Budget increase sought for DOT, Army Corps

   President Obama is proposing a fiscal year 2013 budget for the Department of Transportation of $74 billion, 2 percent, or $1.4 billion, above the 2012 enacted amount.
   It’s one piece of a $3.8 trillion plan that raises spending to support the middle class through incentives for domestic manufacturing, lower payroll taxes, infrastructure investment and other steps while raising revenue through taxes on the wealthiest Americans and reductions in subsidies for the oil and gas industry.
   The expenditure level is based on a six-year $476 billion surface transportation reauthorization proposal by the administration for investment in highway and transit infrastructure, safety programs and DOT operations. The amount includes $305 billion to rebuild roads and bridges, a 34 percent increase over the previous authorization, and $47 billion to continue construction of a national high-speed rail network, an Obama priority. The administration says it would use money saved from the military draw downs in Afghanistan and Iraq to pay for the infrastructure program, but the war funding is borrowed and would not be a direct offset.
   In addition to the $74.3 billion budget for 2013, Obama is calling for spending $50 billion immediately to spur job growth and jump-start ready projects. He made a similar pitch in September as part of a multi-tiered plan to create jobs that the Republican-led Congress has ignored.
   The White House’s budget includes another $300 billion in stimulus spending, in addition to the $50 billion for infrastructure. The government-wide spending plan would increase the national debt to $18.7 trillion in 10 years, $1 trillion more than the administration’s forecast six months ago. 2012 also marks the fourth year in a row that the budget deficit will exceed $1 trillion, according to administration projections. 
   The Obama plan calls for converting the Highway Trust Fund, where fuel taxes and other receipts are deposited for highway and transit aid to states and cities, into a Transportation Trust Fund that would include a new mulitmodal account for passenger rail and for national infrastructure investments.
   “Although infrastructure projects take time to get underway, these investments would generate hundreds of thousands of jobs in the first few years—and in industries suffering from protracted unemployment,” the DOT said.
   The $50 billion up-front injection for infrastructure includes $26 billion for the National Highway Program and $4 billion for the National Infrastructure Investments (NII) program—formerly known as TIGER—which in the past three years has provided $2.6 billion in competitive grants to innovative partnership projects, including a heavy dose of rail and other freight-related improvements.
   The Obama administration budget would authorize the NII program at $3.4 billion through 2018 under its six-year authorization plan. The American Association of Port Authorities continues to argue that ports should get a greater cut – 25 percent – of the total grant distribution each year.
   The White House said that to expedite infrastructure projects in the pipeline federal agencies have been directed to find ways to expedite permitting and approvals for infrastructure projects.
   The DOT said it would consolidate over 55 duplicative, often earmarked highway programs into five streamlined programs” that it contends “would give states and localities greater flexibility to direct resources to their highest priorities.” The idea parallels proposals in Congress to consolidate disparate and unwieldy programs within DOT.

Mica

   U.S. Rep. John L. Mica, R-Fla., chairman of the House Transportation and Infrastructure Committee, complained the president’s proposed transportation budget “follows the same old pattern of spending more and getting less for hard-earned taxpayer dollars.”
   “The president needs to get behind the Republican transportation bill that accomplishes more with less through significant reforms including cutting in half the time it takes to complete major infrastructure projects,” he said.
   “Rather than emphasize more deficit spending, from whatever source, the President’s focus should change to making transportation programs and projects more efficient and cutting the red tape that has left even his transportation stimulus money still stuck in federal coffers. One-third of his infrastructure stimulus money is still in Washington, three years after its passage, but he proposes more. The definition of insanity is doing the same thing over and over again and expecting different results,” Mica said.
   Mica said the Republican-sponsored American Energy & Infrastructure Jobs Act before the House this week “establishes a blueprint for job creation, is responsibly paid for, and includes no earmarks, tax increases or deficit spending.”
   The Obama budget has little chance of passing Congress in its current form, political observers say, and is merely the opening gambit in what is likely to be a long and contentious negotiation to pass appropriation bills for next year.
   The fiscal year 2013 budget includes more than $1 billion to modernize the air-traffic control system and help transition from the radar-based air traffic control system to the satellite-based NextGen system.
   Funding for the Maritime Administration, which was $366 million in 2011 and estimated to be $314 million in 2012, is budgeted to rebound to $344 million.
   The AAPA issued a statement praising the administration’s “desire to prioritize both land- and water-side transportation infrastructure investments with the Department of Transportation and Corps of Engineers budgets. As the administration and Congress continue to seek ways to reduce spending, it’s imperative to focus scarce federal dollars in those areas, such as seaport-related infrastructure, that can have the greatest impact on economic growth, immediate and long-term job creation, and our current and future competitiveness in the global economy.”
   The budget provides $4.7 billion for Army Corps of Engineers Civil Works projects, a 5.4 percent decrease from the 2012 enacted level.
   The Corps of Engineers’ request for $848 million for draft navigation maintenance from the federal Harbor Maintenance Trust Fund (HMTF) is nearly a 12 percent increase ($90 million) over the fiscal 2012 request of $758 million and is $28 million more than the $830 million Congress appropriated for maintenance dredging in fiscal 2012.
   While AAPA said that is still not close to the $1.4 billion collected annually from importers and domestic shippers for deep-draft navigation maintenance dredging, “it is the highest budget request ever, and is a very positive step toward AAPA’s long-stated goal of full utilization of the Harbor Maintenance Tax for its intended purpose. Maintaining our federal navigation channels to their authorized and required dimensions will also help make U.S. exports more internationally competitive and is critical for safe access in and out of America’s seaports.”
   Both the ports of Savannah and Charleston said they were pleased that the 2013 budget includes funds for projects to deepen their harbors.
   The budget includes $2.8 million for the Savannah Harbor Expansion Project and $3.5 million for Charleston’s project to deepen the harbor beyond 45 feet.
   “The funding announced today, along with more than $180 million in state funds that have either been committed or budgeted, will allow this project to stay on track,” Georgia Gov. Nathan Deal. “We plan to work closely with the Army Corps of Engineers to ensure this project is approved and the necessary funds are in place to begin construction in the coming months.”
   The Waterways Council, Inc. (WCI) said the budget included “hugely disappointing” information about a key inland waterway project, the Olmsted Lock and Dam on the Ohio River.
   Michael J. Toohey, the trade association’s president, said there is an $800 million amount of cost escalation and over-run on the Olmsted project and a 10-year addition to the construction schedule.
   “The Olmsted project was originally authorized under the Water Resources Development Act in 1988 at a cost of $775 million, with a 7-year construction period.  Since authorization, this project has seen multiple, significant cost over-runs. As recently as last year, Olmsted’s price tag had ballooned to $2.1 billion since its authorization. Today’s re-statement may be low; it apparently does not contain an escalator for inflation, which all other Corps’ project estimates do contain.”
   He said “no other meaningful investment in modernization of our aging inland waterways infrastructure will be made for a decade, or more, if the Olmsted project continues down its current path,” adding the national economy will lose $700 million per year in benefits because of the delay in the Olmsted project.
   Toohey called for adoption of a capital plan for improving inland waterways produced last year for the Inland Waterways Users Board, a collaboration between navigation industry representatives and Corps of Engineers experts. That plan can be seen here.  — Chris Dupin and Eric Kulisch