Congress Approves Transportation Extensions; Some Skeptical About Obama’s National Infrastructure Bank

Congress this week beat a couple of looming deadlines and voted to extend authority for the Federal Aviation Administration and the nation’s surface transportation programs. Meanwhile, some are resisting President Obama’s call for the creation of a National Infrastructure Bank as part of his American Jobs Act.

Congress Approves FAA, Highway Extensions

The U.S. Senate late Thursday followed the House in voting to extend funding for the Federal Aviation Administration and highway and transit projects. In order to avert a second shutdown of the FAA which loomed if lawmakers couldn’t reach agreement by Midnight tonight and an interruption in reimbursements to states for transportation projects which loomed if the latest extension of SAFETEA-LU was allowed to expire at the end of the month, Senate leaders had to cut a deal with Oklahoma Senator Tom Coburn, who objected to a mandate that states spend 10 percent of their federal funding on landscaping, pedestrian safety and bike paths as part of the Transportation Enhancements program. Senate leaders had to promise Coburn that the mandate would be dropped from long-term legislation reauthorizing federal surface transportation programs.

Coburn argues that states need to be allowed to decide what to do with their transportation funding and be able to spend it on repairing bridges and highways if they so choose rather than being required to fund transportation enhancements.  Coburn also says the Transportation Enhancement program has been used to fund not just bike trails but also “beautification” and “transportation museums,” which he believes are a waste of money.  

But Coburn’s focus on eliminating the 1.5 percent of federal transportation spending that supports Transportation Enhancements including bike and pedestrian funding has met with outrage from environmental groups and advocates for transportation alternatives.

“The Transportation Enhancements program is one of the most cost-effective policies in the federal transportation toolbox,”Deron Lovaas of the Natural Resources Defense Council wrote on the NRDC’s Switchboard blog. “While pollution reduction from such investments is modest they are inexpensive and provide ample benefits to consumers vis-à-vis lower vehicle operating costs and public health. These projects also support public transportation, increasing ridership and making it more cost-effective too. So this is money well spent, which is more than can be said of much larger programs which fund highway projects.”

Tanya Snyder on Streetsblog writes that the group Transportation for America points out that Coburn’s home state of Oklahoma ranks second in the nation for most deficient bridges and cutting the transportation enhancements program wouldn’t make a dent in repairing them. According to Transportation for America: “Oklahoma has almost 6,000 deficient bridges ... (The Federal Highway Administration) estimated in 2009 that they’d need $1.1 billion to repair all of their bridges. Oklahoma got just $16 million in enhancements funding in 2009. At that funding level, it would take almost 68 years of enhancements funding to address their bridge needs. And that’d be assuming that no more bridges end up structurally deficient — unlikely with an average bridge age of 45 years.”

Transportation for America’s Stephen Lee Davis also posted some additional information last week about the purpose and size of the transportation enhancements program.

The League of American Bicyclists also weighed in this week on the fight over the program: “Bike projects create jobs,” writes league President Andy Clarke in a blog post. “Bike projects improve safety; more bicyclists means less congestion, cleaner air, less oil consumption, fitter and healthier Americans. It’s baffling. It’s not like the transportation program is going to be cut by the amount they strip out for bike funding…no, the money still gets spent but it will likely buy us another mile or two of freeway instead of thousands of small-scale, labor-intensive bicycling and walking improvements.”

Opposition to the Infrastructure Bank

Dennis Moore in the public finance newspaper The Bond Buyer writes that President Obama’s proposal to create a new national infrastructure bank as part of his American Jobs Act is getting a chilly reception among some transportation industry and business groups.

Janet Kavinoky of the U.S. Chamber of Commerce argues in the article that “You can’t start up the bank and create jobs tomorrow.”

Bill Graves of the American Trucking Associations said “We’ve long advocated that roads and bridges should be paid for primarily by their users, through the most direct taxes: possible: fuel taxes. Allowing private capital to take their cut as part of an infrastructure bank, or by taxing other sectors to pay for roads and bridges, takes us further away from this core principle.”

Matt Dellinger of the Transportation Nation blog examines why House Transportation and Infrastructure Committee Chairman John Mica opposes an infrastructure bank but supports the TIFIA program (the acronym stands for Transportation Infrastructure Finance and Innovation Act), which performs much as a bank would, offering direct loans, loan guarantees and standby lines of credit. Dellinger quotes a Mica spokesman as saying “We just don’t believe that creating another government-sponsored enterprise like Fannie or Freddie is the way to go.”

Melissa Avstreih, a Transportation Analyst for Bloomberg Government, also makes the new federal bureaucracy argument in a report for industry groups looking at transportation funding in the President’s jobs proposal. Among the other cons of an infrastructure bank, the report cites the following: “Takes time to set up, hire staff, set lending rules.” It also offers these pros: “Would be able to fund projects that cross state lines or combine transportation modes. Ability to use federal money to leverage private capital. Better capitalized than TIGER and TIFIA.”

Philip Langdon of New Urban Network and Fox Business News also took a look at resistance to and support for an infrastructure bank in articles this week.