Last week, as President Obama began to wrangle support for his jobs bill, Congress quietly passed an extension to the Federal transportation and Federal Aviation Administration bills, averting potential shut downs and massive loss of funding. Congress had originally planned to pass a new highway bill this summer, but has so far been stalled by what appear to be irreconcilable differences between House Republicans and Senate Democrats.
The extension will keep the FAA funded through January and ground transportation programs funded through March, according to the Washington Post. But the extension, which averted a lapse in funding which would have halted construction projects and kept hundreds of thousands out of work, is far from a solution to the nation’s transportation funding problems.
The House committee responsible for writing new transportation legislation, the Transportation and Infrastructure Committee, is headed by Representative John Mica of Florida. Mr. Mica is the key player in the House on transportation funding, and has essentially been able to set the Republican agenda for the issue. The Transportation and Infrastructure committee released a bill outline in July that called for massive overhauls of the transportation funding program, overhauls Republicans still hope to achieve when the debate comes up again this Spring.
According to the National Journal, Mica’s bill would cut current funding levels by 35% to $230 billion over six years while eliminating dozens of programs he has deemed “duplicative.” In the bill outline, narrowing eligibility for funding is outlined, as well as a major change that would give states the ability to decide how to spend funding previously allocated for “transportation enhancements,” a term that refers to safety improvements and often includes bicycle and pedestrian infrastructure. This is in opposition to the current program, in which certain money is designated for transportation enhancements and must be spent that way.
Senator Barbara Boxer of California, the chair of the committee responsible for the Senate’s version of a transportation bill, immediately balked at Mr. Mica’s bill. The Environment and Public Works committee has yet to announce its proposal for a new transportation bill, but Senator Boxer has made clear in statements that she expects transportation programs to be funded at $500 billion over a two year period, more than twice the amount of money that Mr. Mica proposed and for only a third of the time. The Senate plan would likely also include broader eligibility of projects and would not allow as much flexibility in the spending of transportation enhancement money, which some advocacy groups fear would mean an end to state spending on bicycle and pedestrian projects.
Despite the huge difference in sticker price between the two plans, the main difference is not financial. As with all things political, the difference comes down to an ideological disagreement about the ideal size and scope of the federal government.
Mr. Mica’s plan, with its decreasing eligibility for federal funding (which would, in turn, put more pressure on states to fund projects) and its move towards eliminating dedicated funding for transportation enhancements, is essentially a call for a smaller federal government with lower spending and lower taxes. Senator Boxer’s plan, with its high spending levels, wide eligibility, and continued dedication of funds for enhancement programs, holds to the principle of using higher spending and higher taxes to create jobs and increase national infrastructure.
The conflict over the bill renewal is essentially a miniature version of the conflict that is occurring across the United States political system. Unfortunately, in the face of the 2012 elections bipartisanship is in short supply.The fact that the differences are so ideologically rooted makes it difficult to imagine a successful compromise that would lead to a new transportation bill. But whether or not it is easy to imagine, a new transportation bill must come. Infrastructure funding is what allows a global economy to function effectively. The United States transportation program funds projects that employ millions of workers throughout various sectors of the economy, while simultaneously increasing the trade and travel capacity of roads, bridges, and railways. Transportation funding is a crucial part of the solution to the economic downturn, and it must not be overlooked in the name of partisan politics.
The present impasse is not ideological. Even conservative high-priest Paul Weyrich was an outspoken advocate of infrastructure spending on passenger rail systems. However, Weyrich’s views fell out of favor, and the GOP is now guided by “Special Interests” moreso than ideology. One need only “follow the money” to discover the true motivation.
One of the most prolific economic fallacies that continues today is the notion that robbing the productivity of the private sector to pay for x-y-z public sector jobs is somehow beneficial to the economy. Total wealth creation cannot come from simply playing a shell game with other people’s money (diverting resources where they are not needed or wanted).
That jobs are created to simply “employ idle hands”, as Frederic Bastiat noted within the French Constitution, is what was described as the seen benefit. What is unseen is the loss of productive capability that would have been expressed had the money not been taken in the first place. In other words, the number of jobs “created” in one sector is often matched by the destruction of jobs from many sectors. Such a fallacy is one that continues to elude both the general public and even certain university economists, and is only a variation of the famous broken window fallacy, debunked by Bastiat more than 150 years ago. http://bastiat.org/en/
Rail is particularly egregious in this aspect. Light rail costs between $15 and $20 million or more per track mile (buses can do the same job at about 2% of the cost).
Investing in infrastructure and transportation is not just about jobs but about encouraging economic growth. To oversimplify, in the same way decreasing trade barriers improves economic growth because goods can flow freely from one area with a certain economic advantage to another, investing in infrastructure improves growth because it makes the movement of economic resources more fluid.
I would agree that the government has little ability to create jobs but in a time where the US’ long term economic future is uncertain, investing in infrastructure will encourage businesses to invest.