There’s no realistic long-term fix for transportation infrastructure waiting in the wings. Nation's potholes need a big fix

The nation’s population is growing at a steady pace, yet infrastructure investments lag. The lifelines of commerce — roads, bridges, runways, ports — are showing their age, and in this era of fiscal austerity it may be a long time before they get rebuilt.

As Transportation Secretary Ray LaHood likes to say, the nation is “one big pothole.”


While Congress may come to terms in conference on patching up the nation’s transportation wounds, there’s no realistic long-term fix waiting in the wings. The problem — as is the case throughout all modes of transportation — comes down to money. The most plausible possibilities to address the deep shortfalls in gasoline tax revenues that fuel the system won’t happen anytime soon. People are driving less or in more efficient cars — and raising the gas tax is a nonstarter in Washington.

The best-case scenario would be little more than a temporary reprieve, leaving Congress until January to start addressing the problem again. And many believe the administration — whoever is in office — will have to lead the way.

“The aspiration is to get a bill that carries us through the end of the next fiscal year, and then in writing hopefully a new multiyear bill in the next administration,” said James Burnley, former transportation secretary under Ronald Reagan, now a partner with Venable. “If the secretary of transportation is willing and able to provide this kind of leadership, it could make a big difference.”

If President Barack Obama retains the White House, his administration will have to step up its involvement in the legislative details of the transportation bill, which some have criticized as lacking.

Obama’s first substantive policy decision related to the transportation bill after taking office was to push for an 18-month extension instead of getting behind then-House Transportation and Infrastructure Committee Chairman Jim Oberstar’s bill. And though the administration has sketched out the bones of a plan in its past few budgets, it has failed to submit a full legislative proposal for the transportation bill.

“I think the administration does need to be one of the key leaders in this. It’s fair to say they haven’t really exerted that kind of effort to this point,” said Jack Basso, director of program finance and management at the American Association of State Highway and Transportation Officials. “Any bills I’ve dealt with … the administration was always a key player in there and had to be to bring parties together.”

A Department of Transportation spokesman countered the criticism by saying that LaHood has “led the call for a long-term, bipartisan transportation bill.”

“For almost two years now, in official hearings and at public events across the country, he has repeatedly called on Congress to pass the president’s transportation budget proposal — a legislative blueprint that supports our specific transportation priorities and is fully paid for,” the agency said.

The financing fiasco has been well-known for years — in fact, the last transportation bill, enacted in 2005, ordered up a blue-ribbon commission tasked with studying the financing problem and making recommendations for how to fix it.

The National Surface Transportation Policy and Revenue Study Commission’s final report, issued in January 2008, a year before the last transportation bill was to expire, recommended that the country needs to be investing at least $225 billion annually from “all sources” for the next 50 years in order to upgrade infrastructure to a state of good repair and make transportation advances.

The Senate’s current transportation bill, in comparison, would fund highways and transit at $109 billion over two years.

The study also recommended, among other things, that the gasoline tax be raised between five to eight cents per gallon over the next five years, and then index it to inflation.

Basso agreed that the issue is far from new. He noted that in 2006, a year after the last transportation bill was enacted, Congress held a hearing related to the financing issue.

“The specter of this revenue problem started to surface and the question put before the Congressional Budget Office was, ‘How did we get into this situation, why didn’t we know about this?’” Basso said. “CBO looked up and — I remember, this was just comical — pretty much said, ‘Oh, we told you this back when you passed the bill,’ and that was the end of the discussion.

“So I guess the answer was, back when they passed the bill, nobody really wanted to deal with that or the assumption was that would get fixed later.”

But so far, it hasn’t been fixed. Lawmakers have only managed to punt, and there’s little reason to think that a viable long-term financing solution is achievable in 15 months or less.

The basic problem confronting policymakers is that the fund that fuels federal transportation programs — called the Highway Trust Fund, which is fueled by gas tax revenues — isn’t taking in enough money to keep up with needs.

That’s forced Congress to transfer billions of dollars into the Highway Trust Fund from general revenues in order to limp along to the current moment in time. This Band-Aid approach is only expected to carry the country through some point in fiscal 2013 before the fund will again start experiencing a shortfall.

Raising the gas tax — the 18.4 cents-per-gallon levy hasn’t been changed since 1993 — would be the quickest fix. Raising the tax wouldn’t require any new mechanisms or bureaucracy, but it’s a no-go with politicians in this economy. Not raising the gas tax, in fact, is one of the few things that can garner bipartisan, bicameral agreement and Obama’s endorsement.

The other option that often gets discussed as a replacement or supplement for the gas tax is a system that would charge motorists based on how far they’d traveled, called vehicle miles traveled, or VMT.

But that shift would require a significant technological effort — equipment would have to be researched, developed, tested and certified. A bureaucracy would have to be created to collect the money and ferret out abuse. And consumers’ privacy concerns would have to be allayed.

“We can’t just consider VMT as transportation people, that’s going to get us in trouble,” Janet Kavinoky, executive director of transportation and infrastructure at the U.S. Chamber of Commerce, said during POLITICO Pro’s transportation launch event. “I think we can’t dismiss any of those technical or privacy concerns; if Congress is faced with a proposal that’s not fully fleshed out in those areas, it could set back the question of VMT for years and years.”

What, then, might happen? The default option may end up being an increasing expansion of tolling on interstates or greater construction of toll roads. Or Congress may decide to simply make transportation spending all discretionary instead of the current special class of spending it now enjoys, making it subject to the vagaries of the annual appropriations cycle.

That’s an option the transportation lobby really doesn’t want to contemplate — but it’s a real one nonetheless.

“If they can’t find a solution, that’s kind of, I guess, the worst-case scenario — that if you then have a long-term capital investment program funded from a discretionary program, that leaves uncertainty in long-term capital planning,” said Jeff Shoaf, senior executive director at the Associated General Contractors of America. “We don’t want to get to that point.”

In addition, Basso said, this sort of change would pit transportation programs against other discretionary programs such as education and health care.

“I think it’s fair to say, at least in my mind, that highways and transit will not fare real well in the competition in domestic discretionary spending programs where you’re dealing with education, health care, defense, many other things that are pretty high profile,” Basso said. “So the future will not be so bright, if that’s the case.”