Federal Infrastructure Spending on Hold
A huge highway bill will be parked for now as Tea Partiers debate whether the federal government should get out of the building business.
The focus on cutting federal spending -- heightened in the wake of the midterm elections that swept many fiscal conservatives into Congress -- will deep-six President Obama’s plan to beef up spending on roads, bridges and mass transit with a six-year, $500-billion bill.
Congress instead will pass a series of short-term funding measures to keep highway and transit spending on life support during the next two years. States will get $40.2 billion a year for highway, bridge and tunnel work and an additional $10.9 billion for mass transit, the same as what they received during fiscal year 2008, when the last highway spending measure lapsed. That’s barely half what’s needed to bring all of the nation’s transportation infrastructure up to snuff.
There is a way to stretch the money with private funding, but Congress won’t cotton to it. States, along with highway and mass transit contractors, are gung ho over Obama’s plan to create an infrastructure bank that would back bonds tht states could sell to help finance highway and passenger rail projects. However, the public-private proposal is running into a buzz saw of opposition from many GOP members. They fret that the U.S. could get stuck with huge debts if states can’t pay off bondholders.
There’s also a rising tide of feeling among some Tea Partyers and other lawmakers that Uncle Sam has no business funding highway and transit construction and maintenance.
“Unless a majority of lawmakers can be convinced that transportation investment is an appropriate activity for the federal government, this well could be a prime target for shrinking the size of government,” says Janet F. Kavinoky, director of transportation infrastructure at the U.S. Chamber of Commerce.
This isn’t an idle worry. By June or so, lawmakers will face a tough choice: Shovel an additional $5 billion to $8 billion into the Highway Trust Fund or let it go broke, forcing many state infrastructure projects to grind to a halt. We don’t see this happening, but the idea is sure to energize many members of Congress -- especially the large freshman class that won election by promising to rein in federal spending -- to get the U.S. out of the highway and transit funding business altogether.