Obama’s New Transportation Plan Spurs Controversy - Global Trade Magazine
  February 15th, 2016 | Written by

Obama’s New Transportation Plan Spurs Controversy

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  • Last year’s transportation bill included only a modest increase in infrastructure funding.
  • The 2015 transportation bill failed to raise additional revenues to pay for transportation.
  • Immediate reactions to Obama’s new transportation plan have been dismissive.

The $4 trillion budget President Barack Obama sent to the Congress last week included a new plan for building a 21st century clean transportation system funded by a new fee paid by oil companies.

The plan would increase U.S. investments in clean transportation infrastructure by roughly 50 percent—or $32 billion annually—while reforming the investments the United States already makes to help reduce carbon pollution and cut oil consumption. The spending would be funded through a new $10-per-barrel oil tax phased in over five years.

Obama’s plan has a dual focus on jumpstarting economic investment and reducing carbon pollution by driving innovations in public transit, intercity rail, electric vehicle technology, and clean fuel alternatives.

“Today, our transportation sector accounts for 30 percent of U.S. greenhouse gas emissions,” noted a White House statement on the subject. “This new approach to investment and funding is one that places a priority on reducing greenhouse gases, while working to develop a more integrated, sophisticated, and sustainable transportation sector.”

Late last year, Congress passed a bipartisan long-term transportation bill that broke a decade-long cycle of short term extensions and made important gains on permitting reform, innovative finance, and dedicated freight funding. However, last year’s bill included only a modest increase in infrastructure funding.

In addition, the transportation bill “largely overlooks the nation’s climate concerns,” noted Robert Puentes, a senior fellow with the Brookings Institution, in a blog post, and “fails to raise additional revenues to pay for transportation.”

The president’s plan would expand transit systems, make high-speed rail a viable alternative to flying in major regional corridors, modernize the nation’s freight system with expanded Transportation Investment Generating Economic Recovery (TIGER) program funding.

“Immediate reactions to the plan have been dismissive,” noted Puentes. “Many members of Congress are already pronouncing the measure dead-on-arrival.”

Obama’s new plan goes beyond addressing the transportation bill’s shortcomings, according to Puentes, “to create a more robust market for cleaner vehicles…[T]he plan embraces the country’s advanced research capacity and entrepreneurial dynamism to deploy more electric vehicles.”

The president’s idea to tax oil is controversial since consumers could pay 25 cents more per gallon at the pump to pay for the scheme. But, as Puentes points out, “prices today are as low as they’ve been in a long time. Plus, many of the plan’s investments aim to encourage transportation alternatives, which is kind of the point since cheaper gas encourages more driving.”

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