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With Highway Trust Fund on brink, Obama pushes for bold GROW AMERICA plan

Tappan Zee Bridge. 200 million trips a day cross deficient bridges in the largest metro areas. The Highway Trust Fund will be bankrupt if Congress doesn't act. Obama is proposing GROW AMERICA, a 4-year $302 billion plan to rebuild infrastructure.
Tappan Zee Bridge. 200 million trips a day cross deficient bridges in the largest metro areas. The Highway Trust Fund will be bankrupt if Congress doesn't act. Obama is proposing GROW AMERICA, a 4-year $302 billion plan to rebuild infrastructure.
© 2014 Karen Rubin/news-photos-features.com

With all this back-and-forth about Boehner threatening to sue President Obama for acting where the Republicans have refused and the President daring Boehner to sue him for doing the people's business, the clearest example of Congress' gross malfeasance is the Highway Trust Fund.

For months, the White House has been sounding alarms that the Highway Trust Fund is going broke, and when that happens, work on projects throughout the 50 states will simply stop. And when they stop, they won't be able to be restarted because the season for doing work would have passed.

"Here’s the problem," the President said. "If Congress doesn’t act by September 30, to reauthorize and replenish the Highway Trust Fund, federal funding for transportation projects will simply run out. States might have to put some of their projects on hold. In fact, some already are, because they’re worried Congress won’t clear up its own gridlock. And if Congress fails to act, nearly 700,000 jobs would be at risk over the next year.

"Right now, there are more than 100,000 active projects paving roads and rebuilding bridges, modernizing our transit systems," President Obama said in a speech titled, "On Building a 21st Century Infrastructure," delivered in May in Tarrytown, at the base of the Tappan Zee Bridge..

"States might have to choose which ones to put the brake on. Some states are already starting to slow down work because they’re worried Congress won’t untangle the gridlock on time. And that’s something you should remember every time you see a story about a construction project stopped, or machines idled, or workers laid off their jobs.

"Now, so far, at least, Republicans who run this Congress seem to have a different priority. Not only have they prevented so far efforts to make sure funding is still in place for what we’ve already got, but their proposal would actually cut job-creating grant programs that have funded high-priority transportation projects in all 50 states. They’d cut them by about 80 percent. And they can’t say it’s to save money, because at the very same time, they voted for trillions of dollars in new tax cuts, weighted towards folks at the very top."

"So think about that for a second. Instead of putting more workers back on the job, they’d put those workers’ jobs at risk. Instead of breaking ground on new projects that would improve the quality of life for millions of people, they voted to give a massive tax cut to households making more than $1 million a year. Instead of making investments that grow our economy by growing the middle class, they’re still convinced that prosperity trickles down from the very top.

"If you want to tell them what you think about that, don’t worry, because usually they show up at ribbon-cuttings, for projects that they refused to fund."

This isn't a far-away problem. Long Island is, well, an island, and one that is long, larger than the country of Bermuda. We depend on bridges. We depend on tunnels. Our suburban streetscape depends on highways, especially since so many of us only sleep on Long Island, but work on Manhattan island. We have three major airports and a rail system and all of them are crumbling.

Indeed, the nation's infrastructure is in dire condition. The American Society of Civil Engineers, in its 2013 Report Card for America’s Infrastructure, gave a near-failing grade of D+ based on physical condition and needed investments for improvement. The report estimates our infrastructure needs $3.6 trillion investment by 2020.

Over 200 million trips are taken daily across deficient bridges in the nation’s 102 largest metropolitan regions. One in nine of the nation’s bridges are rated as structurally deficient, while the average age of the nation’s 607,380 bridges is 42 years. The Federal Highway Administration estimates that to eliminate the nation’s bridge backlog by 2028, we would need to invest $20.5 billion annually, while only $12.8 billion is being spent now.

Forty-two percent of America’s major urban highways are congested - like Labor Day every day - costing the economy an estimated $101 billion in wasted time and fuel annually. While federal, state, and local capital investments increased to $91 billion annually, that level of investment is well below the $170 billion in capital investment the Federal Highway Administration calculates would be needed to significantly improve conditions and performance.

Public transit infrastructure, like the Long Island Railroad, plays a vital role in our economy, connecting millions of people with jobs, medical facilities, schools, shopping, and recreation, and it is critical to the one-third of Americans who do not drive cars, the ASCE report notes. And yet, 45% of American households have no access to public transit at all and millions more have inadequate service levels. This isn't for lack of demand: Americans who do have access have increased their ridership 9.1% in the past decade, and that trend is expected to continue. Although investment in transit has also increased, deficient and deteriorating transit systems cost the U.S. economy $90 billion in 2010, with many transit agencies are struggling to maintain aging and obsolete fleets and facilities amid an economic downturn that has reduced their funding, forcing service cuts and fare increases.

This is just a portion of the report, which also covers Parks and Recreation facilities, Schools, Energy.

