Ken Orski

The ASCE 2013 "report card" is but the latest among a flood of warnings about the sorry state of the country's "crumbling infrastructure." The report estimates the total investment needs in surface transportation to the year 2020 of $1.723 trillion and estimated funding of $877 billion, leaving an astronomical funding gap of $846 billion--- more than $100 billion per year!

What kind of impact ASCE's estimates and other warnings of "failing" infrastructure will have on public opinion and on congressional attitudes and fiscal decisions remains to be seen. They come at a time of severe budget pressures and intense Republican efforts to curb excessive discretionary spending. To be successful, the pro-infrastructure campaign must persuade fiscally conservative lawmakers that there are urgent and compeling reasons to boost spending on public works that override the imperative to reduce the deficit and get the nation's fiscal house in order.

Second, infrastructure advocates must convince the nation's taxpayers that spending more on trans

Readers of this blog will be interested to learn of a new Reason Foundation study released today (February 21). The study has found that the condition of America's public roads has improved in seven key areas including deficient bridges and pavement condition. The report is based on a variety of sources, primarily from the states themselves as reported to the federal government from 1989 through 2008. ("Are Highways Crumbling? State and U.S. Highway Performance Trends, 1989-2008", Policy Study 407). reason.org/files/us_highway_performance_20_year_trends_full_study.pdf

"There are still plenty of problems to fix, but our roads and bridges aren't crumbling," said David Hartgen, lead author of the study. "The overall condition of the public road system is getting better and you can actually make the case that it has never been in better shape."

It will be interesting to compare this report with the 2013 "Report Card for America's Infrastructure" of the American Society of Civil Engineers, which is to be published on March 19 as

If the President's insistence on coming up with the same proposals over and over again and expecting different results is not exactly insanity (reputedly Einstein's definition) it suggests a certain frivolity. In fact, as reported by POLITICO, a White House official said the proposal will "not necessarily" take the form of a legislative proposal. In other words, it is not to be treated seriously.

No one disputes the President's ---and infrastructure advocates'--- claim that some of America's bridges and other transportation facilities are reaching the limit of their useful life and need replacing. Nor does any one disagree about the need to expand infrastructure to meet the needs of a growing population and economy. But this does not rise to the level of a national crisis requiring a new federally funded $50 billion crash program. The condition of transportation infrastructure varies widely from state to state as numerous studies by the transportation research group TRIP have shown. Most states maintain their transportation assets in a state of good repair and

As one senior congressional aide confided to us, "I don't see our constituents lobbying to raise the gas tax. The only people we hear from on that score are the special interest groups." I suspect most lawmakers on Capitiol Hill share this view. Given this perception, it is almost certain that a federal gas tax increase will remain off the table in the next session of Congress.

Instead, look for the states to assume a larger share of responsibility for funding their transportation needs. An early harbinger may be the state of Arkansas whose voters just approved a sales tax increase to back a $1.3 billion bond issue to fund highway construction over the next ten years.

Also, look for for a shift from funding to financing of large infrastructure projects. The shift will be fueled by a vastly expanded TIFIA lending authority ---by more than 600 percent, from $122 million in FY 2012 to $750 million in FY 2013---and by a large reservoir of equity in pension funds and private infrastructure investment funds, reportedly numbering over 100 at the latest count.

Infrastructure has been absent from the political dialogue
Proponents of more robust spending for infrastructure ignore the political realities. With mounting deficits and the shadow of a $16 trillion debt hovering over all fiscal decisions, Congress is not about to vastly increase spending on transportation. Concern about deteriorating infrastructure has failed to resonate with the electorate during the election campaign. The promise of transportation spending as a job creator proved to be illusory and to have little political credibility as a countercyclical remedy. Infrastructure projects have shown to be hardly "shovel ready." Nor have the presidential condidates bothered to mention transportation in their debates on domestic priorities, despite pleas by stakeholder groups to include infrastructure on the political agenda. The absence of transportation in the political dialogue has surprised and disappointed transportation advocates. Believers in the Infrastructure crisis decry this supposed "indifference&quo

