International Road Federation U.S. Transportation Policy Update

2010 Budget

In the last couple of weeks, we have seen further action from both Congress and the White House on their budget plans that will guide the transportation reauthorization bill for the next six years. Last Thursday, the President proposed large increases for rail and highways in his 2010 Budget plan, including the largest amount of funding that any president has requested for Amtrak or for the development of High-speed rail in the United States. He requested $1.5 billion for Amtrak and another $1 billion for high-speed rail, attempting to lay the foundation for the long term growth.

On April 29th, Congress passed the 2010 Budget resolution that establishes a minimum funding level at $324 billion over the next six years for highway, highway safety and transit programs. The $324 billion baseline established in the budget is a 13% increase over the current program that expires in September. The budget also includes a reserve fund to allow for an increase above this funding level to the extent it can be supported by the Highway Trust Fund.

Transportation Reauthorization Bill

Over the last couple of months, the House Transportation and Infrastructure Committee has turned its attention to the mammoth transportation reauthorization bill. This bill serves as a blueprint for federal transportation programs and spending priorities. Rep. Jim Oberstar, (D-Mn), Chairman of the House Transportation Committee has said he intends to use the bill to continue the recovery efforts started by infrastructure spending in the stimulus, while also modernizing the nation’s surface transportation systems.

Chairman Oberstar, ranking member John Mica (R-Fl), and Highways and Transit Subcommittee Chairman Peter DeFazio (D-Or), and ranking member John Duncan, (R-Tn), have all agreed to an outline of the reauthorization bill. Agreement is reported on the “major parameters of the bill” with the exception of how to pay for it. There will be a heightened focus on intermodal traveling and “livability” ideas in the bill, along with language to speed up the project approval process. Additionally, a key issue in the debate will be overhauling the financing mechanism that pays for road construction and other surface transportation programs.

Oberstar is hopeful that he will be able to introduce the bill in May and win House approval of the House package by the end of June. He expressed confidence that Congress would meet their deadline for final passage of the Reauthorization by September.

Highway Trust Fund

Despite the proposed funding increases for the reauthorization bill, many argue that it still falls too short of the funds needed to maintain our current highway system. It is widely acknowledged that the current fuel-tax based financing system is unsustainable and many have proposed a gradual move towards a system based on direct user payments for miles driven.

The Obama Administration has shown initial interest in boosting transportation spending and put a down-payment on that plan in the economic stimulus package earlier this year. But the White House has repeatedly spoken against raising fuel taxes during a recession or moving to a mileage-based tax. But Chairman Oberstar said during a recent hearing that he believes a national vehicle miles traveled (VMT) charging system could be phased in within two years and has directed the House Subcommittee on Highways and Transit to explore it further.