Streetsblog New York City

Congress has already delayed their holiday recess by a week, and members are hoping another delay won’t be necessary. Among the yet-unfinished business: an extension of the payroll tax cut. House Speaker John Boehner plans to hold a vote today on his bill, which marries an extension of the payroll tax cut to the controversial Keystone XL pipeline. While expected to sail through the House, such a partisan bill is unlikely to pass the Senate. Enter Senators Claire McCaskill (D-MO) and Susan Collins (R-ME).

Senators Collins, left, and McCaskill at their press conference. Image: STLtoday

Last week, McCaskill and Collins introduced the ambitiously-named Bipartisan Jobs Creation Act. The bill begins with the payroll tax cut and wraps it in additional tax cuts, deregulation measures, and a $35.8 billion infrastructure investment program. The whole thing would be paid for by eliminating some subsidies for oil companies and by instituting a surtax on millionaires’ income—though exceptions will be made for small business owner-operator “job creators.”

The two senators are generally touting this bill as a tax relief bill first, and a pay-your-fair-share bill second—infrastructure gets third-stringed at best, but the provisions are still worth looking into.

The McCaskill-Collins infrastructure plan [PDF] includes $10 billion to capitalize state infrastructure banks and $25 billion for highways and bridges—just highways and bridges. Out of $25 billion—about half an average year’s transportation spending by the federal government—not a dime goes to transit.

By promoting state infrastructure banks, McCaskill and Collins are throwing their weight behind the Republican vision for infrastructure spending and against President Obama’s. The President and a number of other prominent figures have advocated to no avail for the creation of a National Infrastructure Bank, and Politico reports that they’ll try again next year—to the familiar tune of $10 billion. Meanwhile, House Transportation Committee Chair John Mica has included support for state infrastructure banks—not a national one—in his reauthorization bill. The senators opted for state I-banks in this case because they are an existing program that could be expanded, while “there is no consensus yet on how to address a National Infrastructure Bank,” according to Senator McCaskill’s press secretary, John LaBombard.

Read more…

Two competing versions of a transportation-related job creation bill went down yesterday in the Senate. The first, the Rebuild America Jobs Act (S.1769), was a Democratic proposal, modeled on President Obama’s job creation bill, to invest $50 billion for infrastructure and another $10 billion as seed money to create a new national infrastructure bank.

Bills to put unemployed construction workers back on the job keep going down in Congress.

Given Republican opposition to what they consider a repeat of a failed stimulus — and to an infrastructure bank they say is unnecessary at best and politicized at worst — the failure of the bill is no surprise. The bill garnered a slim majority — 51-49 — but not enough to overcome the threat of a GOP filibuster.

Meanwhile, the Republican proposal would have pushed back many health, safety, and environmental regulations that corporations consider onerous. Defeated in a 47-53 vote, the bill also would have extended SAFETEA-LU for two more years — nearly matching the length and spending levels in the bipartisan EPW proposal — without funding the shortfall such spending would cause to the Highway Trust Fund. The bill wouldn’t have been a “clean” extension of current law, though, since it eliminated the “set-aside” for bike and pedestrian infrastructure, making it the fourth attempt in less than two months by Senate Republicans to eliminate or weaken TE — and the fourth failure.

Tuesday night, the Senate blocked a vote on the president’s jobs plan. As had been forecast, Republicans voted unanimously against the plan, and they weren’t alone: Two Democrats joined them – Sens. Jon Tester of Montana and Ben Nelson of Nebraska. Now it’s on to Plan B, which involves breaking up the bill into pieces to be voted on separately.

Sen. Schumer's plan to salvage the jobs bill wouldn't resuscitate plans for $50 billion in transportation spending. Photo: AP

New York Sen. Chuck Schumer has proposed narrowing the bill down to two parts – one favored by Democrats, the other by Republicans. Under the plan, an infrastructure bank would be created in the model endorsed by the president and the Kerry-Hutchison BUILD Act. In exchange, there would be a tax holiday for corporations to bring back to the U.S. profits they made overseas.

