Post Tagged with: "Highway Bill"

Financial Times reviews President Obama’s Infrastructure Spending – Highway to hell revisited

March 5, 2009 at 7:57 pm

(Source: Financial Times)

“History reminds us,” President Barack Obama told both houses of the US Congress on Tuesday night, “that at every moment of economic upheaval and transformation, this nation has responded with bold action and big ideas.” By “the nation”, Mr Obama means “the government”. We can tell by the episodes he uses to make his point: the establishment of universal public education, the GI Bill of Rights and – alluded to but not named – the Highway Act of 1956, at the time of its passage the largest public works project in US history.

Mr Obama’s praise for the Highway Act is disturbing. In arguments over his stimulus package and his preliminary budget released on Thursday, Republicans have made the lazy assumption that government intervention in the economy can never succeed. Mr Obama shows signs of the opposite error – believing it can never fail.

The Highway Act probably has more defenders than detractors. But Mr Obama should be among the latter. The act, which budgeted $25bn in federal money to build 41,000 miles of motorway, exacerbated the very problems Mr Obama has been most eager to solve – spoliation of the environment, dependence on foreign oil, overburdening of state and local budgets, abandonment of the inner-city poor and reckless speculation in real-estate development, to name a few.

A lot of people complain today about the rump of Republican disbelievers in Keynes, feckless though they may be, who fiddle while Rome burns. There was no hint of such heresy in 1956. The Senate passed the bill 89-1. Otherwise, the political climate bore some resemblance to our own: conformism bred of confusiofinancial meltdown whodunnit in FTn. A 40,000 mile highway network had been on the wish list of the armed forces since 1944. Eisenhower was a big backer, and had hopes of justifying it as a stimulus during the recession of 1954. That downturn was long past when the bill came to a vote, but the vested interests remained, and so did the fear that one’s constituents might think it a bit communist to vote against a highway bill.

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Blue-ribbon panel endorses road pricing, shift from gas tax

February 26, 2009 at 4:01 pm

(Source: Greenwire via New York Times)

A blue-ribbon federal transportation panel called today for a temporary gas-tax hike followed by a move toward charging drivers directly for every mile they travel — two ideas that have been soundly rejected by the White House in the past week.

The controversial road-pricing scheme would become the dominant funding mechanism for road construction and maintenance by 2020, with drivers being charged an average of 2 cents per mile, according to the report released by the 15-member panel created by Congress in the last highway bill authorization.

The National Surface Transportation Infrastructure Financing Commission says the shift is necessary because the current funding mechanism — federal fuel taxes — has failed to raise the necessary revenue for needed roadwork and runs counterintuitive to national environmental and energy goals.

“The more successful U.S. transportation policy is at increasing fuel efficiency and reducing both foreign oil dependency and carbon emissions, the faster its primary funding source, the gas tax, becomes obsolete,” said Texas state Rep. Mike Krusee, a commission member.

Increases in fuel economy, coupled with the fact that the current federal tax on gasoline has remained stagnant at 18.4 cents a gallon since 1993, have already taken their toll on federal revenues to fund road construction and maintenance. The Highway Trust Fund, which receives the bulk of its money from federal fuel taxes, would have run empty late last year if it were not for an eleventh-hour transfer of $8 billion by Congress to keep it solvent.

“With the expected shift to more fuel-efficient vehicles, it will be increasingly difficult to rely on the gas tax to raise the funds needed to improve, let alone maintain, our nation’s surface transportation infrastructure,” said commission Chairman Robert Atkinson, president of the Information Technology and Innovation Foundation, a nonpartisan think tank.

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