A leading freight advocacy group Wednesday praised a proposal introduced in the Senate to fund the nation's transportation programs, saying the proposal gives freight a place at the table. The group, the Coalition for America's Gateways and Trade Corridors, had slammed a version unveiled in the House of Representatives two weeks ago for its failure to address freight-related issues and to provide adequate funding.
The Senate proposal, jointly introduced by Sen. Barbara Boxer (D-Calif.), chair of the Senate Environment and Public Works Committee, and Sen. James Inhofe (R-Okla.), the committee's ranking minority member, calls for a two-year reauthorization of the nation's surface transportation program at current funding levels, which are about $42 billion a year. The last multiyear reauthorization bill was signed into law in 2005. It expires on Sept. 30.
By contrast, a proposal announced July 7 by Rep. John L. Mica (R-Fla.), chairman of the House Transportation and Infrastructure Committee, calls for $230 billion in funding over six years, a figure that represents a 35-percent reduction from current funding levels and which has been criticized by various groups, including the U.S. Chamber of Commerce, as inadequate to support the nation's future infrastructure needs.
Boxer said in a statement that her approach is a "clear rejection" of the funding levels in the House proposal, which she warned would result in the loss of 630,000 jobs in the highway and mass transit sectors in 2012.
More significant for the freight sector is that the Boxer-Inhofe proposal creates a National Freight Program that establishes a funding formula to states for freight-dedicated highway projects, including the development of freight intermodal connectors. The proposal did not go into details on the program.
Push for a multimodal approach
Leslie Blakey, executive director of the Coalition for America's Gateways and Trade Corridors, called the Senate proposal an "essential starting point toward a comprehensive multimodal approach to our national network for moving goods." Blakey's group has argued that the total funding amount of the Mica initiative is insufficient, and criticized the plan for being virtually silent on freight-related issues or funding.
Blakey said Congress needs to appropriate between $7 billion and $10 billion a year just for dedicated freight initiatives, should identify freight projects of "national significance" that would ensure an adequate funding stream, and should create an Office of Multimodal Freight within the Department of Transportation that would coordinate with the various modal agencies on freight issues and funding efforts.
The U.S. Chamber of Commerce, which had labeled as "unacceptable" the funding levels in the Mica proposal, was unavailable to comment on the Senate version. The Chamber, which represents 3 million business members, said the Mica proposal fails to provide sufficient investment to repair and maintain the nation's crumbling infrastructure, and would devastate employment in the already-battered construction industry and damage related industries like basic materials, engineering, and design.
Cap on spending
Mica said his committee's proposal would force the federal government to spend only as much money on transportation programs as it collects, and ends the practice of spending overruns that has forced Congress to repeatedly borrow from the general treasury to fund programs that couldn't be paid for from Highway Trust Fund revenues.
The Mica initiative would also ensure that the Harbor Maintenance Trust Fund, a program paid for by user fees to fund maintenance and improvement of the nation's harbors, "be invested as intended" and not be ensnared in a "federal budgetary shell game." In addition, it encourages greater use of so-called short-sea shipping using the nation's inland waterways system by eliminating a double-taxation levy on vessels moving freight between domestic ports.
Neither House nor Senate proposals call for an increase in gasoline and diesel fuel taxes to help fund infrastructure improvements. Fuel taxes at the federal level have not been raised since 1993. The nation's trucker and shipper groups, as well as the U.S. Chamber, support a graduated fuel tax hike as long as the proceeds are earmarked exclusively for transport infrastructure improvements. However, Congress and the Obama administration, mindful of the potential voter backlash triggered by any tax increase in a fragile economy, have not considered it.
Before Boxer unveiled the Senate plan, Mica argued that a two-year reauthorization period was too short a duration, and would deprive states of the funding stability and predictability they need to plan for long-term projects.
James H. Burnley IV, who served as DOT Secretary under President Reagan and now heads the transport practice at Washington law firm Venable LLP, declined comment on the Senate plan. However, Burnley said the Mica proposal is a solid effort to get Washington to live within its means without the need to raise fuel taxes.
"Mica has crafted a package which is sized to the revenue flow," Burnley said. "It's the only possible path toward passage of a multiyear bill."
Both plans have yet to be turned into proposed legislation.