Obama’s bill had also called for a $50 billion investment in transportation infrastructure, and that appears to be dead as the Senate pursues Schumer’s plan. The House had dismissed the transportation component long ago, with Republican leadership saying they might hold a vote on the pieces of the bill that appeal to them (surprise — stimulus spending isn’t one of them). Meanwhile, some insiders say that Republicans in the House are getting serious about passing a transportation reauthorization before March 31 so that they can show that they, too, are serious about job creation.

Of course, the path they seem to be setting out on involves paying for a higher level of transportation spending with oil drilling, a proposal that’s sure to run up against massive Democratic opposition and possibly even a presidential veto.

And many think that not much is going to happen on any of this until the super committee comes back with its proposals for deficit reduction before Thanksgiving.

Back to the Schumer jobs plan: We’ve written a lot, and will be writing more, about the pros and cons of an infrastructure bank. But what about this idea of repatriating overseas profits?

Read more…

Last night, President Obama addressed a joint session of Congress to present his new jobs plan, a bill he’s calling the American Jobs Act. He relied on the well-worn appeal to people’s patriotic competitiveness by pointing out that China is improving its infrastructure while the U.S. is sitting idly by. Without mentioning the dollar figure (psst… it’s $50 billion) he said he’d get construction workers back on the job rebuilding transportation infrastructure and schools:

And to make sure the money is properly spent, we’re building on reforms we’ve already put in place. No more earmarks. No more boondoggles. No more Bridges to Nowhere. We’re cutting the red tape that prevents some of these projects from getting started as quickly as possible. And we’ll set up an independent fund to attract private dollars and issue loans based on two criteria: how badly a construction project is needed and how much good it will do for the economy.

And without ever saying the words “infrastructure bank,” he made his push for one:

This idea came from a bill written by a Texas Republican [Kay Bailey Hutchison] and a Massachusetts Democrat [John Kerry]. The idea for a big boost in construction is supported by America’s largest business organization and America’s largest labor organization. It’s the kind of proposal that’s been supported in the past by Democrats and Republicans alike. You should pass it right away.

He would capitalize the bank with an initial $10 billion, just as Sens. Kerry and Hutchison had proposed. Obama’s own earlier proposal called for a $30 billion investment.

Obama’s written plan also pledges investments in TIGER and TIFIA – good news, since the 2012 transportation budget passed by a House subcommittee yesterday zeroed out TIGER entirely. It also builds on his instruction to agency heads to identify projects that deserve federal help – if not funds – for streamlining the process.

Transportation reform advocates praised the bill, with James Corless of Transportation for America calling it “both ambitious and pragmatic.”

House Transportation Committee ranking Democrat Nick Rahall sat next to Chair John Mica during the speech, and afterward, Rahall said, “We may have walked out of the chamber with different views on the President’s proposals, but I remain committed to working together in a bipartisan fashion.”

We’ll see if they can find anything they both agree to work on. The statement Mica issued after the speech was a quick repudiation of everything the president had asked for:

Read more…

Sen. John Kerry (D-MA), along with Sen. Kay Bailey Hutchison (R-TX) and Sen. Mark Warner (D-VA), just announced that they’re introducing the BUILD Act today, which would create a national infrastructure bank.

Senator John Kerry.

They’re proposing to start the bank with $10 billion of seed money that would leverage hundreds of billions of dollars, according to their projections. “Private capital is sitting on the sidelines,” Kerry said. These senators, and many more who are expected to co-sponsor the bill, want to see those private funds put to work.

The BUILD Act will not include any grants and will only fund revenue-generating projects that can repay a loan. The White House had proposed a $30 billion infrastructure bank that includes grants, but Kerry says that given the current climate, they preferred to stick only with projects that will generate revenue, and they’ve pared it down to a size they think lawmakers on both sides of the aisle can accept.

Sen. Barbara Boxer (D-CA) has indicated she’d rather see the TIFIA loan program be strengthened, rather than create a new entity that some fear will invoke echoes of Fannie Mae and Freddie Mac (a charge Kerry vigorously denies). Kerry says Boxer is on board with this proposal, as is the White House, the Senate Budget Committee Chair, and members of the House.

