5. TRANSPORTATION:

Obama budget true to his calls for massive infrastructure spending

Published:

President Obama's proposed fiscal 2013 budget lays out an ambitious six-year, $476 billion surface transportation reauthorization plan that would spend on high-speed rail, transit and livability programs.

Building on a frequent administration promise to create jobs and foster the economy through infrastructure spending, the budget would begin with a $50 billion upfront boost in 2012 and a $74 billion spending level in 2013, up $1.4 billion from the 2012 enacted level, according to the Transportation Department.

Funding for the measure would come from a so-called "peace dividend," or the money saved by reducing overseas military operations. According to budget documents released today, the money saved from the military spending would immediately help supplement the federal gas tax, with additional savings coming from "closing loopholes in budgetary treatment."

The administration's six-year transportation proposal comes as the House and Senate are debating competing long-term transportation bills ahead of the March 31 expiration of the surface transportation program. However, the White House plan is far more substantial than either the two-year, $109 billion Senate proposal or the five-year, $260 billion House plan.

The budget builds on a series of frequent administration promises in transportation. For example, it calls for $47 billion over six years and $2.7 billion in 2013 to develop a high-speed passenger rail network, a longtime White House promise. Although the administration has already invested more than $10 billion on high-speed rail from the economic stimulus and previous appropriations, its funding for 2012 was zeroed out in a budget deal and many experts had left the program for dead.

The budget also calls for a boost in transit programs in a bid to get more commuters onto trains and buses. Transit programs would bring in $108 billion over six years, more than double previous authorizations. In 2012, transit programs pulled in $10.6 billion.

However, the Washington Metropolitan Area Transit Authority -- which operates the regional Metro system and gets its funding through federal allocations -- would see a reduction of $15 million in 2013. The White House said that cut could be offset by the overall national boost in transit funding.

The bill would also dedicate more funding to the administration's flagship livability program, which emphasizes environmental and economic sustainability and de-emphasizes the role of cars. The administration proposes to make permanent the popular Transportation Investment Generating Economic Recovery (TIGER) grant program, with a $500 million authorization in 2013.

Although the budget reflects a healthy investment in non-automotive modes, building on the administration's livability philosophy, which has emphasized a multimodal approach, highways would still net a bulk of the funding. The Federal Highway Administration would get $42.6 billion in 2013.

The budget would also consolidate more than 55 highway programs into five streamlined programs.

The budget proposes a 50 percent boost in the State Pipeline Safety Grant program, the first step in a three-year effort that would more than double the number of pipeline safety inspectors (see related story).

The $50 billion boost, which was also proposed last year, would distribute money across several departments. Highways would get $28 billion of the money, while $4 billion would go to intercity and high-speed rail grants. Another $2 billion would go to Amtrak for repairs and upgrades, $3 billion would be sent to transit capital projects and $1 billion would go to the Federal Aviation Administration for development of the NextGen air traffic control system to make flights more efficient and safe.

The rest of the money would be split across airport development grants, capital improvement projects and credit assistance or award grants.

The 2013 budget mirrors a similar -- but larger -- proposal from the 2012 offering. Last year, the White House had called for $556 billion in infrastructure spending over six years, although it did not set aside a funding source. Nearly all major programs saw a larger promise in last year's budget, which was a non-starter in Congress because of its lack of revenue details.

High-speed and passenger rail, for example, would have netted $53 billion in last year's proposal, $6 billion more than was offered this year. Transit programs would have pulled in $119 billion under that proposal, while the TIGER grant program would have had a $2 billion round in just one year.

The proposal to pay for infrastructure with $38.5 billion in war spending reflects a promise Obama made during his State of the Union address last month to use money from the wars to reinvest in the country's crumbling roads and bridges. However, that proposal does not represent a long-term fix for the Highway Trust Fund, which has seen its revenue from the federal gas tax plummet in recent years and faces insolvency. The gas tax was last raised in the early 1990s.

In budget documents, the administration says it will work with Congress to find a long-term pay-for at the end of the six-year period.

The House has proposed supplementing gas tax funds in part with funds from expanded domestic energy production in offshore areas and Alaska. The Senate proposal, meanwhile, stays largely within the gas tax means and has a series of smaller offsets -- including closing loopholes on black liquor and a tax on certain retirement accounts -- to fill its budget shortfall.

With pending reauthorization bills in Congress reflecting months of legislative effort, it's unlikely the administration's proposal will see much traction or supersede either bill.