A New Transportation Secretary to Push an Old Obama Favorite: Infrastructure Spending
Democratic Charlotte Mayor Anthony Foxx has received President Barack Obama’s nomination to be the next Transportation secretary on the heels of Congress passing hurried legislation to give the Federal Aviation Administration the authority to transfer up to $253 million of its budget for operations and staffing.
“He’s got the respect of his peers, mayors and governors all across the country,” Obama said yesterday in nominating Foxx to replace retiring Secretary Ray LaHood. “And as a consequence, I think that he’s going to be extraordinarily effective. One of the things that Ray taught me in watching him do his job is that establishing personal relationships with mayors and governors and county executives makes all the difference in the world, because transportation is one of those things that -- it’s happening on the ground.”
If confirmed, Foxx will take over an agency that has been ground zero for budget debates lately with air traffic delays and a central focal point of Obama’s plans for “investment spending.”
Jay Carney, White House press secretary, said Friday the president would sign the FAA deal, but described the temporary fix as a “Band-Aid solution.”
The FAA reported commercial airline delays due to staffing issues last week, as nearly 4,000 of its employees — including air traffic controllers — began to undergo mandatory furloughs without pay. The government-imposed cuts in the FAA’s budget were part of a larger agency-wide effort to cut $1.2 trillion from federal deficits over 10 years, known as sequestration.
“The funding associated with the furloughs at the FAA is I think $253 million,” Carney said. “That’s one-half of 1 percent — one-half of 1 percent of the sequester.” He also said the sequester “was written in a way never to become law, written by and agreed to by both parties so that it would never become law because it would have these effects. It was designed to be terrible and onerous. And lo and behold, whether it was a tactical political victory for the tea party or not to embrace it, these effects are happening.”
“Step back and look at the big picture and you still see the CBO (Congressional Budget Office) estimate of 750,000 jobs that would be lost if the sequester were to run its full course, the fully half a percentage point of GDP that would be cut from our growth,” Carney added.
As with all agencies, sequestration had the Department of Transportation (DOT) preparing for the worst.
In a letter from DOT Deputy Secretary John Porcari to his agency’s staff in February — before the sequester deadline — he too warned of possible temporary furloughs for his agency’s employees.
"We will use any and all flexibilities we have to protect our core operations and mission,” the letter said. “However, our ability to do so will be limited by the rigid nature of the cuts imposed by Congress. As a result, we are closely examining contracts, grants and other forms of expenditures across the department to determine where we can reduce costs. In many cases, this could mean making cuts to vital programs or curtailing spending on contracts."
While the furloughs and cuts attempt to compensate for the country’s deteriorating budget, America’s infrastructure also shares a similar state.
According to the American Society of Civil Engineers (ASCE), 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 currently 42 years. Thirty-two percent of America’s major roads are also in poor or mediocre condition.
ASCE’s 2013 Report Card for America’s Infrastructure — which evaluates the country’s aviation, bridges, inland waterways, ports, rail, roads, and transit — gave the country’s infrastructure a poor rating of “D+” for its cumulative grade.
ASCE’s report card cited an improvement in roadway conditions in the near term, as federal, state, and local capital investments increased to $91 billion annually, but roads still received a “D” rating. “While the nation has seen some improvements in pavement conditions due to a short surge of investment from the American Recovery and Reinvestment Act, these were not sustained, long-term investments,” the report said.
In order to improve the nation’s infrastructure, ASCE says $3.6 trillion in infrastructure investment is needed by 2020. Obama’s proposed fiscal year 2014 budget calls for $3.77 trillion.
“While this proposal certainly is a step in the right direction to bolster investment levels in transportation, it’s critical that the administration put forth a clear road map with long-term funding solutions,” ASCE’s Leslie Nolen wrote in a blog post.
ASCE is not the only unsatisfied constituent calling for long-term, financially solvent solutions.
“After months of delay, President Obama proposed a budget that shows he’s out of new ideas,” said Republican National Committee Chairman Reince Priebus. “This is the same, warmed-over proposal that doesn’t address the nation’s pressing fiscal challenges – challenges that have gotten worse during his time in office. As we’ve seen before, this budget amounts to spending more money we don’t have and higher taxes and more debt to pay for the spending. And unlike the budget passed by House Republicans, this budget never balances – ever.”
