Obama’s New Transportation Budget: The Good, the Bad, and the Ugly

With federal transportation funding on track to run dry by May 31, Washington lawmakers are gearing up again to reset national transportation policy… or, if that doesn’t work out, to limp along indefinitely under the status quo.

Unlike the U.S., China is opening high-capacity transit lines left and right. Photo of Beijing metro: Xinhua

Today President Obama unveiled his opening bid in this process. The $478-billion, six-year plan from the White House includes many of the proposals the administration unveiled last year. Congress didn’t advance those ideas then, and with the GOP now controlling both houses, chances remain slim for reforming highway-centric federal transportation policy.

But the White House budget document remains the best summary of the Obama team’s transportation policy agenda. The ideas are intriguing even if they’re politically improbable.

Here’s a look at the highlights [PDF].

The Good

Boosts Transit Funding: Obama proposes a large increase in transit funding, budgeting $23 billion in 2016 and a total of $123 billion to transit over six years. That would represent a 75 percent increase over current levels. The would go toward both expansions and the maintenance and improvement of light rail, BRT, subway, and commuter rail networks.

Promotes State DOT Reform: The Fixing and Accelerating Surface Transportation program would “create incentives” for state DOTs and other transportation agencies to reform how they approach road safety and congestion management. Funded at $1 billion annually, the program would fund initiatives like “distracted driving (safety) requirements or modifying transportation plans to include mass transit, bike, and pedestrian options,” the White House says.

Expands TIGER: The Obama budget would increase funding for the popular TIGER program to $1.25 billion annually, up from about $500 million in 2015. TIGER lets cities and local transportation agencies directly access federal funding for their projects through a competitive grant process, allowing for more rapid progress on multi-modal projects like the Indianapolis Cultural Trail.

Prioritizes Bridge Repair: About $5 billion per year would be set aside for fixing bridges and roads that are “deficient” and “pose a safety risk.” (Caveat: Depending on how this program is structured, it could be used by states and localities as a backdoor way to pay for highway expansions that are tenuously justified on safety grounds.)

The Bad

More Money for Highway-Obsessed State DOTs: The incentives to reform how state DOTs spend money will need to be very strong, because the budget increases the amount of money distributed to them by about 25 percent, to $50 billion annually. While this is a smaller percentage increase than the boost for transit Obama is proposing, it will mean more money for agencies that still haven’t figured out how to kick the highway expansion habit.

No Real Funding Fix: Obama wants to pay for his plan with a one-time tax assessment on corporate foreign earnings — meaning this is not a renewable funding source, but another stop gap funded by a mechanism that has nothing to do with the transportation system. The proposal is only slightly less gimmicky than the overseas “tax holiday” proposed by Senators Rand Paul (R-Kentucky) and Barbara Boxer (D-California).

So even at this early stage, all parties have punted on the idea of raising the gas tax, even though with gas prices at remarkable lows, drivers would hardly notice.

The Ugly

Prospects for Passage: While the policy ideas look promising, as long as Congress remains reflexively opposed to the White House, the transportation budget is mostly an exercise in laying out a future agenda, not crafting new legislation.

  • Larry Littlefield

    Obama has been a disappointment, and the Republicans have been a disaster.

    All the more reason to eliminate all federal infrastructure funding. I’m not saying this because I have the best run state in the nation, either. But worse is worse.

  • Reuben

    Before we rightfully put money into
    capital projects, the US desperately needs to reform how we conduct capital
    infrastructure projects. We never will be able to build things as economically
    as countries with lax labor laws and no consideration of the people or the environment
    around the project, but we can decrease costs while minimizing destruction.

  • RGuinart

    Seems like you should caveat the TIGER grant expansion as well. It is discretionary, run out of the DOT Secretary’s office and not FHWA, and could come back to bite transit and conscientious development advocates in the future–depending on who is in the White House…
    Also, more money for the SDOTs is not necessarily a bad thing (though I am familiar with this blog’s stance on highway construction in general), given that most of that money will go toward maintenance, operations, and repair of current facilities.

  • theqin

    I feel like the tax holiday shouldn’t be used to more or less balance a transit budget. Instead the proceeds should go into a fund with dedicated results — interstate HSR, bicycle superhighways, a federal broadband network or something like that.

  • kclo3

    Isn’t it better that TIGER is kept separate from FHWA? The merit-based, non-specific grant funds much more multi-modal projects proportionally than the HTF does.

  • RGuinart

    That is definitely a question worth debating. The programs funded by the HTF build a lot more multimodal projects than TIGER, on the whole, but TIGER may have the most impact on a per-project basis.
    That being said, because TIGER is not run by formula, but is discretionary, there is always the chance it could be awarded for political reasons just as much (if not more) than for empirical ones. Some would argue it is already happening this way, with blue states/metros benefiting from TIGER more than red ones…

  • agorabum

    And how exactly does your proposal improve things? I don’t see any evidence that leaving all transportation funding at the state level would help things.

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