Obama Proposes $556B Transportation Package

February 15, 2011

In his 2012 fiscal year budget released on Feb. 14, President Barack Obama proposed a six-year $556 billion surface transportation package. The amount represents a substantial increase in transportation funding and includes an immediate $50 billion cash infusion to create jobs, a proposed national infrastructure bank, and a heavy emphasis on expanding high-speed rail.

The $556 billion dollar proposal is nearly double the $285 billion package authorized in SAFETEA-LU, the last highway bill, which expired in September 2009. Legislation to establish a new, multi-year investment highway blueprint has languished in Congress for the past two years.

The call for such a substantial spending increase continues the administration’s recent focus on transportation investment as a way to create jobs and ensure America’s long-term economic competitiveness—even as it raises questions about misplaced priorities. The president’s proposal would allocate $53 billion for high-speed rail and $30 billion to establish a national infrastructure bank over the next six years. Yet the mainstay of our nation’s surface transportation network, roads and highways, are largely neglected beyond vague promises of support.

Also conspicuously absent from the president’s budget are new funding mechanisms. User fees, the most viable option for providing guaranteed, long-term funding for surface transportation, have been dismissed as a non-starter by the president. Instead, Obama’s proposal seeks to find funds by consolidating highway programs and hoping for a congressional bipartisan financing mechanism.

In sum, the president’s transportation budget document is long on rhetoric, short on the details, and, in some respects, appears divorced from the new political realities in Washington. For example, despite broad public support for smaller government, Obama has proposed spending increases without making tough choices about how to pay for them. And despite the fact that many Republicans oppose high speed rail, the administration made it the centerpiece of its transportation program.

AED shares the administration’s belief that substantial investments in surface transportation are needed to ensure our long-term economic competitiveness. However, we have a clear difference of opinion about priorities.

With all that said, keep in mind that this is just the first salvo in a long battle. The highway reauthorization story will continue to develop in the weeks ahead, as the House and Senate hold additional hearings and roll out their own proposals. Stay tuned.

Source: Associated Equipment Distributors