President Barack Obama on Tuesday released a $3.9 trillion budget for fiscal year 2015, with a 2.6-percent budget increase for U.S. Customs and Border Protection, a $10 billion freight program within a $302 billion plan for surface transportation programs over four years, and a reduction in funding to dredge harbors — and little chance that it will become law as a whole. Instead, the administration will try to get certain pet priorities funded at the desired level.
The White House has recently signaled that the document is a wish list the president would pursue in an ideal world since the framework for much of next year’s spending was set in the two-year compromise budget deal in December to avoid a government shutdown. Congress will determine the actual amount of the budget and how much to spend for each government account and interest groups are expected to fight against many of the Obama recommendations.
Obama’s $91 billion Transportation Department budget includes details on the $302 billion, four-year surface transportation re-authorization plan he outlined last week. Among the highlights are a new $10 billion multimodal grant program with dedicated funding sources for railroad, port and highway infrastructure projects that support freight movement; $5 billion over four years to expand the TIGER competitive grant program for multimodal projects; and $4 billion for a Fixing and Accelerating Surface Transportation (FAST) program that provides incentives to states that reform their processes to deliver projects more quickly and save money. The request would provide $87 billion to fix the projected shortfall in the Highway Trust Fund using part of the $150 billion captured through Obama’s suggestions for reforming the tax code. The rest of the $150 billion would be used to speed up investment in projects.
The freight fund and the TIGER grant program would be sustained, long-term, by the creation of a $1.25 billion trust fund for multimodal infrastructure. Many transportation advocates welcome the influx of new funding to shore up the Highway Trust Fund, but acknowledge that the Obama plan, as well as one from Rep. David Camp, R-Mich., doesn’t provide a sustainable source of long-term revenue to supplement collection of fuel taxes.
The fiscal-year 2015 budget request for the Federal Highway Administration, which invests in highway and bridge infrastructure, is $49 billion, $7.6 billion more than enacted for the current year.
The White House also envisions $8 million to create an Interagency Infrastructure Permitting Improvement Center to expedite the review of major infrastructure projects, and develop and deploy information technology tools to track project schedules and metrics.
The American Trucking Associations took issue with the administration’s budget, particularly support for the railroad industry, with which it has a tense relationship given the increased efforts by railroads to compete for cargo normally hauled on highways.
“Today’s proposed budget misses the mark when it comes to the transportation needs of the U.S. economy,” ATA President Bill Graves said. “It provides no real funding solutions for the long-term health of our infrastructure and proposes massive new subsidies for a mode that moves a small proportion of America’s freight and passengers.”
U.S. government statistics show that trucks move more than 68 percent of the nation’s freight by tonnage, compared to 15 percent by rail. But rail accounts for 40 percent of freight-ton miles because it generally is used for long-distance transport.
“While freight railroads and intermodal rail play small, but important roles in goods movement, the lifeblood of our economy is and will continue to be the U.S. trucking industry,” Graves said. “By mid-January, this industry moved as much freight as the railroads will move all year, and this budget proposes to redirect funds from road and bridge projects that would improve capacity and ease bottlenecks to underwrite projects for an industry that continually crows about how self-sufficient it is.”
The trucking industry’s traditional position is that motor carriers contribute to the Highway Trust Fund through fuel and excise taxes, and that railroads shouldn’t get a subsidy since they don’t pay user fees dedicated to highways and transit.
“It is also difficult to understand this administration’s insistence on continuing to pour billions of dollars into an intercity passenger rail system that carries just one-tenth of 1 percent of passenger miles, while failing to provide the necessary resources to improve the safety and efficiency of the highway system, which handles 87 percent of passenger travel,” Graves added.
The American Association of Port Authorities applauded the administration’s focus on freight transportation investments, but was downbeat about the proposed budget reductions for navigation infrastructure.
According to the association’s analysis, the $4.56 billion budgeted for the Army Corps of Engineers Civil Works funding represents a 5.8 percent decrease from the president’s fiscal year 2014 budget of $4.83 billion. The Corps’ Navigation Program declined to a lesser extent than the
overall Corps funding and now is 40 percent of the Corps Civil Works program,
the highest percent it has been in the last six years.
