WASHINGTON, D.C. — Few voters heading to the polls today will make their decision based on freight transportation and trade policy issues, but that won’t stop the election results from affecting shippers and transport providers in the years to come.
As much as transportation advocates bemoan the lack of infrastructure debate in the presidential election, how President Obama and Republican nominee Mitt Romney would likely proceed if elected is hardly a mystery. Obama has trumpeted his infrastructure spending, including about $48 billion within the stimulus package, but has balked at raising the fuel tax. There is little indication that Obama would change his position and secure a new revenue source for infrastructure funding. His proposal to use funding dollars, freed up through the ending of wars in the Middle East, for infrastructure works as a stump speech talking point but is a non-starter on the Hill.
If elected president, Romney, would likely focus spending on traditional infrastructure projects — highway and bridge construction — and trim spending on transit and nontraditional projects, such as sidewalks and other quality-of-life initiatives. Whether Romney would plug the Highway Trust Fund shortfall or only spend on construction what its coffers permit depends largely on how well his more conservative colleagues fare in the House.
With dwindling funding and little appetite in Congress to boost coffers, the choice of the next transportation secretary will be crucial. There is talk that Ray LaHood, a former Republican House member, might return if Obama is re-elected. Chairman of the House Transportation Committee John Mica, R-Fla., and Virginia Gov. Bob McDonnell have been reported as possible Romney picks for the DOT top spot.
In terms of regulation, Obama and Romney are highly unlikely to press for firmer controls on the freight railroad industry. The Obama administration has promoted the positive impact freight railroads have had in the economic recovery, and the Surface Transportation Board, the railroad regulation agency, has sought mediation between carriers and shippers, instead of bold rule changing. There is more hope within the trucking industry that a Romney presidency would roll back or blunt major regulatory initiatives, including a mandate for electronic on-board recording devices and new truck driver hours-of-service rules.
Despite the nasty accusations over outsourcing jobs and failing to stand up to China, Romney and Obama will both likely advance free trade if elected. Romney will likely take a more aggressive stance, but his promise to label China as a currency manipulator on his first day of office is bluster, carrying little risk of sparking a trade war. Obama, however, has been criticized as being too slow to pursue free trade pacts, as his signing of agreements with Panama, Colombia and South Korea were mostly hashed out during his predecessor’s tenure. But the Obama administration has made headway on the Trans-Pacific Partnership Agreement and has increased complaints to the World Trade Organization over China, a move Obama critics say smacks more of election posturing than true defense of U.S. companies.
As much as the president can steer infrastructure policy, the real work on key freight transport legislation — the next surface transportation bill and the Water Resources Development Act — will get done in Congress. Republicans are expected to keep their majority in the House, but their hold might ebb slightly. The real telling point for the future of infrastructure spending is how many Tea Party-affiliated House members return to sessions, because they have been the staunchest foes of expanding transport spending. The makeup of the Senate will likely matter less, considering the chambers has taken a more bipartisan approach to freight-related legislation.
In the shorter term, Congress will have little time before the end of the year to blunt or completely avoid the impact of the fiscal cliff. Some transportation analysts hope a grand bargain could result in the raising of the fuel tax. History is on their side. Former President Clinton’s 1993 plan to reduce the federal deficit included a 4.3 cents fuel tax hike, the most recent raise, and former President Regan doubled the gas tax by hiking it 5 cents in 1983 as part of a broader effort to stimulate the economy.
Lastly, a handful of ballot initiatives could have a major impact on regional trade and transportation spending. Local and state government have become more aggressive in pushing transportation projects as federal assistance has waned. Maine voters, for example, will vote today on whether to authorize a general fund bond issue of $51.5 million for projects ranging from highways to port facilities. If the initiative passes, the state will be eligible for at least $105.6 million in federal and other matching funds, according to supporters.
Michigan voters won’t have to shell out money for a new $2.1 billion bridge connecting Detroit and Windsor, Ontario, because Canada is on the hook for the costs. But they will have to reject a ballot issue that would require Michigan residents to vote on whether to construct the International Trade Crossing, which is aimed at improving connectivity at the largest U.S.-Canada trade corridor. Manual “Matty” Moroun, owner of the competing Ambassador Bridge, has spent millions of dollars to support the ballot initiative.
Check out The Journal of Commerce in the coming days on how the U.S. November elections will impact freight infrastructure and trade in the coming years.