Fiscal Cliff Deal Leaves Big Questions on Transportation

The most significant part of the fiscal cliff deal for transportation was the bump that some transit riders got in the form of a commuter tax break that’s now on par with what drivers get. There are two more minor elements in the bill for transportation — both of them random enough to fit into the Washington Post’s list of “weird” provisions in the deal — but Congress punted on the bigger questions for another two months.

Electric motorcycle enthusiasts got a tax break in the fiscal cliff deal, but there wasn't much else for transportation. Photo: ##http://www.engadget.com/2008/10/24/electric-motorsports-gpr-s-e-motorcycle-available-now-for-8-00/##Engadget##

Here’s what they did decide:

Extension of the Railroad Track Maintenance Credit. This provision has been around since 2004 but expired last January. It gives a tax credit to shortline railroads for maintenance work they do on their tracks. The fiscal cliff deal extends this tax credit until next January.

The credit encourages shortline railroads to invest in repair, rather than abandon the lines that serve 11,000 rail shippers in 49 states.

“This bill is not about saving short line railroads,” lobbyist Adam Nordstrom told a trade magazine. “It is about keeping short line railroad customers connected to the national railroad network with adequate and safe rail service, which is why this provision has such broad appeal.”

Extension of Credit For 2- or 3-Wheeled Plug-In Electric Vehicles. This tax credit, which can cover up to 10 percent of the vehicle’s cost up to a maximum of $2,500, applies to electric motorcycles but not electric bikes. To qualify, the vehicle has to have a 2.5 kilowatt-hour battery and be capable of speeds higher than 45 miles per hour. Electric bikes top out at about 20 miles an hour by law.

Meanwhile, the fiscal cliff agreement between Congress and the White House postponed the day of reckoning for the “budget sequester” two more months. The cuts in the sequester included an 8 percent reduction in all discretionary spending, which would have taken a bite out of new transit construction and Amtrak funding. The threat of those cuts still hangs over the next round of budget negotiations, which face a March 1 deadline.

At that time, the debt ceiling will need to be raised again and the interim federal budget will be expiring. So don’t expect a measured, thoughtful debate over solutions to long-term policy and economic issues. Expect another frenzied bout of negotiations, characterized more by finger-pointing and name-calling than substance, and another punt of some kind.

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