Stay tuned for more details.

The White House has released a fact sheet on the transportation provisions in the President’s budget [PDF].

Here are the highlights, straight from the document:

• Provides $13.4 billion in discretionary resources in 2012, a $1.3 billion decrease from 2010 levels. (This figure excludes $109 billion in obligation limitations for the surface transportation plan. Including surface transportation obligation limitations, Department of Transportation’s total budgetary resources increase by $53 billion over 2010.)
• Includes a six-year, $556 billion surface reauthorization plan to modernize the country’s surface transportation infrastructure, create jobs, and pave the way for long-term economic growth. The President will work with the Congress to ensure that the plan will not increase the deficit.
• Jump-starts productive investment and stimulates job growth with a first-year funding boost of $50 billion in 2012.
• Provides $8 billion in 2012 and $53 billion over six years to reach the President’s goal of providing 80 percent of Americans with convenient access to a passenger rail system, featuring high-speed service, within 25 years.
• Includes $30 billion over six years for a pioneering National Infrastructure Bank to invest in projects of regional or national significance to the economy.
• Continues to invest in the Next Generation Air Transportation System—a revolutionary modernization of our aviation system.
• Initiates Transportation Leadership Awards to create incentives for State and local partners to pursue critical transportation policy reforms.
• Reduces funding for Airport Grants, focusing Federal support on smaller airports, while giving larger airports additional flexibility to raise their own resources.

The budget includes a new FHWA livability grant program totaling $4.1 billion next year and $28 billion over six years. It specifically targets multi-modal transportation hubs and bike/ped/transit access, and formally embraces a “fix-it-first” approach for highways and transit.

The budget also includes $32 billion in competitive grants to encourage states to adopt safety and livability reforms, as well as $119 billion for transit over the next six years — about double the amount set aside for transit each year under the previous transportation bill.

Our report earlier this week on transportation financing may have left you with a few more questions. We started with a look at TIFIA, which provides credit assistance for infrastructure projects. Many observers see the program as limited by its position inside the DOT and its opaque decision-making process.

Bike facilities that pay returns in better health and environmental impacts might not be candidates for funding from the NIB, which demands returns in cold hard cash. Photo: One More Cyclist

But what about a National Infrastructure Bank, you ask? Transportation reformers are pushing — along with President Obama — for one to be established. Would such a bank be a more effective way to finance infrastructure projects than the TIFIA program? And would it lead the country to build better, more sustainable transportation systems?

Unburying Infrastructure Financing

In his testimony before Congress in May, Robert Puentes of the Brookings Institution’s Metropolitan Policy Program said a National Infrastructure Bank would lead to:

• A better selection process with fewer federal dollars going to wasteful projects
• More accountability for funding recipients
• A focus on maintenance and fix-it-first for highway projects
• Better delivery of infrastructure projects

But when asked why the choice of financing mechanism has an impact on outcomes, he admitted that, mainly, “it matters because of the ability to move the stupid bill through.”

He also said two factors would help a National Infrastructure Bank achieve better outcomes.

Read more…

TIFIAs and TIGERs and NIBs — oh my! The alphabet soup of infrastructure funding mechanisms can be alienating even to committed transportation advocates. But with the power of the gas tax diminishing and elected officials refusing to raise it, other financing options are taking on increasing importance. If you’re interested in reforming our transportation system for the 21st Century, it pays to know the differences between them.

A $50.5 million TIFIA loan helped finance the largest public works project ever undertaken in Northern Nevada, the Reno Transportation Rail Access Corridor. Image courtesy of the city of Reno

Robert Puentes of the Brookings Institution’s Metropolitan Policy Program says the current system is “both broke and broken,” meaning dramatic changes to the financing system are essential to get the kind of transportation system we want. “Minor tweaks are just not going to be enough,” he said. “You could triple the bike program and that’s great, but it’s not going to solve the major challenges we’re facing as a nation. It’s all got to be run through an economic lens.”

