The late-night budget deal between President Obama and House Speaker John Boehner did not at first appear to make a real dent in the big surface transportation programs tied to freight operations.
But the agreement that averted a broad government shutdown this month looked a lot different to shipping interests in the light of day. It eliminated the $2.5 billion grants for the intercity passenger rail program, which mostly funds track and signal upgrades so freight rail corridors can carry new or faster Amtrak trains, and left many transportation industry officials more pessimistic than ever about the next multiyear surface transportation bill.
The rail programs took the biggest hits. Budget cutters also yanked $400 million in 2010 grants that were part of $2.4 billion that Florida rejected last month when it shuttered a high-speed rail project. The Department of Transportation already took project requests for the money and got applications seeking nearly $10 billion. Now the DOT will have to shrink that grant pool down to $2 billion.
Obama’s willingness to see the so-called high-speed rail program eliminated entirely for the rest of 2011 left transport interests wary.
“It’s a real concern,” said Mortimer L. Downey, senior adviser to the Parsons Brinckerhoff construction engineering firm, “that by zeroing it out for 2011, it’s no longer in the (budget) baseline.” The administration may have a fight on its hands, he said, to get that program back into future budgets.
Another industry specialist who closely tracks Washington funding issues put it more starkly. “If the administration was willing to scrap the high-speed rail program in these budget cuts — its signature transportation program — then I’m not very confident it will push hard for a big multiyear bill,” this official said, speaking on condition of anonymity.
Until now, industry groups hoped Obama and his DOT would push his plan to spend $556 billion in the next six years on a big transportation infrastructure program.
But with House and Senate panels poised to start writing that legislation in coming weeks, the 2011 budget deal may have just made things harder.
Budget cutters also took $2.5 billion from highway contracting authority, and rescinded $630 million in funds earmarked for past road or bridge projects that never got done. A Federal Highway Administration official said “there is no effect” on current agency spending from the budget deal, because the trust fund change was “a reduction of contracting authority but not funds in hand.”
But private industry observers say even reducing excess contract authority can limit the flexibility of how states’ transportation departments use their federal allocations, and that shrinking it for 2011 also can shrink it in the future.
The deal keeps alive the DOT’s discretionary “TIGER” fund for a broad range of infrastructure grants, including freight rail and port or intermodal connections that often fall outside other federal accounts.
That fund began with $1.5 billion in the 2009 economic stimulus package, followed by $600 million in a 2010 second round. The 2011 budget was automatically accruing at last year’s $600 million pace; the deal shrank that to $527 million.
Some lawmakers have sharply criticized the DOT’s tight-lipped approach for deciding who gets TIGER grants. House Transportation and Infrastructure Committee Chairman John Mica, R-Fla., says recent federal audits bolster his complaint that TIGER lacks transparency, and vows to tighten its rules.
But Obama’s High Speed and Intercity Passenger Rail program is more controversial. He launched it with $8 billion in stimulus grants, got another $2.5 billion last year, and the DOT is still trying to spend those funds. For 2011, he sought just $1 billion; until now, that was accruing at the 2010 level of $2.5 billion but not used.
Conservatives sometimes call it a big-government waste of money, or attack it for spending “high-speed” money mostly on slower-speed Amtrak lanes. Three new GOP governors rejected passenger rail projects and $3.6 billion in federal grants, citing long-term subsidy costs for their states.
It still has plenty of takers. Just before the budget deal, the DOT obligated another $300 million in rail projects across the country. Now it has $2 billion left to spend.
But that is money from the past, and it may be tough to get much more out of this Congress for the future.
Out of all the 2011 budget cuts for transportation, “the high-speed rail one, I think, is really damaging,” Downey said.
Contact John D. Boyd at email@example.com.