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Federal infrastructure policy may face shipper resistance
Friday, 26 June 2009 00:00

SAN FRANCISCO—A leading industry analyst says shippers have yet to ask two key questions about a new proposed transportation law: When will the bill be enacted, and who pays for it?

When Rep. James Oberstar (D-MN), Chairman of the House Transportation and Infrastructure
Committee, unveiled his blueprint for the next surface transportation authorization bill last week, it was to “generally positive reviews,” said Kenneth Orski, a transportation analyst and publisher of Innovation NewsBriefs.

“Can the bill be enacted this year?” asked Orski, “and where will the money to fund the ambitious $500 billion program come from?

According to Orski, the first question has been pushed to the forefront by the Obama Administration. As reported in LM, Transportation Secretary LaHood told the shipping community and members of Congress that the Administration will seek an 18-month extension of the current surface transportation authorization. An estimated $13-$17 billion will be needed to fund the program extension.

Orski said that Secretary LaHood has joined a growing body of doubters that the crowded legislative calendar would permit the House and the Senate to reach agreement on a new bill before the current law expires at the end of September. This, he said, would leave the next year’s program funding in a precarious state.

“Other motivation may also lie behind Sec. LaHood’s proposal,” said Orski. “The White House may reason that by mid-2011 the economic climate will have recovered sufficiently to allow the Administration to propose a gas tax increase without suffering serious political repercussions.”

Orski observed that Congress also might be less reluctant to vote for a tax hike now that mid-term elections are over. Furthermore, by pushing enactment of the new legislation closer to the next presidential election, the Obama White House could take credit for a major piece of legislation.

“Rep. Oberstar’s bill leaves few other options on the table,” concluded Orski. “It explicitly forecloses tolling of the Interstate Highway System —a potentially large source of revenue — even though consumer surveys show that tolls are generally viewed more favorably than higher gas taxes.”

Logistics Management, 6/26/2009