“In this budget, he (Obama) claims $1.8 trillion of deficit reduction, but if you take out all of the budget gimmicks and the accounting tricks, it winnows down to a paltry $119 billion over a 10-year time frame,” said Rep. Paul Ryan (R-Wis.). “To put that in perspective, the president is proposing we spend $46.5 trillion over the next decade for the federal government, and of that, he thinks he can have $119 billion dedicated to deficit reduction.”
Infrastructure has been a longtime favorite of the Obama administration.
During the president’s 2013 State of the Union address, he proposed a “Fix it First” program, calling for $50 billion in frontloaded infrastructure investments as part of his “Plan for a Strong Middle Class & a Strong America.”
Back in 2009, the American Recovery and Reinvestment Act of 2009 that Obama signed into law obligated $48.3 billion of stimulus funds for Department of Transportation (DOT) projects, as reported Jan. 28, 2013.
On July 6, 2012, Obama also signed a multi-year transportation authorization bill, the Moving Ahead for Progress in the 21st Century Act (MAP-21), which funds transportation programs at over $105 billion for fiscal years 2013 and 2014.
But the flow of cash has ended, say infrastructure spending proponents.
Surrounded by first responders, Obama in February urged Congress to take action against the automatic budget cuts, which did not sit well with GOP leadership and didn’t make fiscal conservatives in Congress budge.
“Now for two years, I’ve offered a balanced approach to deficit reduction that would prevent these harmful cuts,” Obama said. “I outlined it again last week at the State of the Union. I am willing to cut more spending that we don’t need, get rid of programs that aren’t working. I’ve laid out specific reforms to our entitlement programs that can achieve the same amount of healthcare savings by the beginning of the next decade as the reforms that were proposed by the bipartisan Simpson-Bowles Commission.”
Obama’s event at the White House “proves once again that more than three months after the November election, President Obama still prefers campaign events to common sense, bipartisan action,” Republican Leader Mitch McConnell (Ky.) said.
At a Feb. 25 press conference, House Speaker John Boehner (R-Ohio) urged the president to “stop campaigning.” “Instead of using our military men and women as campaign props, if the president was serious he’d sit down with Harry Reid and begin to address our problems,” he said. “The House has acted twice, we shouldn’t have to act a third time before the Senate begins to do their work.”
This gridlock, however, is a situation the administration likes to find ways to work around.
Bypassing the “do-nothing” 112th Congress was the M.O. of the president’s first term in which he started his We Can’t Wait initiative. The initiative’s approach relied on avoiding Congress and taking executive actions, several of which involved expediting millions for infrastructure and transportation projects.
Back in August 2012, for instance, the administration announced that it would repurpose more than $470 million in unspent earmarks from fiscal year 2003-2006 appropriations acts. According to the DOT, 49 states, Washington, D.C., and Puerto Rico were authorized to use the funds for new infrastructure projects.
“My administration will continue to do everything we can to put Americans back to work,” Obama said at the time of the announcement, when 11.3 percent of the construction sector was unemployed. “We’re not going to let politics stand between construction workers and good jobs repairing our roads and bridges."
“At a time when one in five construction workers is out of work, these are the jobs we need, and we need them right now,” LaHood also said at the time.
Alabama was able to allocate $51,488,747.50 of unobligated balances to a total of 21 new projects; Ohio $12,536,823.13 for 15 projects.
According to Doug Hecox, public affairs specialist with the Federal Highway Administration, the various projects across the board have been underway since Dec. 1, 2012.
The sector is still struggling nearly six months later.
In fact, even more of the sector is unemployed. According to the Bureau of Labor Statistics, the unemployment rate for the construction sector is now 14.7 percent.
Hecox said he could not comment on the unemployment rate.
“It’s the start of a new year, but it’s the same old story; too many Americans are out of work,” said Rep. Bill Shuster (R-Pa.), new chairman of the Transportation and Infrastructure Committee for the 113th Congress. “President Obama refuses to make job creation and the welfare of the American people a priority. … House Republicans have been working towards real solutions and it’s time for the President and Senate Democrats to come to the table and work together to grow our economy.”