President Obama outlines $302-billion, four-year surface transportation reauthorization effort

Written by Mischa Wanek-Libman, editor
image description
President Barack Obama sits in the cab and talks with a worker during a tour of the Light Rail Maintenance Building in St. Paul, Minn., Feb. 26, 2014.
Official White House Photo by Pete Souza

President Obama proposed a $302-billion, four-year surface transportation reauthorization effort while visiting the historic Union Depot train station in Saint Paul, Minn.

Calling the plan an “opportunity agenda,” the president said the proposal will promote job growth while repairing and modernizing the nation’s transportation infrastructure.

He pointed to other countries, such as China and Germany, which spend twice the percentage of GDP on infrastructure as the United States.

“Other countries are not waiting to rebuild their infrastructure. They’re trying to out-build us today so they can out-compete us tomorrow…because they know that if they have the fastest trains on the planet or the highest-rated airports or the busiest, most efficient ports that businesses will go there,” said Obama.

The proposal prioritizes improvements to existing infrastructure, labeled “fix-it-first” investments, and includes $63 billion to fill the funding gap in the Highway Trust Fund.

The plan’s rail-related initiatives include:

  • $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 to the TIGER 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.
  • $10 billion for a new freight program to strengthening America’s exports and trade. The proposal would create a new $10-billion multimodal freight grant program – in partnership with state and local officials and private sector and labor representatives – for rail, highway and port projects that address the greatest needs for the efficient movement of goods across the country and abroad.
  • $4 billion to attract private investment in transportation infrastructure. The proposal calls for continued funding of $1 billion in annual credit subsidy for the successful TIFIA loan program that will facilitate increased private investment in transportation infrastructure while protecting taxpayer interests.

As far as how to pay for all of this, the president would like to use $150 billion in one-time transition revenue from pro-growth business tax reform, but said he “will work closely with Congress and listen to their ideas for how to achieve this important objective.”

“Next week, I’m going to send congress a budget that funds rebuilding our transportation infrastructure in a more responsible way — by doing it over four years, which gives cities and states and private investors the certainty they need to plan major projects,” President Obama said. “All told, my transportation budget will support millions of jobs nationwide. And we’ll pay for these investments in part by simplifying the tax code. We’re going to close wasteful tax loopholes, lower tax rates for businesses that create jobs here at home, stop rewarding companies for sending jobs to other countries, use the money we save in this transition to create good jobs with good wages rebuilding America.”

In response to the president’s plan to include dedicated federal funding for passenger rail programs, Amtrak President and CEO Joe Boardman said, “Passenger rail is indispensable to helping the United States meet our national goals of competitiveness, job creation and economic growth.

“Having a predictable and dedicated federal funding source for passenger rail is the right policy for America. A multi-year planning and construction program for high-performing, high-capacity passenger rail will connect key regions and unleash our nation’s economic potential now trapped by clogged highways and airports.

“Nowhere is the connection between passenger rail and economic growth stronger than in the Northeast Corridor, where demand for rail service is at record levels, but dependent on century old infrastructure. A world-class economy needs a world-class transportation system and passenger rail is the solution that our global competitors have already figured out.

“It is entirely appropriate that a portion of any revenue generated from tax reform be dedicated for improving passenger rail. Just as a modern and efficient tax code is important to business competitiveness, so too, is a modern and efficient national passenger rail network.”

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