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Obama Administration Proposed Budget Aims to Streamline Transportation Spending

February 14, 2011

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President Barack Obama's proposed budget calls for a $556 billion, six-year transportation funding plan that would lump the Highway Trust Fund in with other funds into a single Transportation Trust Fund and streamline the number of transportation-related programs -- but it's not clear where the funding will come from.


The six- year plan includes a $50 billion upfront investment for the first year in highways, transit, high-speed rail and aviation programs. The budget calls for $129 billion for the U.S. Department of Transportation in the first year. It also sets aside $30 billion over six years to establish a national infrastructure bank to provide loans, loan guarantees and grants for projects of national and regional significance.

The last surface transportation bill, which authorized $256 billion over six years, expired in 2008. Money for highway repairs has been funded through a series of extensions.

"President Obama's budget for the Department of Transportation is a targeted investment in America's economic success," said Transportation Secretary Ray LaHood. "If we're going to win the future, we have to out-compete the rest of the world by moving people, goods, and information more quickly and reliably than ever before. President Obama's investments in rebuilding our crumbling roadways and runways, and modernizing our railways and bus systems will help us do just that."

Critics, however, say the budget does not do enough to spell out the funding mechanism for all this. What's not in the president's budget is an increase in federal gasoline and diesel taxes to pay for construction.

The budget proposal would roll all the surface transportation programs into one fund, which would be renamed the Transportation Trust Fund. The Associated General Contractors of America said it was concerned about this aspect of the proposal: "The administration promises to use existing gas tax and other revenue sources only to continue funding highway and transit projects," the group said in a statement. "However, it is hard to take this proposal seriously when the administration has yet to identify how it will pay for the other programs it wants to add to the Trust Fund. This portion of the proposal appears more like an effort to obscure overall spending levels than to actually create a viable new role for the Trust Fund."

The budget proposal for the Department of Transportation consolidates unnecessary programs, institutes common sense government reforms, and cuts red tape, according to the DOT. More than 55 separate highway programs will be streamlined into just five core programs, eliminating wasteful overlap.

For the first time, the budget will establish a National Infrastructure Bank that will leverage private capital to build complex large-scale projects that hold significant economic benefits to a region or the nation as a whole. A new competitive incentive program, called the Transportation Leadership Awards, will reward unique projects that find new ways to connect people to opportunities and products to markets.

The six-year proposal will also provide $336 billion, a 48 percent increase over the previous authorization, to rebuild America's roads and bridges, and $119 billion, a 128 percent increase over the previous authorization, in funding for affordable, sustainable, and efficient transit options.

The administration says its national high-speed rail proposal is a critical part of its vision for modernizing America's transportation network. The budget includes $53 billion for high-speed trains in addition to the $10.5 billion already committed for train projects.

Cutting DERA Funds

The Diesel Technology Forum criticized the fact that the proposal would eliminate all funding for the Environmental Protection Agency's Diesel Emissions Reduction Program (also known as DERA).

"It's hard to imagine any program that has delivered more return on investment for the American people," said Executive Director Allen Schaeffer in a statement. "According to EPA, DERA returns a minimum of $13 for every dollar invested and by some estimates, as high as $20 for every $1 invested through environmental and public health benefits. DERA's popularity is further evidenced by the fact that grant applications have far exceeded funding levels for each of the last few years by as much as 7:1, with grant applicants also putting more than $2 billion in private matching funds on the table."

In fact, Schaeffer points, out, last year's reauthorization of the Diesel Emissions Reduction Act was one of the few pieces of legislation to be enacted in the "lame duck" ession of Congress. It was identified as a true example of bipartisan legislation with broad support of Republicans, Democrats, industry and environmental groups alike.

"The proposed elimination in the FY 2012 budget is especially ironic since just a few weeks ago President Obama signed into law the reauthorization of DERA for another 5 years," Schaeffer said.


A budget summary document is available at http://www.dot.gov/budget/2012/fy2012budgethighlights.pdf.


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