Yesterday, I criticized the Democrats in Congress for not offering any legislation to improve America’s rail transportation infrastructure. We need increased and improved rail passenger transportation for both economic and environmental reasons. A transportation system that relies on individually-owned and operated automobiles cannot be sustained.
Just hours after I wrote, Democratic senator Ron Wyden, with the support of Republican senators Susan Collins and John Thune, introduced a bill to spend $50 billion on transportation infrastructure. It isn’t money focused just on rail, but also on roads, bridges, transit systems, ports, and inland waterways.
Is S. 238 the right bill to start a renaissance in American rail transportation? I can’t say – S. 238 itself is not yet available to be read by the public. Here’s what Ron Wyden has to say in support of his legislation, though, and it’s something to start thinking about.
“Mr. President, despite the record transportation funding that Congress provided in the 2005 Transportation Reauthorization bill–SAFETEA-LU–our Nation’s infrastructure is being stressed to the breaking point. Our ports and rail lines are at or near capacity. Our highways are clogged.
Congress is working with President-Elect Obama on an economic stimulus package that will probably include funding for “shovel-ready” transportation projects. But even that won’t come close to rehabilitating our Nation’s transportation infrastructure.
The American Society of Civil Engineers has noted that over the next 5 years $1.6 trillion in investment is needed from all levels of government to keep our Nation’s current transportation system up to date. To put that into perspective, our Nation’s infrastructure needs roughly i times as much funding as was included in SAFETEA-LU.
The question is “Where do we find the transportation funding that our country needs to meet our transportation and our economic needs?”
Senator Thune’s and my answer is to invest in America.
Everyone agrees that our country’s infrastructure needs are tremendous. Everyone agrees that our country needs to invest more in transportation. What Congress hasn’t been able to agree on is where to find the money. Gas taxes just don’t generate enough revenues to even begin to satisfy highway and transit needs.
In this budget climate, pots of extra Federal money are not just sitting around waiting to be used, and States surely don’t have any extra money either. Most have budget deficits. All the conventional funding sources are coming up short, so Senator Thune and
I think it’s time to think outside the box–and outside the trust funds. The Federal Government is about the only entity in the country that does not borrow money for capital projects, but in this climate it should and it must.
Senator Thune and I have come up with a creative approach to provide $50 billion of additional new funding for transportation projects our country desperately needs by issuing Build America Bonds. Our country’s needs are so great that we think funding should be made available that is in addition to SAFETEA-LU.
Our legislation is not a substitute for fixing the transportation trust fund. We still must address that problem, and later this year we must start on a new Transportation bill. Our legislation is meant to provide extra money on top of regular transportation funding.
This money could not be earmarked by Congress. This will not fund any Senator’s pet project. This money will be controlled by the States, and used for the projects they think are most critical.
An annual amount of approximately $500 million from trade fees will be placed in an Infrastructure Finance Account and invested for the life of the bonds, which will generate more than enough to repay the entire $50 billion principal amount.
That means the only cost to the Government is the “interest portion” on the bonds, which is in the form of tax credits. With this funding mechanism, as little as $2 billion a year could generate the $50 billion in funding for transportation infrastructure. I call that a very smart investment in our country’s infrastructure.
This investment is badly needed.
Citizens stuck in traffic choking on exhaust need relief. Truckers who need to detour miles out of their way to avoid weight-limited bridges need relief. As our economy struggles with millions of workers losing their jobs, stagnating wages, the loss of even basic health benefits for many, and a mortgage market that is spiraling downward, the American economy desperately needs a shot in the arm.
The U.S. Department of Transportation estimates that each $1 billion of funding for transportation directly produces nearly 50,000 jobs. So under the Wyden/Thune proposal the $50 billion of new transportation funding will provide critical economic stimulus that will create up to 2.5 million family wage jobs.
This is an economic stimulus idea that will generate more funding for the economy now. It will create jobs. It’s a chance for the Federal Government to hold up its end of the bargain with our States.”