Senator John Kerry

Transportation Nation

Mica's Love-Hate Relationship with Infrastructure Finance

Wednesday, September 14, 2011


It was only minutes after President Barack Obama delivered his jobs speech to a joint session of Congress last Thursday night that House Transportation and Infrastructure Chair John Mica (R-Fla) was dismissing outright one of the President’s main proposals. “I’m strongly opposed to any type of a new federal infrastructure bank,” Mica told Todd Zwillich after the speech. “We’ve already had experience with some of these federal grant programs that requires Washington bureaucrats, Washington red tape, Washington approvals and then bowing and scraping to Washington.”

There are many kinds of potential infrastructure banks, of course, and indeed some lawmakers—including Mica’s Democratic predecessor, James Oberstar—imagined a bank as the grant-making group of technocrats Mica abhors. Others, however, have suggested that a federal infrastructure bank should act... well, something like a bank: It should loan money independently of politics with revenue generation in mind.

In his speech last Thursday, Obama telegraphed a few clues that he was imagining the latter type (my italics for emphasis): “No more earmarks. No more boondoggles. No more bridges to nowhere. We’re cutting the red tape that prevents some of these projects from getting started as quickly as possible. And we’ll set up an independent fund to attract private dollars and issue loans based on two criteria: how badly a construction project is needed and how much good it will do for the economy.”

The President went on to say that, “This idea came from a bill written by a Texas Republican and a Massachusetts Democrat,” a reference to the Building and Upgrading Infrastructure for Long-Term Development, or BUILD Act, sponsored by Senators John Kerry and Kay Bailey Hutchison. Since revealed, the infrastructure bank provision of the American Jobs Act is almost a cut-and-paste from the BUILD Act. Both would create an “American Infrastructure Financing Authority” that would “provide direct loans and loan guarantees to facilitate infrastructure projects that are both economically viable and of regional or national significance” and are backed by “tolls, user fees, or other dedicated revenue sources.”

Again, Chairman Mica opposes this. What does he support? The expansion of a program called TIFIA, which stands for the Transportation Infrastructure Finance and Innovation Act. And what does TIFIA provide? Direct loans, loan guarantees and standby lines of credit "for qualified projects of regional and national significance" "with tolls and other forms of user-backed revenue."

By now you've noticed that the Kerry-Hutchison infrastructure bank (which Mica opposes) bears a striking resemblance to the already-popular TIFIA program (which Mica supports). But there are some differences:

  • The program that Mica supports helps the public and private sectors build transportation infrastructure, while the program Mica strongly opposes would help these same sectors build transportation, water, or energy infrastructure.
  • The mechanism that Mica supports can loan up to 33 percent of an eligible project’s total costs, while the mechanism Mica opposes can loan up to 50 percent.
  • Mica’s reauthorization proposal (pdf) from July set aside $6 billion to the program that Mica supports, while Obama and Kerry and Hutchison want to set aside $10 billion for the program that Mica opposes.
  • The program that Mica opposes because it would be run by “Washington bureaucrats” would in fact be run by a revolving group of seven people appointed by the president and confirmed by the Senate, no more than four of whom could be from the same political party; the program that Mica  supports is run entirely by executive branch bureaucrats working under the Secretary of Transportation.

Which of these key differences between the infrastructure bank and TIFIA causes Chairman Mica to hate one and love the other? Mica spokesperson Justin Harclerode acknowledged this was a good question, but could only re-emphasize the contrast in positions without explaining it. “You’re right that Chairman Mica supports TIFIA. We know that TIFIA works, and he plans to capitalize TIFIA more than in the past,” he emailed. “There have been various [infrastructure bank] proposals, but we just don’t believe that creating another government-sponsored enterprise like Fannie or Freddie is the way to go.”

Meanwhile, are there other TIFIA lovers out there who are infrastructure bank haters? Are we missing something? I’m looking for wonky insight. Don't tell me this is just partisan posturing!