"Infrastructure is the foundation that connects the nation’s businesses, communities, and people, driving our economy and improving our quality of life," the executive summary concludes. "For the U.S. economy to be the most competitive in the world, we need a first class infrastructure system – transport systems that move people and goods efficiently and at reasonable cost by land, water, and air; transmission systems that deliver reliable, low-cost power from a wide range of energy sources; and water systems that drive industrial processes as well as the daily functions in our homes.

"Yet today, our infrastructure systems are failing to keep pace with the current and expanding needs, and investment in infrastructure is faltering.

"We must commit today to make our vision of the future a reality – an American infrastructure system that is the source of our prosperity."

"If we get to Sept. 30, and there hasn't been a funding solution, and there hasn't been a reauthorization extension at a minimum, we will not be able to spend money even if we have it," Transportation Secretary Anthony Fox stated. "That's another part of the crisis."

It's yet another instance of the brinksmanship style of non-governance and obstruction that Republicans have perfected since Obama came to office in 2009.

It's not that the Administration has only just begun to sound the alarm - the President has been calling for passing the Transportation bill - indeed a much broader infrastructure rebuilding plan - since January, has met with governors, has given speeches such as the one at the base of the Tappan Zee Bridge in May.

In that speech, the President did not just plead for passing the Transportation bill, but for a much more encompassing, four-year plan to significantly rebuild and improve infrastructure, the Generating Renewal, Opportunity, and Work with Accelerated Mobility, Efficiency, and Rebuilding of Infrastructure and Communities throughout America Act, or GROW AMERICA Act:

The GROW AMERICA Act, is a $302 billion, four year transportation reauthorization proposal that provides stable funding for the nation’s highways, bridges, transit, and rail systems. The Administration’s proposal is funded by supplementing current revenues with $150 billion in one-time "transition revenue" from what is being referred to as "pro-growth business tax reform."

"This will prevent Trust Fund insolvency for four years and increase investments to meet the transportation priorities and economic needs of communities across the country," the White House said. The proposal also includes a series of legislative proposals to improve project delivery and the federal permitting and regulatory review process.

In addition to enabling states and localities to have "smart" public investment and *longer-range planning, the plan does not just rely on federal spending, but on leveraging private sector investment by expanding financing options under the TIFIA Program, creating a National Infrastructure Bank and changing tax rules to encourage private investment.

Notably, the President’s FY 2015 Budget proposes a new America Fast Forward (AFF) bonds program that would build upon and expand a successful program created in the Recovery Act to attract private capital for infrastructure investments.

The highway trust fund, which was established in 1956, is funded from the 18.3 cents-per-gallon federal gas tax - an amount that hasn't been increased since 1993. But a $16 billion-per-year hole has developed - ironically - as cars have become more energy efficient. The current transportation bill includes $50 billion in infrastructure spending, but the gas tax only brings in about $34 billion per year. (see: thehill.com/policy/transportation/211336-highway-fund-running-on-fumes#ixzz36neJVqhp)

The Highway Trust Fund portion could be ,ade sp;vemt by raising the gasoline tax, which have been at 18.3 cents per gallon since 1993. Some are proposing a 15 cent increase over three year time. This would have the added benefit of encouraging conservation and the trend toward buying more fuel efficient and hybrid and electric cars, while at the same time advancing the larger public good of reducing carbon emissions.

Increasing gas taxes would be hard enough (look at the ends to which New Jersey Chris Christie went to avoid raising the gas tax). Anything that has the word "tax" in it is dead, even though Republicans love consumption taxes over income taxes because they hit those earning the least most (they simply want to use the extra revenue to pay down the national debt instead of investing in infrastructure)

And what about the other $250 billion for GROW AMERICA? The President proposes to fund the program through "pro-growth business tax reform."

What does that mean? Does it mean he thinks Congress will finally cut the $5 billion a year in federal subsidies to Big Oil, the most profitable companies in human history, and other business write-offs like yachts and private jets, or eliminating the tax incentives for off-shoring jobs, or the tax write-offs for private jets? Apparently not.

The President is looking to go after the $1-$2 trillion of untaxed foreign earnings that US companies accumulate overseas.

And this is supposed to happen before September 30? When the House makes just the briefest of appearances in July before going off to August vacation, and then returns salivating to start campaigning for the midterm elections?

How would that be possible if Obama has been proposing "corporate tax reform" for years - eliminating the corporate tax loopholes - but even though Romney and the Republicans keep saying they want "business tax reform" they never advance it - either they say tax reform can only be done comprehensively (that is by cutting Social Security and Medicare, the Earned Income Tax Credit and shredding the social safety net) or, when something "comprehensive" is proposed, refusing to do anything but singular fixes (as with Immigration reform).

Didn't they force sequester (which further cut into the Highway Trust Fund) over just this same issue of refusing to allow "corporate tax reform" without slashing social programs?

But if what is meant by "business tax reform" is the tax amnesty that the Multi-Nationals have been lobbying for and Republicans have embraced, maybe then, in fact, the transportation bill will get passed before Sept. 30.