”The Corps of Engineers’ budget proposal falls well short of
the waterside maintenance and modernization needs of this country. We were
disappointed to see that the budget request for Corps port-related programs
decreased from the fiscal year 2014 enacted budget in both the operations and
maintenance and the construction accounts, despite the president’s call to
upgrade U.S. ports and the goal of doubling exports,” AAPA President Kurt Nagle said in a statement. “Our nation is at a
critical point in maintaining our international competitiveness, and the fiscal year 2015 budget request would result in trade-related infrastructure losing further
ground at a time when we are already behind many of our competitors.”
The Corps budget proposal would be nearly a 9-percent decrease in the
operations and maintenance budget, which currently stands at $1 billion, according to the AAPA’s analysis. The proposal is a 2.8-percent increase from last year’s budget — from $890 million in fiscal year 2014 to $915 million in the fiscal year 2015 request. It only takes advantage of 51 percent of the yearly Harbor Maintenance Tax (HMT) collections, which
fund channel maintenance, maritime interests complain. HMT revenues grew 8.2
percent from $1.65 billion in fiscal year 2012 to an estimated $1.8 billion last year. The remainder will add to the Harbor Maintenance Trust Fund
balance, which currently stands at $8.1 billion.
Water resources legislation currently in the last stages of negotiation on Capitol Hill would authorize Congress to use more of the HMT trust fund for dredging.
The AAPA also criticized the White House for slashing the budget for channel improvements by 10 percent, on top of a 28-percent decrease in fiscal year 2014 funding.
The trade association also expressed unhappiness with the elimination of the Diesel Emissions Reduction Act
(DERA) program, which helps ports and municipalities reduce emissions from
older diesel engines, to fund
other priorities of the Environmental Protection Agency.
“The enthusiasm generated from the president’s and vice president’s port
tours and discussions in 2013 and inclusion of the need to upgrade our ports in
the January State of the Union address has been dampened by the budget request,” the AAPA statement said.
The Department of Homeland Security’s net discretionary funding under Obama would be $38.2 billion, $1 billion less than the previous year because of the automatic budget cuts from the sequestration process and the compromise Budget Act at the end of the year. Overall, the department’s budget authority is $60 billion because of mandatory fees and money collected in trust funds. Customs and Border Protection is the largest agency within DHS and fares best, capturing 21 percent of the proposed budget (down from 22 percent in fiscal-year 2014). CBP is allocated $12.8 billion compared to more than $12.4 billion appropriated by Congress for the current fiscal year and $12.9 billion in last year’s budget request.
The budget includes funding to complete a campaign started last year to hire 2,000 CBP officers and an additional 2,000 officers, funded by fees to more quickly process and inspect passengers and cargo at international checkpoints, as well as enforce trade and safety laws. CBP is requesting an increase of $11.7 million to replace or refurbish six large-scale and 10 small-scale, non-intrusive inspection systems for cargo and baggage, as well as tool trucks. And it would provide $175 million for the ACE import/export processing system modernization, a $4 million boost from the 2014 appropriation.
CBP would also cut about $6 million in recurring funding for import safety, which would keep the agency from hiring an additional 52 personnel to support the 2010 import safety mandate and reduce support to the Commercial Targeting and Analysis Center.
The Coast Guard would experience a 4.1-percent reduction in its budget to $9.8 billion, and the Transportation Security Administration’s budget would decrease by 0.8 percent to $7.3 billion from the 2014 enacted levels.
The TSA’s budget includes $107 million to ensure compliance with the 100-percent cargo screening requirement on passenger aircraft.
The administration also proposed to consolidate all state and local preparedness grants, including the Port Security Grant Program, as part of a $1 billion National Preparedness Grant Program under the Federal Emergency Management Agency. And it would move management of the consolidated grant program to the states. The same proposal has been made in prior budgets, but Congress has agreed to the change. The American Association of Port Authorities said port security should remain a separate program managed at the federal level because seaports are international borders for trade.
Washington Notebook: Obama budget offers pluses, minuses for goods movement
