February 15, 2016 3:00 AM, EST

Obama Budget Would Boost Transport

Pete Marovich/Bloomberg News
This story appears in the Feb. 15 print edition of Transport Topics.

New infrastructure projects would be funded through a significant new tax on oil companies, according to President Obama’s fiscal 2017 budget request.

Unveiled on Feb. 9, the administration’s overall $4 trillion request allots $98.1 billion in budget authority for Department of Transportation programs in fiscal 2017.

That would include $640 million for motor carrier safety and consumer enforcement efforts through the Federal Motor Carrier Safety Administration. It also calls for $3.9 billion over 10 years for large-scale deployment pilots to develop a common network for connected and autonomous vehicles.

The provision for DOT also includes $1.25 billion a year for the Transportation Investment Generating Economic Recovery grant program, roughly $730 million for the National Highway Traffic Safety Administration to research and develop new life-saving technologies, $295 million for the Pipeline and Hazardous Materials Safety Administration and $3 million to promote public-private partnership efforts.

“The budget addresses the department’s top priority, safety, with high-impact investments in the safe integration of emerging technologies, such as autonomous vehicles and unmanned aircraft systems, which have the potential to transform transportation systems, save lives and reduce carbon emissions,” Transportation Secretary Anthony Foxx said.

The record $4.1 trillion budget is for the 2017 fiscal year that starts Oct. 1.

Under the plan, oil companies would pay a $10.25-per-barrel fee on oil as a way to fund transportation projects capable of withstanding severe weather events.

In a fact sheet about the budget, the administration explained the infrastructure programs would aim to reduce time stuck in traffic for truckers and motorists by easing congestion. It is also meant to cut back on the country’s reliance on oil as well as invest in clean energy technologies.

President Obama said the plan would “help to put hundreds of thousands of Americans to work modernizing our infrastructure to ease congestion and make it easier for businesses to bring goods to market through new technologies such as autonomous vehicles and high-speed rail, funded through a fee paid by oil companies.”

The administration also has proposed using one-time revenue from a corporate tax overhaul, which it said would raise nearly $200 billion for transportation programs.

“Meeting future challenges will require a long-term vision for the transportation sector that includes more and cleaner options, and expands those options to communities across the country,” Foxx said. “This budget brings us closer to that vision.”

The plan was released on the same day as the New Hampshire presidential primary, with much of the focus on the political fight over Obama’s successor. It underscores the initiatives pushed by candidates Hillary Clinton and Sen. Bernie Sanders (D-Vt.). Meanwhile, Republicans dismissed the proposal as a tax-and-spend exercise.

Republican leaders who control the House and Senate expressed no interest in adopting the administration’s investment proposals for infrastructure projects.

House Speaker Paul Ryan (R-Wis.) said the proposal was “dead on arrival” in his chamber.

In the Senate, Oklahoma Republican James Inhofe, chairman of the highway panel, blasted the administration’s plan.

“The president’s last budget is nothing new,” Inhofe said. “Congress will instead move forward on crafting a serious budget that represents the interests of the American people.”

Democrats, for the most part, praised the president’s plan.

“It is a bold, forward-looking plan for a new American future fueled by innovation,” House Democratic leader Nancy Pelosi said. Other stakeholders were of mixed opinions.

American Association of Port Authorities CEO Kurt Nagle said the president’s plan did not do enough to fund freight infrastructure projects.

“International trade now accounts for fully 30% of the U.S. economy,” Nagle said. “To compete in global markets, America needs an efficient and modern 21st-century freight transportation system.”

Jack Basso, an analyst with global business consulting firm Parsons Brinckerhoff, said it will be unlikely the president’s new oil fee will advance.

“I don’t see the Republicans in Congress enacting any of that, and if you don’t have that, then I don’t know where the revenue comes from to do what they want to do,” Basso said. He added that the overseas profits proposal also has little chance of being adopted.

“I think the chances of that, particularly as we lead up to the elections, are not good at all, but nonetheless, give them an ‘A’ for effort for trying,” Basso said.