2010 ELECTION OUTLOOK: Change back?

Sept. 30, 2010

This was a different kind of stationary coming from the president.


It was not what those in the road and bridge industry were becoming accustomed to with Barack Obama, a leader who was refusing to budge when it came to passing a transportation reauthorization bill.


The words he spoke over the Labor Day holiday came straight from the president’s desk. Before a hearty crowd in Milwaukee, Obama outlined his vision on how infrastructure should be funded long term behind an initial $50 billion investment.


This was a different kind of stationary coming from the president.

It was not what those in the road and bridge industry were becoming accustomed to with Barack Obama, a leader who was refusing to budge when it came to passing a transportation reauthorization bill.

The words he spoke over the Labor Day holiday came straight from the president’s desk. Before a hearty crowd in Milwaukee, Obama outlined his vision on how infrastructure should be funded long term behind an initial $50 billion investment.

It lacked details, but filled in a communication gap that had been growing since the passage of the American Recovery and Reinvestment Act.

“It was good to see the president talk about roads positively,” Greg Cohen, president and CEO of the American Highway Users Alliance, told Roads & Bridges. “Some highway supporters had suspected that the administration was not a big fan of roads, and to hear it from the top that roads are important and we need to invest in them and improve them, I do not see a downside to that.”

Some, however, did question his motivation. When Roads & Bridges readers were polled and asked if President Obama’s transportation talk was a ploy to gain Democratic support in November, 64% said yes, while a mere 10% thought he was actually being serious about road and bridge funding. With the Republican party showing strong numbers leading into Decision Day and the economy continuing to sputter, it appeared time once and for all for the administration to offer more hope in terms of jobs—and no sector has suffered quite like the construction industry.

“From a contractor’s perspective [Obama’s plan] was welcome because the stimulus money is running out, and once that money is gone there is going to be a big drop-off,” Brian Deery, senior director, Highway and Transportation Division, for the Associated General Contractors of America, told Roads & Bridges. “If reauthorization doesn’t happen there is going to be a huge drop-off in funding, which is going to have a devastating impact on the industry.”

There is a chance Congress’ current makeup could be smeared in a few weeks, but no matter who wins on Nov. 2, there lies an even greater chance that those who fill the seats will be far more conservative than in past movements. The result could make or break the road and bridge market.

More to bank on

President Obama did not show all of his cards during the Labor Day speech, but there was an interesting heart to the rhetoric. Obama’s transportation plan over the next six years includes the following:

