Monday, February 07, 2005

Bush Budget on Transport - A First Glance

Today the Bush Administration unveiled its 2006 budget request to Congress. As we have discussed earlier, the state of federal transportation spending---essential to urban and suburban development--has been uncertain for more than a year.

In today's budget request, the administration seems to have relented on earlier threats to veto a transportation reauthorization bill that exceeded $256 billion over six years. The administration is now setting forth $283.9 billion which exceeds the amount the House of Representatives approved during last year's stalled negotiations ($275 billion) but still falls short of the Senate preference ($318 billion).

It is good to see the administration up its committments, but there are still numerous unanswered questions. A statement by White House Budget Director Joshua Bolten at his press conference makes me cautious:

The amount we are carrying in the budget for a six-year highway bill is $283.9 billion, which reflects an understanding between the administration and the leadership on what a reasonable bill that meets our infrastructure needs, but also ensures that the trust fund, the highway trust fund is able to carry out its obligations into the future, without requiring money being brought over from the general fund.

Essentially Bolten is saying, "don't expect any money from the general fund to finance transportation." There are serious questions about relying on the Highway Trust Fund for federal transportation spending. Much of that fund comes from user fees and fuel taxes. There is significant worry that those fees will not be enough to meet needs--especially as fuel efficiency increases.

By ruling out discretionary spending on transportation, we can look forward to a crumbling highway system and inadequate public transit systems. We will continue to monitor transportation funding as it winds its way through Congress.