Obama Floats Billions In New Transportation Spending

The president wants Congress to pass a four-year $302 billion transportation reauthorization measure.
Source: U.S. Department of Transportation

Source: U.S. Department of Transportation

CAPITOL HILL (TRNS) — President Obama wants lawmakers to put aside their differences and approve a surface transportation package valued at over $300 billion.

The White House says that the new funding would “modernize our nation’s infrastructure and ensure the health and growth of these critical programs for the future while supporting millions of jobs.”

The breakdown of the spending proposal looks like this:

  • $206 billion to invest in our nation’s highway system and road safety. The proposal will increase the amount of highway funds by 22 percent annually, for a total of about $199 billion over the four years. The proposal would also provide more than $7 billion to improve safety for all users of our highways and roads.
  • $72 billion to invest in transit systems and expand transportation options. The proposal increases average transit spending by nearly 70 percent annually, for a total program of $72 billion over four years, which will enable the expansion of new projects (e.g., light rail, street cars, bus rapid transit, etc.) in suburbs, fast-growing cities, small towns, and aging rural communities, while still maintaining existing transit systems.
  • $19 billion in dedicated funding for rail programs. The proposal also includes nearly $5 of billion annually for high performance and passenger rail programs with a focus on improving the connections between key regional city pairs and high traffic corridors throughout the country.
  • $9 billion in competitive funding to spur innovation. The proposal will make permanent and provide $5 billion over four years, an increase of more than 100 percent, for the highly successfully TIGER competitive grant program and propose $4 billion of competitively awarded funding over four years to incentivize innovation and local policy reforms to encourage better performance, productivity, and cost-effectiveness in our transportation systems.

During a visit to the Union Depot train station in Saint Paul, Minnesota today, Obama warned that federal highway funding is set to dry up later this summer, and asked Congress for $63 billion to address that expected shortfall. The authorization for federal transportation funding expires at the end of September.

In order to offset the cost of all the new spending, Obama recycled an old idea to reform the business tax code in a “pro-growth” manner. Doing so, he said, would generate $150 billion, or about half of what the Highway Trust Fund is expected to be over the next four years. Earlier, when asked about the specifics of the tax plan, White House Deputy Press Secretary Josh Earnest said it would involve “closing the kind of loopholes that have riddled the business tax code, that don’t create growth, that don’t create jobs” and “loopholes that are related to tax policies that are an incentive for companies to ship jobs overseas.”

Some Democrats want Obama to raise the federal gas tax, which is currently 18.4 percent. U.S. Transportation Secretary Anthony Foxx has said that the fund could dry up by August.

“There’s some structural problems with the funding in the highway trust fund because it’s gas tax dependent,” Foxx said today. “The one thing nobody wants to do is see the Highway Trust fund go insolvent because that would be a very bad thing.”

The problem will be getting Congress to act on tax reform before the elections in November. House Ways and Means Committee Chairman Dave Camp (R-Mich.) unveiled his comprehensive plan to overhaul the country’s tax code, but it’s being met with more skepticism than support due to how extensive it is.

If Congress fails to act, Obama announced that he is making $600 million in TIGER (Transportation Investment Generating Economic Recovery) grants available to fund projects across the country. The grant, which has paid out $3.5 billion so far, was established in the 2009 stimulus law, and renewed in the 2014 budget that Obama signed back in January.

The Department of Transportation says it has “received more than 5,300 applications requesting nearly $115 billion” worth of TIGER grant money over the past several years. The historic train station where Obama spoke today received $35 million in TIGER funding to help it undergo a nearly four year renovation that ended in December 2012

New grants, the White House says, would “prioritize investments for much needed repairs and to improve the safety of highways and bridges, subways and bus services, with particular attention to improving roads and bridges in rural and tribal areas. ”

Information from the Minneapolis Star-Tribune was used in this report.

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Geoff Holtzman
Geoff Holtzman is Talk Radio News Service's Deputy Bureau Chief. As one of TRNS's primary correspondents, he helps cover the White House and Capitol Hill. Geoff also covered the 2012 presidential campaign, following the candidates to Iowa, New Hampshire, South Carolina, North Carolina, Florida and elsewhere. In the process, he learned that not all Motel 6's are created equal. Follow Geoff on Twitter @Geoff_Holtzman.

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