With a road user (mileage) fee garnering little support in Congress (indeed, the House has approved an amendment to the FY 2013 appropriations bill that would block the exploration of a Vehicle Miles Traveled (VMT) fee), and with no other money-raising mechanism anywhere in sight, there is a growing sense among seasoned observers that the days of long-term surface transportation authorizations may be over. The prevailing fiscal and political climate will make it difficult if not downright impossible to raise hundreds of billions of dollars in a single legislative package.

For example, at FY 2013-14 (MAP-21) levels of expenditure, a six-year transportation authorization would require approximately $300 billion in funding. Highway Trust Fund tax revenue and interest over the same time frame is expected to bring in only $210 billion, leaving an unfunded shortfall of $90 billion.

Faced with this dilemma, Congress is likely to embrace short-term bills as the only practical solution. Short-term authorizations, such as MAP-21, will only require relatively modest injectio

To say that "the Senate bill isn't free from controversy" is an understatement. The 33 members of the House conference committee and their staffs are currently plowing through the 1,600 pages of the Senate bill (MAP-21) and trying to identify questionable and controversial provisions. Among the items they are focusing on as potentially objectionable are the following:

1. The Senate bill has made an extensive use of offsets over a period of ten years to cover spending over two years ---or rather just 15 months, the effective length of the Senate bill at the termination of the current extension (June 30 2012 -September 30, 2013). Of the total revenue-increase offsets only $3.1 billion would be transferred to the Highway Trust Fund (HTF) during the life of the bill while another $10.9 billion would be credited to the Fund over a period of 10 years. This practice has been criticized as "accounting gimmickry."

2. The largest two-year transfer into the HTF is an outright $4.5 billion appropriation from the General Fund ("out of money in the Trea

The federal-aid transportation program will surely continue but there is a growing sense among the lawmakers on Capitol Hill that Congress may be forced to abandon the practice of multi-year authorizations. The prevailing fiscal and political environment makes it difficult if not impossible to raise hundreds of billions of discretionary dollars in a single legislative package.

At current levels of spending, a five-year authorization would require approximately $270 billion, but highway trust fund revenue and interest over the same time frame is projected to generate only $195 billion (CBO estimate)--- leaving an unfunded shortfall of $75 billion. For a six-year bill, the unfunded shortfall would reach $90 billion. Where would that money come from (short of using the kind of accounting gimmickry that the Senate has been accused of doing in its MAP-21 bill )?

Hence, short-term bills (annual or bi-annual) requring only relatively modest amonts of offsets or general fund supplements may become the acceptred practice instead. The fact that the Senate has barely scraped u

"I have not been a student of the Senate bill because the Senate bill has been academic to me. But now that it's becoming a potential reality and I'm a potential negotiator, I will become conversant with the Senate bill line by line and then I'll have an opinion," Rep. Peter DeFazio (D-OR),answering a reporter's query about details of a provision in the Senate bill (quoted in POLITICO's Morning Transportation, April 19.)

As Rep. DeFazio observed, getting to know the finer details of the Senate highway bill (MAP-21, S. 1813) has taken on new significance now that a House-Senate conference negotiation on the reauthorization measure has become a reality. Understanding the Senate bill is important because the Senate measure is likely to become the basis of any final bill. The House bill (H.R. 4348) is little more than a 90-day extension of the current program (through September 2012) with the Keystone XL pipeline amendment attached to it. It is silent on nearly everything addressed by the Senate bill. And, equally, it is silent on nearly every issue g

With every passing day the likelihood of yet another temporary extension becomes greater. Although the Senate stands a good chance of approving the needed offsets ("pay-fors") and passing its $109 billion two-year bill before the March 31 deadline, the House has a much tougher row to hoe.