Matt Dellinger is the author of the book Interstate 69: The Unfinished History of the Last Great American Highway. You can follow him on Twitter.


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Transportation Nation

Boston Launches Bike Share

Thursday, July 28, 2011

Boston Mayor Thomas Menino today launched Boston's 600-bike,  61-station bike share, called the "New Balance Hubway."   Boston's system will cost $85 a year to join, or $5 a day.  Members can check out bikes from one station and drop them off at another at no charge if they use them for 30 minutes or less, with charges rising the longer bikes are used.  Nicole Freedman, who set up Boston's bike share, says the system already has 500 members, which she says is ahead of projections.

Hubway's 3-year cost is projected to be $5.7 million, with $3 million of that coming from the FTA.

From Menino's press office:

New Balance Hubway bike share system that will feature 61 stations and over 600 bikes around the city. The system is operated by Alta Bicycle Share of Portland, OR and includes locations in Kenmore Square, Roxbury, the South End, the Longwood Medical area, Allston, Brighton, the Back Bay and more. New Balance Hubway is a program under Mayor Menino’s nationally recognized Boston Bikes program that he launched to make Boston one of the world’s premiere cycling cities.

“This is a great day for Boston,” Mayor Menino said. “New Balance Hubway promotes a new, environmentally friendly way of getting around and I hope that all residents use the system. Over the past four years, we have taken great strides toward making Boston a city that welcomes and encourages bicycling but this innovative system is the most significant step yet. We have had the goal of going from worst to first, and with Hubway we’re nearly there. I want to thank Senators John Kerry and Scott Brown and Congressmen Michael Capuano and Stephen Lynch for their dedicated hard work in helping to secure crucial grant funding to make such an important project possible.”

“If anyone can transform Boston into a premier bike friendly city it’s Mayor Menino,” Senator John Kerry said. “Bike sharing is an environmentally friendly way to reduce traffic congestion.”

With over 40 stations currently operational and the rest to be installed shortly, the system is fully operated by Alta Bicycle Share, although the equipment is a state-of-the-art, third generation, solar powered automated system developed by Public Bike System Company. New Balance Hubway features “swipe card” payments and costs $5 per day with free trips that are 30 minutes or less, and $85 annual memberships. Since the New Balance Hubway website went live on July 13, over 700 annual memberships have been activated. Similar systems are located in Washington D.C., Montreal, London and Melbourne. The technology allows users to rent bikes from one station and return them at another across the city. Typically, there will be about 10 bikes available at each station."

Full release here.

Send us your reviews of the system, or how it affects you!

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Transportation Nation

White House Not Giving Up on Infrastructure Bank

Wednesday, July 13, 2011

White House Photo

The White House is stepping up talk of  enacting an infrastructure bank, and may even be considering making such a bank part of any deal it makes with Congress on the debt ceiling.

An infrastructure bank, using federal seed money and private capital, would invest in large infrastructure projects that could pay back over the years through tolls or other revenues--like sales taxes that back local transit projects.

Washington sources say an infrastructure bank could be part of a deficit deal or emerge as a free-standing piece of legislation.

In the last week, the President and administration officials keep slipping the concept into the public debate.  The most recent incarnation was Monday's White House press conference, when the President dropped the words "infrastructure bank"  at the end of a thought on economic growth.

"I mean, the infrastructure bank that we've proposed is relatively small. But could we imagine a project where we're rebuilding roads and bridges and ports and schools and broadband lines and smart grids, and taking all those construction workers and putting them to work right now?  I can imagine a very aggressive program like that that. I think the American people would rally around (it) and (it) would be good for the economy not just next year or the year after, but for the next 20 or 30 years."

The fact that the President even said the words "infrastructure bank" probably slipped by most folks, who were focusing on the President's vow not to have a short-term deal on debt. But it's a concept he's bringing to the forefront as other avenues for infrastructure spending are noticeably fading.

