In last night’s State of the Union speech, President Obama’s displayed how transportation remains a low priority for the White House. After admitting that he did not focus on transportation in his first term, the President promised to devote more attention to it in his second term. Let’s hope this speech is not representative. It is fitting the President delivered the speech only 8 days from Groundhog Day since the President’s approach to transportation reminds many of the movie “Groundhog Day.” In the movie the main character, Bill Murray keeps reliving the same day until he changes his attitude. And similar to Groundhog Day unless the President changes his approach, he and the transportation system will keep reliving the same day again and again.
In the State of the Union speech, a President has many issues to address. And unless we want a 3-hour speech (we don’t), a President cannot detail all plans. But in President Obama’s 6,421-word speech, he spent only 192 words or two paragraphs addressing transportation. Far more time was devoted to environmental issues (592 words) of less concern to most Americans.
And the context of those 192 words is mostly forgettable:
America’s energy sector is just one part of an aging infrastructure badly in need of repair. Ask any CEO where they’d rather locate and hire: a country with deteriorating roads and bridges, or one with high-speed rail and internet; high-tech schools and self-healing power grids. The CEO of Siemens America – a company that brought hundreds of new jobs to North Carolina – has said that if we upgrade our infrastructure, they’ll bring even more jobs. And I know that you want these job-creating projects in your districts. I’ve seen you all at the ribbon-cuttings.
Tonight, I propose a “Fix-It-First” program to put people to work as soon as possible on our most urgent repairs, like the nearly 70,000 structurally deficient bridges across the country. And to make sure taxpayers don’t shoulder the whole burden, I’m also proposing a Partnership to Rebuild America that attracts private capital to upgrade what our businesses need most: modern ports to move our goods; modern pipelines to withstand a storm; modern schools worthy of our children. Let’s prove that there is no better place to do business than the United States of America. And let’s start right away.
Let’s address the President’s big ideas. A Fix-It-First program is a good investment. But most departments of transportation already have such a program. Since 2000, the majority of state, county and city DOTs have moved to a state of good repair mentality where they prioritize maintenance projects. These departments already spend 60, 80, and in some cases 100% of their money on maintenance. So fix it first is a good idea. But it was innovative in 2001; in 2013 it is standard practice.
And most places would welcome private capital. In fact they already do. Some 33 states have some form of Public-Private Partnership (PPP) law. The Federal Highway Administration’s Office of Innovative already disperses TIFIA loans, private activity bonds, section 129 loans and other innovative programs. Many transit projects such as the Eagle Rail Project in Colorado use PPPs. It is good the President supports these programs. But use of private capital is neither new nor innovative.
If the President wants to increase private sector involvement, he needs to spend more time changing laws and practices and less time on grandiose statements. For example, the President wants to use PPPs to improve ports. This is a great idea. But as long as ports get free taxpayer money in the form of federal earmarks to permanently deepen their harbors, they have no incentive to partner with private entities. President Obama needs to change the law so that ports must rely at least partly on private capital to deepen their ports.
The issue the President most needs to address and did not is the cost of infrastructure projects in the U.S. One of the biggest problems is not the amount of money we spend but how we spend it. Many projects such as the New York City Second Avenue subway are ten times more expensive to construct in the U.S. than they would be in another country. Expensive art and a multitude of contractors, both largely unneeded, lead to some of these cost increases. Provisions such as Buy America and David-Bacon that increase capital and labor costs also play a role. Environmental Rules, while streamlined under MAP-21, increase costs by delaying projects. Infrastructure projects often take 12 years to be completed because of these rules. European projects can be constructed in half the time with less environmental damage than most American projects.
The President’s approach to viewing transportation as primarily a jobs program does not help. Transportation increases economic development by quickly and efficiently moving people and goods from point A to point B. In comparison, the effects of hiring a small number of temporary workers are very minor. Further, more construction workers employed and more unnecessary federal laws such as those that require a living wage, inflate the project’s cost and therefore fewer projects can be built. On some level, the President may have to choose between transportation and another policy objective. And transportation is likely to lose.
And one part of the President’s speech shows he still does not understand transportation. A CEO would choose a country with well-maintained roads and bridges over a country with poorly maintained infrastructure. But why are our bridges and roads not well maintained? Our President’s main goal is to build a multi-billion dollar high-speed rail system. And the local money that states like California are using for that project is money that they are taking from road and bridge maintenance. While a high-speed rail system is a nice dream, most states with constrained budgets cannot build high-speed rail, and upgrade and improve their transportation networks. As President Obama mentioned in his failed joke--politicians love ribbon-cuttings. And given a choice between the ribbon cutting of a new largely useless train line and the maintenance of existing highway and transit systems, politicians will choose the ribbon cutting. This combined with federal pressure to accept free money leads politicians to choose high-speed rail over maintenance.
And the President once again pushed for unrealistic, unworkable solutions. As Politico’s Morning Transportation elegantly puts it:
President Barack Obama bemoans the country’s crumbling infrastructure, offers up a $50 billion package of immediate spending on transportation infrastructure and says we should pay for a long-term boost in spending with war savings.
This is another example of reliving Groundhog Day. As mentioned earlier, the reason that the country’s infrastructure is crumbling is because the President has been pursuing large-scale, sexy construction projects instead of needed maintenance. Transportation projects take a long time to build; immediate short-term spending might fit the President’s Economic Stimulus goals but does not improve the transportation network. And the war savings money is fictional. The President is using money towards transportation that he never intends to spend.
And transportation supporters in Congress are growing increasingly frustrated. All quotes are from Politico Morning Transportation. Oregon Representative DeFazio would like:
(A) new emphasis on delivery here.
Earl Blumenauer when asked about budget specifics:
Well, let’s see what comes with the budget.
And those are the Democrats. The Republicans were more skeptical. Jeff Denham asks,
It certainly is encouraging to hear him talk about building things across the nation. The real question is at what cost and where does the money come from? With high-speed rail, again, other countries are doing it. But they’re doing it at a far less cost than we are and they’re doing it in a far greater speeds with greater ridership numbers.
And Transportation and Infrastructure Chairman Bill Shuster was not a fan of the speech,
He didn’t say anything. We’ve heard some of this stuff before; how’s he going to pay for it? I think he’s lying about CEOs — they want to invest in a country that has high-speed rail? Really? Tell me what CEO said that, that cares about high-speed rail. Manufacturers want to invest in a country that has roads that are built, they want the infrastructure to be right for the transportation system, but to say one of the reasons they’re going to invest in America and manufacturing plants is because of because of high-speed rail is crazy,
While slightly better than past speeches, the President is still presenting variations on the same old transportation vision. He finally highlighted the importance of infrastructure maintenance and the use of the private sector, but some of his policies such as large grants for HSR show he still does not understand transportation. Hopefully, his next Secretary of Transportation will create a comprehensive transportation plan by considering why the U.S. does not have a better transportation system. Until then, the U.S. will remain stuck in a version of Groundhog Day. And unlike the movie all Americans, and not just Bill Murray, are reliving the same scenario again and again.