October 1, 2009
by Therese Dunphy, Editor-in-Chief
As Aggregates Manager goes to press, the Safe, Accountable, Flexible and Efficient Transportation Equity Act — a Legacy for Users (SAFETEA-LU) is set to expire on Sept. 30. The only questions that appear to remain are how many extensions will follow and how long will they be.
The aggregates industry — and the nation as a whole — cannot afford a repeat of the 12 extensions and 680 days of delays we experienced following the Sept. 20, 2003, expiration of the Transportation Equity Act for the 21st Century (TEA-21). As we learned then and have been reminded since, short-term funding does not allow for long-term infrastructure planning.
Two extension options are being debated.
The Obama administration and the Senate want an 18-month extension. The party line is that the delay will allow the nation’s economy to recover enough to consider a growth in spending, but other issues factor into it as well. Democrats don’t want to talk about new taxes before mid-term elections. President Obama has his hands full with his troubled health care proposal and is burning political capital with that issue.
Longtime industry advocate Jim Oberstar, chairman of the House Transportation and Infrastructure committee, wants a short-term extension and reauthorization completed by the end of the year. His legislation features a six-year, $500 billion ($450 for surface transportation and $50 billion for high-speed rail) budget. The catch is how to pay for it with anticipated revenues of less than half that amount.
Ideology and economics are going to be the biggest challenges to securing much needed, large-scale gains in transportation spending. Consider the CARS (aka Cash for Clunkers) program. The federal government spent approximately $3 billion to encourage consumers to trade in older cars for newer models with better gas mileage. Although the legislation’s green features may be good for the environment, higher fuel efficiency will lead to lower transportation revenues.
Rising Corporate Average Fuel Economy (CAFE) standards are an even greater challenge to current infrastructure funding mechanisms. The administration’s recently proposed CAFE standards — to an average of 35.5 mpg by 2016 — represent more than a 30-percent increase in a fleet’s average fuel efficiency.
As the Obama Administration advances its green ideology, it must consider the economic impact on other legislation as well. As fuel efficiency rises, fuel tax revenues decline. Current Highway Trust Fund revenues are already too low to meet even the maintenance needs of the nation’s infrastructure.
If there is one last lesson to be learned from TEA-21 reauthorization, it is about the value of political courage. In 2009, Congress and the President must not repeat past mistakes. Extensions and political cowardice will not suffice. They must find the political courage to properly fund the nation’s infrastructure, and they must find that courage quickly.