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Obama’s $50 Billion Fix-It-First Program

Posted by Ken Orski on Friday, February 22nd, 2013

Innovation NewsBriefs
Vol. 24, No. 3

Reactions to President Obama’s $50 billion “Fix-It-First” infrastructure initiative continue to pour in. While the transportation industry and liberal advocacy groups publicly applaud the President, “insider reaction among the major transportation stakeholder groups amounts to profound disappointment on a private level,” wrote the influential Washington Letter on Transportation (WLT) in its latest issue. “The Nation faces an infrastructure-funding meltdown in 2014, and the President —instead of offering leadership backed by his own substantial political capital at this moment— acts as if he is oblivious to it. … Does he want to help pass bills on these vital transportation issues? Or is he content merely continuing to call on others to pass them, even if they … won’t or can’t?”
 
More WLT commentary follows below. The Washington Letter on Transportation, edited by Gary Hoitsma a former senior staff member of the U.S. Department of Transportation, is a publication of the Carmen Group, one of Washington’s leading government affairs firms. For 34 years, the respected WLT has been providing its clients and other subscribers in Washington and outside the Beltway with news and analysis of transportation policy developments emanating from the Nation’s Capital. (www.washingtonletter.com)
 
WASHINGTON LETTER ON TRANSPORTATION , Volume 34, Issue 8
 
February 19, 2013

Recycled “Fix-It-First” Plan is “Dead-on-Arrival”

President Obama continues to soak up accolades from transportation industry stakeholders for his State of the Union Address proposal last week to spend $50 billion on needed national infrastructure repairs, even though its prospects for passage are next to non-existent.  The proposal — which he dubbed “Fix-It-First” — was nearly identical to the failed infrastructure “Jobs Act” proposals he made in 2010, to another joint session of Congress in September 2011 and in his previous State of the Union Address in January 2012.  The “new” plan was part of a litany of domestic policy initiatives the President announced last week with great fanfare to kick off his second term legislative agenda.   
 
The infrastructure plan’s stated purpose is to help repair bridges and roads, create jobs, stimulate the economy and build up the middle class, all widely supported goals in the current depressed economic environment.  But as described by the President and further explained in administration documents, the President’s $50 billion infrastructure proposal cannot pass either House of Congress in its current form, and almost everyone on both sides in Washington knows it.  It is — as they say on Capitol Hill — dead on arrival.
 
The reason is that the $50 billion the President is talking about does not exist as real money sustained by actual revenues, but only as a dubious one-time accounting maneuver within a churning sea of never-ending federal deficit spending.   The plan asserts that the $50 billion will be paid for with “savings” accrued from winding down the wars in Iraq and Afghanistan.  No doubt there are some in Congress who find this plausible. But they are far from constituting a working majority in either the House or the Senate.
 
The wars – as the President himself is wont to point out with derision in any other context — were largely “paid for on a credit card”  as “emergencies,” above and beyond the normal government budget, thus adding to the Nation’s burgeoning deficits and debt.  To suggest that “savings” from this is going to pay for transportation or anything else is emblematic of current Washington dysfunction — a caricature of how far the flight from common sense and sound fiscal policy has permeated the upper reaches the political class in the Nation’s Capital.  
 
Yet, the claims on these so-called “war savings” to pay for other things continues to proliferate.  Count among them, for example, deficit reduction generally ($500 billion), multi-year surface transportation authorization ($450 billion), Medicare physicians’ payments known as the annual “doc fix” ($130 billion), all added now to the Fix-It-First plan ($50 billion).  All this, when even the more expansive estimates of ephemeral 10-year war “savings” comes to about $800 billion total.  This is the amount of deficit money spent on the wars over the last ten years, which is not planned to be spent over the next ten years, so therefore is not going to be spent, so therefore is freed up to be spent on transportation and other things.   If the math (and the logic) doesn’t seem to add up, it’s because it doesn’t.   
 
So where do we go from here on federal transportation policy?  Unless the “Fix-It-First” plan, and the President’s implicit renewed push for his $450 billion six-year surface transportation bill (also resurrected from last year), is part of a hidden agenda that involves some secret longer-term strategy to accommodate lessons learned from the failure of the 2010, 2011 and 2012 Jobs Acts and other infrastructure gambits – which is not readily apparent — the outlook is bleak.  The Nation faces an infrastructure-funding meltdown in 2014, and the President – instead of offering leadership backed by his own substantial political capital at this moment — acts as if he is oblivious to it. …
 
Insider reaction among the major transportation stakeholder groups in Washington amounts to profound disappointment on a private level that the President did not signal any new moves to use his heightened political standing in the aftermath of his reelection to confront the Nation’s real transportation funding challenges.  For many of these battle-hardened advocates who fully understand the vagaries of politics and up-and-down legislative cycles, the common if somewhat unspoken refrain is:  “If not now, when?”  When will presidential executive branch leadership emerge to help put transportation on a sustainable fiscal footing?  
 
Coupled with this is a related question:  What exactly are the President’s expectations with regard to the very transportation plans he proposes?  He knows the legislative politics as well or better than anyone in town.  Does he want to help pass bills on these vital transportation issues?  Or is he content merely continuing to call on others to pass them, even if they don’t, won’t, or can’t?

C. Kenneth Orski is a public policy consultant and former principal of the Urban Mobility Corporation. He has worked professionally in the field of transportation for over 30 years, in both the public and private sector. He is editor and publisher of Innovation NewsBriefs, now in its 22nd year of publication.

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