March 2, 2011

March 2, 2011 | Commentary on Budget and Spending

Obama Busts the Budget for Amtrak and ‘Livability’

Following November’s “shellacking” at the polls, President Obama agreed that more fiscal restraint would be in order and submitted a 2012 budget proposal that pretends to meet that goal.

That pretense, however, apparently doesn’t extend to Department of Transportation (DOT) Secretary Ray LaHood, whose department is seeking an 84 percent increase in spending over 2010 levels. Jumping from $58 billion to $107 billion, transportation spending would grow more than 10 times faster than would all federal spending over the period.

Oddly, but not surprisingly, in the next fiscal year, 2013, total transportation spending would decline $30 billion to $77 billion, suggesting that this lopsided spending plan would be something of a political two-fer for Obama: an attempt to both validate his borrow-and-spend policies, and lavish money on supporters prior to the election.

Added to whatever the president hopes to gain from this costly search for validation, is the alluring prospect that a big chunk of the transportation spending will go through the hands of one of his core constituencies - members of labor unions and their leaders.

For starters, all workers on federally supported construction projects must be paid “prevailing” wages in accordance with the Davis-Bacon Act, and these wages are higher than those in the competitive market and generally conform to wages common to union contracts.

In a recent study, the Heritage Foundation concluded that the Davis-Bacon Act increases the cost of federal construction projects by 9.9 percent, and its repeal would create 155,000 more construction jobs at the same cost to taxpayers.

But Davis Bacon is not the only cost problem in federal transportation spending. All federally funded transit systems are operated by unionized workers who are paid wages and benefits (and provided costly job protections under Section 13(c) of the Federal Transit Act and other federal statutes ) well above those of comparable workers in the private sector, whether unionized or not.

A third and fourth reason for the explosion in proposed transportation spending is the president’s commitment to create two new programs – a livability program and a new train program where Amtrak gets to masquerade as high speed rail. Both programs have strong appeal to unions and environmentalists, and combined would cost $101 billion over the next six years.

Despite his State of the Union proclamation to spend $56 billion on HSR over five years, the President’s transportation budget offers no such plan. Of this sum, $15 billion would go to slow-speed Amtrak, while the remainder is for a network development program providing “convenient access to a passenger rail system featuring high-speed rail service.”

The key word here is featuring, used in the same sense that a TV variety show from the 1950s would feature dog tricks among the dozen or so other featured acts, including Amtrak.

Ray LaHood defines livability as “being able to take your kids to school, go to work, see a doctor, drop by the grocery or post office, go out to dinner and a movie, and play with your kids in a park, all without having to get in your car.”

Achieving the LaHood vision means nudging/forcing/coercing people into buses or trolleys, and creating tighter living arrangements. The president proposes $48.1 billion over six years to implement the LaHood social engineering scheme.

Lucky for America there is no chance any of this will be enacted. In the weeks and months leading up to the budget’s release, the governors of three states rejected the president’s Amtrak/HSR plans for their states and sent $3.7 billion back to Washington.

Reflecting how little confidence the Congress has in the president’s DOT, the House of Representatives cut the transportation budget more than any other. And Republicans aren’t the only opponents of Obama’s transportation policy.

In the last Congress, the Democrat-controlled Senate and House Appropriations committees rejected his infrastructure bank proposal, but he is asking for it again, and the price tag is $30 billion over six years. With federal transportation programs becoming little more than political slush funds, perhaps it’s time to turn the program back to the states.

Dr. Ronald D. Utt is the Herbert and Joyce Morgan Senior Research Fellow at the Heritage Foundation.

About the Author

Ronald D. Utt, Ph.D. Herbert and Joyce Morgan Senior Research Fellow

Related Issues: Budget and Spending

First appeared in The Examiner