Obama introduces $556bn transportation spending plan

President Barack Obama dramatically increased transportation funds in his proposed 2012 budget. The budget includes $122bn in Department of Transportation funds for 2012, and allocates $30bn for a National Infrastructure Bank as part of a six-year surface transportation plan.

President Barack Obama dramatically increased transportation funds in his proposed 2012 budget. The budget includes $122bn in Department of Transportation funds for 2012, and allocates $30bn for a National Infrastructure Bank as part of a six-year surface transportation plan.

President Barack Obama has proposed a six-year, $556 billion transportation plan as part of his $3.7 trillion 2012 budget, giving Congress his strongest indication yet that he is ready and willing to move forward on a new transportation bill for the US.

“Even in these tough times, we have a responsibility to make smart investments in our Nation's future,” Obama said in a statement accompanying his budget proposal, citing roads and bridges as an example of investments he would not be willing to sacrifice in the face of prolonged deficits and calls for fiscal austerity.

Obama’s budget allocates $336 billion for the Department of Transportation’s surface transportation spending, which he said represents a 48 percent increase over previous levels. Obama did not provide details on how he would finance the increase but said he is “committed to working with Congress on a funding solution that does not add to the deficit”.

Obama budget:
more money for
transportation

The budget also provides $30 billion for a National Infrastructure Bank over six years. The bank would give grants and loans to projects of “regional or national significance to the economy”.  The Obama administration described the National Infrastructure Bank as “a substantial departure from the practice of funding projects based on more narrow considerations”. 

A bill to create a National Infrastructure Bank was introduced in Congress in 2007, but it failed to pass. Congress also rejected Obama’s call for a $5 billion National Infrastructure Bank in his 2010 budget, citing “the complexity of this proposal”.

High-speed rail is another proposed budget item that faces a stiff Republican challenge. The budget includes a $53 billion, six-year high-speed rail plan, and stipulates that $8 billion be dedicated to high-speed rail in 2012. When Vice President Joe Biden announced the high-speed rail proposal last week, House Transportation and Infrastructure Committee Chair John Mica, a Republican from Florida, vehemently challenged the plan, saying that “the Administration continues to squander limited taxpayer dollars on marginal projects”. 

In total, Obama’s budget includes $122 billion in Department of Transportation funds for next year. This represents a dramatic increase over the current allocation of $69 billion. In part, that increase comes from a $50 billion “boost” to transportation spending in the near term to “quickly create American jobs here at home”, according to the budget highlight.

Past attempts to get transportation legislation moving had been opposed by the President. When former House Transportation and Infrastructure Committee Chairman James Oberstar, a Democrat from Minnesota, laid out a bluebrint for $500 billion transportation bill in June 2009, Obama opted for a short-term extension of the previous bill, which passed in 2005 and expired at the end of September 2009.

Republican members of Congress, many of whom have pledged to pursue spending cuts, reacted sceptically to Obama's budget. Reince Priebus, chairman of the Republican National Committee, said “the President’s budget reflects a complete lack of seriousness about our present fiscal crisis”.

Republican Pennsylvania Representative Bill Shuster, who sits on the Republican-controlled House Transportation and Infrastructure Committee, said in a statement that the president “presented the wrong budget to Congress” and vowed to work with Republicans to present “our own budget” that would avoid the spending increases in Obama's budget.

The president received a slightly warmer response in some corners of the Senate, where Domocratic Senator Barbara Boxer of Washington, who chairs the Environment and Public Works Committee, lauded Obama's transportation proposals.

“I commend the president for his investment in transportation, which will create and save millions of jobs and ensure that our country can compete in the 21st century,” Boxer said in a statment. She added she has already started “reachingacross the aisle to build support for a robust surface transportation bill”.