  • The rebuilding of 150,000 of roads;
  • The establishment of a National Infrastructure Bank; and
  • The consolidation of more than 100 different programs that will focus on using performance measurement and “race-to-the-top” competitive pressures and fulfilling the president’s livability initiatives.
  • Obama, however, did not offer a way to fund the $50 billion measure, and at press time most were speculating that it would not make it through Congress before the year is out. However, if it was indeed an initial serving of a long-term bill there is now at least some kind of framework to work from at the House and Senate level. Still, the absence of specifics had at least one lawmaker on Capitol Hill harping on the lack of leadership that continues to plague the Obama administration. According to Rep. John Mica (R-Fla.), the Ranking Republican on the House Transportation & Infrastructure Committee, the White House has not shown any signs of being serious about transportation funding. “I have been working since the Reagan administration, and when you want to get something done you bring the players together and you see what you can achieve together,” he told Roads & Bridges. “I have never seen an operation [like the Obama administration]. Just about 90% of the time they don’t tell [T&I Committee Chairman Jim] Oberstar what is going on, let alone me.” Instead of announcing a $50 billion plan, Mica believes the administration should focus more on what has already been promised to the road and bridge industry in terms of stimulus money. “I’ve got 70% of the stimulus money still sitting in federal coffers,” he said. “The first thing we need to do is find a way to get money out faster and expedite the process.” The part of Obama’s plan that continues to increase in praise value is the formation of a National Infrastructure Bank. It has the support of Mica and would issue its own bonds of up to 50 years maturity, which in turn could initially raise $200 billion to $300 billion and eventually finance itself. There is hope that this bank would leverage private capital for projects of regional and national importance, and prospective infrastructure projects would be evaluated on consistent terms, essentially eliminating the act of earmarking, which has destroyed the value of past long-term transportation bills. It also would allow groups of states to come together and execute megaprojects. Red reckoning Just how many legs are connected to the reauthorization movement depends on what happens on Nov. 2. When Roads & Bridges readers were polled and asked if there would be a shift in power in Congress, over 70% said the Republicans would gain control of the House and almost 57% see the GOP taking over the Senate. However, the mood change may not dry up any tears that have been shed during the economic depression. When asked if a Republican-controlled House and/or Senate would help pass a long-term transportation bill, only 45.2% said yes, while 33.3% said no. “No matter what happens it is going to be a tough road with lots of road blocks,” said Cohen. “It is going to require very thoughtful, well-intentioned members of Congress who are skilled at forging coalitions among both sides.” If the Republicans do gain control of the House, which appears to be the more likely scenario, Mica would take Oberstar’s seat as chairman of the T&I Committee. As a result, the House version of the transportation bill would be rewritten under the new leadership. Oberstar included measures that put more into transit and Obama’s livability initiatives. Mica seems to favor highway-capacity expansion, but his idea for a funding mechanism does not involve a user-fee increase. Rather, it would most likely call for a heavy reliance on the National Infrastructure Bank and public-private partnerships. “I’ll sit down with Obama, I’ll sit down with [Transportation Secretary] Ray LaHood,” said Mica. “We can get stuff done if people sit down and talk about it.” Mica, however, is not warming up his seat at the front of the T&I Committee just yet. “[Roads & Bridges readers] are probably more optimistic than me,” he said. “Some days I feel very positive about it, and other days I’m just not sure if we will get the numbers.” On the Senate side, Barbara Boxer (D-Calif.), who chairs the chamber’s Environment and Public Works (EPW) Committee, is engaged in a dogfight with Republican hopeful Carly Fiorina. When Roads & Bridges readers in California were asked who would win the race, more than 53% said Fiorina, but all indicators point to this battle going down to the wire. If Boxer returns she will most likely move forward with the Senate version of the reauthorization bill. The EPW Committee was hoping to have the bill complete by the end of September, but at press time that did not seem like a possibility. If Boxer loses but the Democrats hold control of the Senate, Jim Inhofe (D-Okla.) would take command. Inhofe chaired the EPW Committee during the creation of SAFETEA-LU and has always been focused on transportation. If the Republicans take over the House, Sen. Tom Carper from Delaware will likely be named to chair the EPW Committee. Like Boxer, Carper favors the environment. He also seems to be more transit/rail oriented. Roads & Bridges readers also lean Republican in the following states: In Florida, Marco Rubio is the favorite, but Independent Charlie Crist is expected to provide some heat; In Illinois, Mark Kirk (75.9%) could dominate Democrat Alexander Giannoulias (24.1%); In Missouri, Roy Blunt (73.4%) is the projected winner over Democrat Robin Carnahan; and In Pennsylvania, Patrick Toomey (74.2%) has a strong lead over Democrat Joe Sestak. Yes or no answers The November election will not bring a monumental change in transportation policy at the state level, but Roads & Bridges readers feel strongly about the following measures that will be on the ballot: California will have three items on the ballot that will impact transportation. The first measure, if approved, would prohibit the state from raiding transportation funds under any circumstances. More than 70% of Roads & Bridges readers in California believe this will pass. Proposition 25 will allow state budget and tax increases to be passed by a simple majority vote, rather than the current two-thirds majority. More than 68% of California R&B readers believe this will not pass, but they do favor Proposition 26 (71%), which will require voter permission before any new taxes are imposed. Nevada will have a measure on the ballot that, if passed, would allow lawmakers to make certain tax changes without going to a vote of the people. Most R&B readers in Nevada (90.6%) believe this will not pass. In Wisconsin, voters in more than 30 counties will be able to vote on an amendment to the state constitution that would protect transportation funds. R&B readers in Wisconsin favor such a move (80%). R&B

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