Stimulus spending, clearly, is out. And as we reported last week, Rep. John Mica, (R-FL), chair of the House Transportation and Infrastructure Committee, last week introduced  a six-year, $230 billion surface transportation bill. The bill was a long way from the president's proposed $556 billion proposal, which Obama sent into the world on Valentine's Day. Even so, the Senate isn't expected to ask for much more than the House, and instead may be looking at a $109 billion, two-year bill.

Which may be why the White House is bring the infrastructure bank concept to the fore. Just a few days before the President mentioned it, Austan Goolsbee, chair of the Council of Economic Advisers, pushed the concept in a television interview, as part of a number of other ideas to get the economy moving. "We ought to extend the payroll tax cut. We ought to create the infrastructure bank. We ought to pass the free trade agreements to get exports going..."

The president also talked about infrastructure in his weekly address:

"With a recovery that’s still fragile and isn’t producing all the jobs we need, the last thing we can afford is the usual partisan game-playing in Washington," President Obama said. "By getting our fiscal house in order, Congress will be in a stronger position to focus on some of the job-creating measures I’ve already proposed – like putting people to work rebuilding America’s infrastructure..."

The president has been nothing if not consistent on infrastructure. On Labor Day, he put forward a $50 billion infrastructure plan. On Columbus Day, he refined that plan after a White House meeting with mayors and governors.  In his State of the Union address, he pushed making high speed rail accessible to 80 percent of Americans by 2036.  On Valentines Day, his budget proposal included a $556 billion surface transportation bill.

But the administration has been noticeably lacking when it comes to ideas for financing infrastructure.  Called repeatedly before Congress, U.S. Transportation Secretary Ray LaHood would only say that he "looks forward" to working with them to sort out financing details.

The infrastructure bank, by contrast, is a much easier sell. Senator John Kerry (D-MA), who introduced a bill in the Senate earlier this year, said it would only need $10 billion of federal seed money to start. Kerry's bill has the support of Senator Kay Bailey Hutchinson (R-TX), and Mica has said he supports an infrastructure bank.

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Transportation Nation

Senators To Florida: You Gonna Eat Those HSR Funds?

Monday, February 28, 2011

(Washington D.C. - David Schultz, WAMU) Have you ever been out to a restaurant with a group of people and one person didn't quite finish their entree? Whenever this happens, I'm usually the first to broach that eternal question, "You gonna eat that?"

I realize in some circles this is interpreted as uncouth behavior. I ask the question not to offend, but simply as a means to distribute a meal more efficiently. In other words, if you're not going to eat it, I will.

And I'm not the only one who holds these controversial views. Ten Democratic Senators from the northeast sent a letter to Transportation Secretary Ray LaHood on Friday asking that $2.4 million in high speed rail funds semi-rejected by Florida Governor Rick Scott (R) be redirected to their states. In other words, if Florida won't eat it, they will.

Full text of the letter after the jump...

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Transportation Nation

Kerry Spokeswoman: No decision on Transportation Carbon Caps Yet

Tuesday, June 29, 2010

(Andrea Bernstein, Transportation Nation) Senator John Kerry's spokeswoman, Whitney Smith, emails the following in response to our query about including transportation emissions caps in the new senate energy and climate bill:

"Majority Leader Reid will bring a final comprehensive energy and climate package to the floor this July, but the final details of what will be included in that package have not been determined.

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Transportation Nation

Politico: Dems Agree to Scaled-Back Energy and Climate Bill

Tuesday, June 29, 2010

Politico is reporting that Democrats have agreed "to scale back their ambitious plans to cap greenhouse gases across multiple sectors of the economy," but says President Obama is holding firm on setting a "price for greenhouse gases."   In a Q&A with reporters,  Senator John Kerry (D-Mass)  didn't specify whether  setting caps in the transportation sector would remain part of the bill.   More soon.    (And don't forget to read Todd Zwillich's full post on the behind-the-scenes maneuvering.)

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