Having abandoned its earlier proposal for a $240 billion five-year bill for lack of sufficient support, Speaker Boehner and John Mica must now overcome internal disagreements and craft a new bill acceptable to a majority of House members. This may mean a shorter-term bill (perhaps as short as 18 months) at a reduced level of $37 billion/year, according to congressional sources.

But with only 13 legislative days in March (the House will be in recess from March 9 to 18), chances of placing the bill on the President’s desk by March 31 seem remote. Another temporary extension, probably until Memorial Day, is inevitable.

What if this still does not leave enough time for the House to pass a bill or for the two Houses to reach agreement on a final version of the

According to the latest (January) CBO estimates, the Highway Account of the Trust Fund is projected to be credited with $168.4 billion in gas tax revenue and interest over the next five years (FY 2012-2016) and the Transit Account with $24.8 billion. Since the House Ways and Means Committee has proposed to transfer the transit program, along with the Congestion Mitigation and Air Quality Improvement (CMAQ) Program, to a new "Alternative Transportation Account" to be funded from the General Fund, the entire sum of $193.2 billion would become available to the highway program. This sum is only $4.9 billion short of the cost of the highway and safety portion of the House five-year program ($206.6 billion). In other words, the whole highway program, budgeted at current spending levels, could be funded with revenues from the Trust Fund plus a mere $4.9 billion in offsets. If this sounds surprising, recall that in this scenario the CMAQ program (assumed at $8.5 billion over five years) would no longer be a charge against the Trust Fund.

Some critics charge that shifti

All of the comments so far have missed the central point in the high-speed rail (HSR) debate: that it is not the merits of high speed rail that are the issue but the Obama Administration’s handling of its HSR initiative. It’s the flaws in the Administration’s approach and its misleading rhetoric, rather than the appropriateness of HSR technology, that are the key reason why the press and public opinion have turned skeptical and why Congress, on a bipartisan basis, has refused to fund the program two years in a row. The Administration’s inept handling of the program was the focus of a December 6 hearing of the House Transportation and Infrastructure Committee. I thought our exchange about high-speed rail could benefit from taking a fresh look at the Committee’s conclusions.

Hearing Highlights Missteps in Administration's High-Speed Rail Program

December 6, 2011

Washington, DC – Transportation and Infrastructure Committee Members and

All of the comments so far have missed the central point in the high-speed rail (HSR) debate: that it is not the merits of high speed rail that are the issue but the Obama Administration’s handling of its HSR initiative. It’s the flaws in the Administration’s approach and its misleading rhetoric, rather than the appropriateness of HSR technology, that are the key reason why the press and public opinion have turned skeptical and why Congress, on a bipartisan basis, has refused to fund the program two years in a row. The Administration’s inept handling of the program was the focus of a December 6 hearing of the House Transportation and Infrastructure Committee. I thought our exchange on high-speed rail could benefit from taking a fresh look at the Committee’s conclusions.

Hearing Highlights Missteps in Administration's High-Speed Rail Program

December 6, 2011

Washington, DC – Transportation and Infrastructure Committee Members and
witnesses outlined growing concerns with the Obama Administration&r

Let me join former Secretaries of Transportation Norman Mineta and Sam Skinner in thanking Chairman John Mica for producing a thoughtful and responsible piece of legislation to address our long-term transportation needs.

As Chairman Mica underscored in his presentation, his Committee’s proposal for a $230 billion six-year bill aligns spending with the amount of revenue expected to be collected, and thus ensures the long-term viability of the Highway Trust Fund. To authorize higher levels of funding would be tantamount to spending money the government does not have and would place the Trust Fund on a path to insolvency.

It is to be hoped that the Senate Finance Committee will come to the same conclusion and join the House in a bipartisan effort to place the federal surface transportation program on a sound fiscal basis. As for Sen. Barbara Boxer’s idea of a (partly-funded) two-year bill, it would deprive states of the funding stability they need for planning major multi-year projects. I have yet to hear a single governor or state transportation official l