Regardless of what a House-Senate panel (that has been reportedly negotiating through the Thanksgiving holiday) finally decides, the surface transportation bill that Congress hammers together and put on President Obama’s desk is going to be a blown opportunity to adequately address our transportation needs and to move decisively toward full employment. But it does not have to be the final word.
True, the bill will represent the first time since President Obama took office that Congress has been able to pass a transportation authorization bill that enables states and localities to do long-term planning on federally supported highway and public transportation projects over the next five or six years. That’s an improvement over the stopgap measures that never lasted more than a couple of years and often lasted just weeks.
But the legislation contains both inadequate funding and bad policy.
Both the House version (at $325 billion) and the Senate version (at $350 billion) are dramatically less than the Obama administration’s proposal for $478 billion over six years. And even the administration’s proposal, which it billed as a 45 percent increase in transportation investment, would be little more than a down payment toward the more than $1.5 billion that government transportation researchers estimate should be spent over the next six years to finance needed improvements in our roads and transit systems alone. Put another way, federal, state and local governments are only spending about half of what they should be spending to fix our transportation network and improve it to meet demand. Neither the House nor Senate bill significantly moves the needle toward filling that funding gap.
The funding that does exist in the House and Senate bills is scrapped together in part through what Carl Davis at the Institute on Taxation and Economic Policy calls an “incoherent and gimmicky package” of revenue sources, ranging from proceeds from the sale of oil in the Strategic Petroleum Reserve to tapping into a Federal Reserve surplus fund that has never before been used to fund government operations. Congress still won’t touch what remains the most straightforward way to raise revenue for transportation projects – an increase in the federal gasoline tax, which has remained unchanged since 1993 even though inflation has eroded the buying power of gasoline tax dollars by 40 percent since then and fuel efficiency means drivers overall have been consuming less gasoline to tax.
On top of that, Republicans have slipped into either the House or Senate bills a series of troubling policy riders. Politico recently highlighted “Teen truckers, coming to an interstate near you,” along with provisions that would allow rental cars that have been recalled for safety defects to be rented to drivers before the defects are repaired and would shield from public view a government database of truck and bus company safety violations. Also troubling are changes in how transit funds are allocated that could make it harder for states and municipalities to start or expand public transportation, and which could pit high-density urban areas unfairly against rapidly growing suburban and rural areas at a time when demand for public transit in some areas is increasing faster than the demand for new roads.
It is unlikely that much of this will get undone during the remaining negotiations to hammer out legislation that can get to President Obama’s desk, and it is also unlikely that President Obama would refuse to sign the bill, despite the administration’s misgivings.
But there is one omission in the transportation bill that can become the rallying point for activists who want to keep pressing the fight for more investment.
It involves what’s popularly known as the TIGER program – the Transportation Investment Generating Economic Recovery competitive grants to states and municipalities. As described by Sean Doyle, transportation digital organizer for the U.S. Public Interest Research Group (USPIRG), TIGER “is one of the most flexible forms of transportation funding. Unlike many federal programs which typically give funds to state DOTs or transit agencies, TIGER grants can be awarded to any public entity like a municipal government. The funds can also be used for multimodal and multijurisdictional projects that can be harder to fund with other forms of federal money.”
TIGER was one of the channels the Obama administration used to funnel stimulus funds through as it administered the 2009 Recovery Act. TIGER funds have been used for projects that range from new rail and bus stations to bike and walking trails. It remains a wildly popular program in which the demand for funding far outstrips the need; last month the Department of Transportation disclosed that it received for its latest funding round 627 eligible requests totaling $10.1 billion. The department only had the money for 39 projects, totaling not quite $500 million.
The cost of fulfilling all of the $10 trillion in requests for TIGER funding, by the way, could have been offset by agreeing to abandon plans to reinstate a tax loophole that allows corporations to avoid paying taxes on dividend and interest income. Called the “active financing exception,” it has been infamously used by General Electric and many major banks to help lower their tax bill to close to zero percent – or in some cases below zero. The provision that allows this expired at the end of 2013, but it’s in a list of “tax extenders” that Congress is trying to pass this year, and it would cost taxpayers about $10 billion in 2016, according to the Congressional Budget Office.
That sets up the kind of debate we need to have in 2016 over priorities. We have work that needs to be done to make our transportation network more efficient, more suited to the way people live and work, and more environmentally responsible. Even with a nationwide average of 5 percent unemployment, we also still have pockets of poverty and joblessness all over the country, where the creation of new, good-paying jobs is critical.
There will be a tendency for political leaders on both sides of the aisle to check infrastructure investment off the list when President Obama signs the surface transportation bill. That would be wrong. Demanding that Congress fully fund projects like the TIGER program is a fight worth having, because we want to make sure that the next president who sits in the White House is driven to use every possible avenue to create jobs, bring our infrastructure into the 21st century and set all of our communities up for long-term economic growth.