This seems to be a compromise Obama is willing to make in order to win the greater prize of something as important as massive investment in infrastructure. He is hoping to build on major accomplishments in infrastructure over the past five years: "American workers have improved over 350,000 miles of U.S. roads and repaired or replaced over 20,000 bridges. The American Recovery and Reinvestment Act was the most significant transportation public works program since the New Deal, providing $48 billion to more than 15,000 projects across the country."

Earlier this year, the President announced $600 million in competitive TIGER grants to fund innovative transportation projects around the country.

The Administration's fast-track permitting process which enabled the Tappan Zee Bridge project to go through the permitting process in 18 months, instead of 3-5 years it normally would take, is being applied to 11 more projects, from Boston’s South Station, to Pensacola Bay Bridge, to new light-rail projects north and south of Seattle.

"We’re cutting bureaucratic red tape that stalls good projects from breaking ground. We’re launching a new national permitting center to implement these reforms. We are aiming to put every major infrastructure project on a public dashboard so everybody can go online; track our progress; hold us accountable; make sure things are coming in on time, on budget; make sure your taxpayer money is being used well, but also make sure that we’re putting folks back to work rebuilding America. That’s our goal."

Equally important to the benefits to commerce (You didn't build that), Obama points to the role of infrastructure development in creating well-paying jobs, particularly for construction workers, which saw their unemployment rate exceed 20 percent with the Financial Collapse, which the Recovery Act projects cut by more than half.

"But we can do better. We can build better -- and we have to. We’ve got ports that aren’t ready for the next generation of cargo ships. We’ve got more than 100,000 bridges that are old enough to qualify for Medicare. We’ve got leaky pipes that lose billions of gallons of drinking water every single day, even as we’ve got a severe drought in much of the West. Nearly half our people don’t have access to transit at all. And I don’t have to tell you what some of our airports look like.

"Building a world-class transportation system is one of the reasons America became an economic superpower in the first place. But over the past 50 years, as a share of our economy, our investment in transportation has shrunk by 50 percent."

"European countries now invest twice as much as we do. China invests four times as much as we do in transportation. One study recently found that over time, we’ve fallen to 19th place when it comes to the quality of our infrastructure...I want us to be first when it comes to infrastructure around the world, because businesses are going to come where there’s good infrastructure to move businesses, move people, move services.

"We shouldn’t watch the top-rated airports and seaports or the fastest rail lines or fastest Internet networks get built somewhere else -- they need to be built right here in New York, right here in the United States.

"First-class infrastructure attracts first-class jobs. Business owners don’t want a crumbling road or a bridge because then they can’t move out their stuff, and their workers aren’t as productive because it’s harder for them to get to work. They want to set up shop where there’s high-speed rail and high-speed broadband, high-tech schools, self-healing power grids, new ports, tunnels. That allows them, when they make goods here in America, to move those goods out and sell them all around the world."

Such language horrifies Republicans.

Republicans are invested in promulgating the discontent and frustration that comes from being stuck in traffic, and if a bridge falls down, well, that just shows how bad government is, rather than proves the need for what government does. They are apoplectic over the recent jobs report that showed an increase of 288,000 jobs - the fifth straight month over 200,000 jobs added- and an unemployment rate of 6.1%, the lowest since before the Bush Recession. They are the most upset if the economy actually does pick up and "lifts all boats" - that would be the worst possible thing if people are actually content and thinking that America is finally "on the right track" by the November midterm elections.

Want proof? The transportation bill Republicans have proposed would prohibit the Surface Transportation Board from taking any action to approve subsequent phases of the California High Speed Rail project between Los Angeles and San Francisco; does not fund the requested $40 million to support increased safety surrounding the transport of crude oil; cuts funding for passenger rail by $200 million; cuts funding for TIGER by $500 million and eliminate grant funding eligibility for transit and passenger rail projects.

The Rails-to-Trails Conservancy raised alarms when the House Appropriations Committee passed a transportation bill that not only would slash funding for federal TIGER grants that fund trails; but, in what seems to be just another expression of their contempt for "people," would make any funding for trails, or walking and biking facilities, ineligible for these grants.

"Rail networks and places for walking and biking have the power to revitalize and transform communities," Marianne Wesley Fowler, Senior Strategist for Policy Advocacy, wrote in an email. "They connect families to work and school, strengthen local economies and provide access to healthy outdoor recreation. " (This is a subject that we have previous discussed in the Complete Streets column).

It just goes to the mentality.

"We don’t need a “can’t do” spirit; we need a “can do” spirit," Obama said, ever the (naive) optimist. ."After all, we’re the people who, in the depths of the Depression, lifted a great bridge in California, and laid a great dam down in the Southwest, and lifted up rural America. We shrank a sprawling continent when we pounded in that final railroad spike, connected up this amazing country of ours; stretched a network of highways all across America from coast to coast. And then we connected the world with our imaginations and the Internet.

"A great nation does these things. A great nation doesn’t say “no, we can’t,” it says “yes, we can.”

A spokesperson for Congressman Steve Israel (D-NY) said she believes that Congress will approve a "patch" effectively "kicking the can down the road."

Karen Rubin, Long Island Populist Examiner
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