Archives: reauthorization

Having failed to pass a reauthorization bill, Congress has only a few hours to extend the current law, which expires on Saturday. On Tuesday, however, the House failed to pass a 90-day extension to the law. On Wednesday, it failed to pass a 60-day extension to the law.

Supporters of an extension are are making all kinds of dire predictions of what will happen if the law isn’t extended: states won’t get federal dollars, so they will have to cancel or postpone projects, which will put people out of work, etc. No doubt these claims are exaggerated: states typically borrow money and eventually repay it with their share of federal formula funds. A delay of a few days is not going to make much of a difference.

Curiously, the main opponents of an extension are Democrats who are holding out for the House to support the Senate bill. But, as Ken Orski describes in two articles, the Senate bill is unsustainable and Congress will have to face budget shortfalls by raising taxes, increasing deficit spending, or reducing spending.

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One of the special-interest provisions in the transportation bill that passed the Senate a couple of weeks ago is a requirement that operators of passenger trains be licensed by the Surface Transportation Board. There is one and only one exception: Amtrak.

Supposedly, this could give Amtrak an edge when it competes with other companies for contracts for local commuter-rail service. Since Amtrak has lost business to Veolia and other private rail contractors in many cities, some people think this provision was written to support Amtrak and the transit unions that represent Amtrak employees.

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It isn’t enough that federal control or funding has made Amtrak and the transit industry some of the least productive parts of the nation’s economy. Now they want to ruin the freight sector as well. That alone made it worthwhile to kill the bill.

After fiscal conservatives successfully scuttled a House transportation bill that would have ended pork and allowed Congress to minimize deficit spending, the Senate has passed a bill that is full of pork and will practically mandate deficit spending. The good news, such as it is, is that the bill only reauthorizes federal spending for two years, meaning–if the House passes a similar bill–the whole debate can begin again in a year-and-a-half.

The Washington Post calls this bill an “overhaul” of federal transportation programs, but the Huffington Post points out that it is hardly “transformative.” Instead, it is basically the 2005 bill with a few minor tweaks here and there, none of which should please fiscal conservatives. These include disincentives for states to lease their roads to private toll concessionaires, increased funding for “TIFIA” loans, and greater federal safety oversight of public transit and tour bus companies.

Most importantly, the bill keeps continues to fund most transit programs out of gasoline taxes, which means transit agencies will remain almost completely divorced from transit riders. When 80 percent of your funds come from taxes, not user fees, you just don’t have much an incentive to cater to users. Despite claims of “soaring transit ridership, ridership has essentially been flat for the past six years (compare 2010 and 2011 with previous years on p. 10).

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House Transportation & Infrastructure Committee Chair John Mica introduced a proposed surface transportation bill yesterday. Titled the American Energy & Infrastructure Jobs Act, the bill contains something to make everyone happy as well as things to make everyone unhappy.

To please Senate Democrats, who want to keep spending more than the government is collecting in gasoline and other transportation taxes, the bill proposes to spend $260 billion over five years. That’s at least $10 billion a year more than revenues.

To please Tea Party Republicans, who want to reduce pork barrel spending, the bill contains no earmarks, consolidates or eliminates 70 different programs, and eliminate mandates that states spend highway money on bike paths and other non-highway programs. To please rail nuts, the bill streamlines the rail planning and approval process. To please the energy industry, the bill mandates approval for the Keystone pipeline.

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Speaker of the House John Boehner announced last week that House Republicans will soon introduce a surface transportation reauthorization bill called the American Energy and Infrastructure Jobs Act. The good news is that the plan (now available only in outline form) would eliminate New Starts and other slush funds that encourage cities to waste money. The bad news is that the plan would create a new slush fund that will encourage states to waste money on highways and bridges.

As Antiplanner readers know, Congress was scheduled to reauthorize surface transportation–meaning spending of gas taxes and other federal highway user fees–in 2009. But recently Congress has been gridlocked between Tea Party Republicans, who oppose new taxes and wasteful spending, and Senate Democrats, who want to increase spending to “create jobs” but don’t know where the money would come from.

Boehner proposes to resolve this by increasing production of oil & gas on federal lands, including Alaska’s Arctic National Wildlife Refuge, and dedicating the revenues from such production to highways and bridges. Boehner’s plan continues to include no more earmarks; ending or consolidating nearly 70 transportation funds such as New Starts; removing requirements that gas taxes be spent on non-highway projects; and streamlining transportation planning.

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It would seem like Republicans hold all the cards in the debate over transportation reauthorization. It seems most likely that they will gain seats in both House and Senate next fall if not capture the Senate majority.

House Republicans have said they want to spend no more money than is flowing into the Highway Trust Fund, less than $40 billion a year. Senate Democrats say they want to keep spending at current levels, which is closer to $55 billion a year, for two years, then start the debate all over again. To make this work, says transportation observer Ken Orski, the Senate plan would completely drain the $19 billion in the Highway Trust Fund and then find another $12 billion somewhere.

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It is time for the Tea Parties to take some action. I hope that Republicans who support the Democratic plan will face some opposition in their next primary elections.

Ron Utt of the Heritage Foundation uses 2009 data to show that more than half the states send more gas taxes to the Treasury than they get back in federal transportation dollars. But the GAO uses 2005 through 2009 data to argue that, in fact, all the states have gotten back more than their residents paid in gas taxes.

It is likely that both are correct. Particularly in 2007 and 2008, the federal government spent more on surface transportation than it took in. If you spend more than you receive, then all everybody wins–except whoever has to eventually make up the difference.

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The House of Representatives agreed to extend reauthorization for the Federal Aviation Administration (FAA) for four months and for surface transportation for six months. That’s not as long as the two years the Senate wanted for surface transportation, but apparently House Republicans weren’t ready to give up the gas tax (which would otherwise have expired at the end of this month) as a bargaining chip for a more sensible reauthorization bill.

Reauthorization of the FAA has foundered on the essential air service program which subsidizes commercial airline service to about 100 rural communities in the lower 48 states and another 45 communities in Alaska. This subsidy cost about $170 million in 2010, some $12 million of which went to the Alaska airports.

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