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White House, Congress Working on $400B-$500B Measure

JAN 13, 2010 6:12pm ET
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The Obama administration is working with Congress on a multi-year transportation bill that it expects will cost between $400 billion to $500 billion, Transportation Department Secretary Ray LaHood said at a conference here yesterday.

“President Obama wants a robust, comprehensive transportation bill that meets the needs of America. The problem is that project, that bill, costs between four or five hundred billion dollars,” he said at the Transportation Research Board’s annual meeting.

The administration wants to “pursue more flexible partnerships with states,” metropolitan planning organizations, and local governments, LaHood added.

He acknowledged the “criticism of the delay” in consideration of a new bill that would replace the Safe, Accountable, Flexible, Efficient Transportation Equity Act: a Legacy for Users, or SAFETEA-LU, which expired Sept. 30. The White House originally asked Congress to push the reauthorization back 18 months, angering House transportation leaders who had already introduced a reauthorization bill.

Most industry insiders predict it will be at least a year before a new law is passed. LaHood was more optimistic, saying, “I believe we will get there this year.”

LaHood’s statements came amid reports of the White House cobbling together its own multi-year bill at the request of Congress. Asked about that, the DOT secretary would only tell reporters, “we’re going to work with Congress” on drafting a bill.

“They don’t have to draft their own bill, because we already drafted it for them,” said Jim Berard, spokesman for the House Transportation and ­Infrastructure Committee. If there was a request for White House legislation, it “certainly didn’t come from our ­committee,” he said.

LaHood told reporters that they will see the administration’s priorities for transportation in Obama’s fiscal 2011 budget request, which is expected to be released Feb 1.

He also addressed speculation about an upcoming jobs bill.

The administration wants a jobs bill to augment the Transportation Investment Generating Economic Recovery discretionary grant program, LaHood said.

The so-called TIGER program was launched as part of the American Recovery and Reinvestment Act with a meager $1.5 billion, which was only enough to fund a fraction of the applications state and local governments submitted to the Department of Transportation.

Earlier this week, the conference included a panel on ARRA funding from the public and private sector perspectives, including a discussion of where to go with the next jobs bill.

Kathleen Penney of CH2M Hill, an engineering, procurement, and construction company, said that it was probably a good thing that ARRA funding was restricted to federal-aid highways, or “we would have never gotten out of the gate.”

“In the next round, perhaps allowing money for the non-federal aid [highway] system would be a good idea,” she said.

One challenge currently facing states and localities is the double-edged sword resulting from below-cost construction, said Katherine Siggerud of the Government Accountability Office. On the one hand, governments are getting more for their dollar compared with original cost estimates for many of their projects. On the other hand, they have to find a way to re-obligate the unspent money before the statutory deadlines or risk losing it.

Contracts are being awarded below cost projections in California, Georgia, Massachusetts, and Texas, for starters, according to Siggerud. Massachusetts contracts are coming in at 15% less than expected, and Texas contracts are 30% less.

In addition, local and regional areas are not spending their money quickly.

“Obligations for projects in sub-allocated areas, while increasing, are generally lagging behind obligations for statewide projects in most states,” including ­Arizona and New Jersey, Siggerud said.

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