Puentes favors a National Infrastructure Bank, promoted by President Obama in his Labor Day speech, as a way to channel transportation investments strategically.

One person who will have a large role in shaping an infrastructure bank is California Senator Barbara Boxer, chair of the Senate Committee on Environment and Public Works. In a hearing this fall, Boxer challenged the idea of a National Infrastructure Bank, saying she’d prefer to see current financing programs strengthened. The program that Boxer wanted to see strengthened, instead of establishing a NIB, is known as TIFIA (Transportation Infrastructure Finance & Innovation Act).

So, you’re probably wondering whether using TIFIA or a NIB to pay for infrastructure makes a difference. Is one mechanism better suited to building a safer, more efficient, and sustainable transportation system than the other?

Read more…

The Obama administration's report emphasizes how much Americans spend on transportation costs and ties the financial burden to car dependence. Graphic: U.S. Treasury/Council of Economic Advisers

When President Obama announced his push for a long-term transportation bill on Monday, he introduced a report by his Council of Economic Advisors and the Treasury Department analyzing the economic impact of infrastructure investment [PDF]. At face value, the numbers in the president’s plan might not look so impressive. It calls for rebuilding 150,000 miles of roads, laying and maintaining 4,000 miles of railways, and the restoration of 150 miles of airport runways.

If you’re hoping for an all-out push for sustainable transportation and livable streets, you may be wondering whether this signifies much of a change to the highway-centric status quo. Look at the underlying message, and it does.

The headline numbers sit on top of a broad strategy that groups including Transportation for America, the Environmental Defense Fund, the Transportation Equity Network, and U.S. PIRG have all applauded. There are still few specifics in the administration’s plan, but here’s a quick cheat sheet to the elements of the report that transportation reformers find so encouraging.

It emphasizes the need to provide American families with a range of transportation options, not just driving.

The report calls attention to the heavy burden that high transportation costs place on the middle class. “The average American family spends more than $8,600 a year on transportation, one-third more than they spend on food,” it states, pointing out that the wealthiest 10 percent spend only 9 percent of their income on transportation, while everyone else shells out 16 percent of our income to move from point A to point B.

The report links high transportation costs to car dependence and makes the case for increasing access to transit and other transportation options, asserting that “[t]his burden is due in large part to the lack of alternatives to expensive and often congested automobile travel. Multi-modal transportation investments are critical to get American families moving again without wasting their time and their money sitting in traffic.”

Read more…

On Labor Day, President Barack Obama gave a speech in which he pushed for the creation of a National Infrastructure Bank. Legislation that would establish the bank was introduced over the summer in Senate Bill 1926, authored by Chris Dodd of Connecticut and Chuck Hagel of Nebraska. But the idea of an independent financing entity for large infrastructure projects originated in Europe. The European Investment Bank (EIB) was created in 1958 as part of the Treaty of Rome, which started Europe on the path towards economic integration.

The European Investment Bank provides financing for projects like Spain's high-speed rail system.

As an inspiration for an American Infrastructure Investment Bank, the EIB makes some sense, but there are also big differences. “It has to be understood in the context of European arrangements,” said Alistair Milne, a banking and finance professor at the Cass Business School at City University in London. European institutions, he explained, are not as comfortable with selling bonds for infrastructure projects. “The EIB fills a bit of that gap which may not exist in America.”

The bank is owned by all the member states of the European Union, so its mission is to encourage investments that advance Europe, rather than the interests of any single European state. It offers loans, technical assistance, and venture capital. Last year it raised about 80 billion euros for projects. It has provided loans for windfarms, solar plants, high speed rail, and other sustainable infrastructure projects.

For example, last year the EIB agreed to provide 5 billion euros for Spain’s high speed rail system, including a line that will eventually link Madrid with Lisbon. And in May it lent 150 million euros to improve a Hungarian portion of the European electricity grid. In addition to these large infrastructure projects, it also provides some “small business finance and some lending outside of the European Union,” said Milne.

Originally, the Obama administration had planned to lend money to specific states. But this infrastructure bank model, it is hoped, will better allow private capital to be applied toward projects that cross state lines.

Read more…