Budget deficit. Says who?
The following information is taken directly from the DOT text in president Obama’s 216 page proposed 2012 budget. While I will not provide the entire text, it is important to keep in mind that this budget, if approved as drafted, has a trillion dollar deficit from day one.
I’ll admit that this post has an Agenda. What I intend to highlight is my opposition for creating HSR debt when the entire transportation infrastructure is on the table. As stated below, long overdue repairs and upgrades on the crumbling national infrastructure would create jobs. Data confirms that the vast majority of Americans and businesses rely on our current transportation systems.
To repeat. There is no way that I could support a budget with a trillion dollar deficit no less requesting billions for future high speed rail lines that among other flaws will require a subsidy.
What follows is DOT text, not my own.
Text source. Pages 121-124 2012 FEDERAL BUDGET DEPARTMENT OF TRANSPORTATION
“A well-functioning transportation system is critical to the Nation’s prosperity. Whether it is by road, transit, aviation, rail, or waterway, we rely on our transportation system to move people and goods safely, facilitate commerce, attract and retain businesses, and support jobs. The President’s Budget provides $128 billion to support these efforts, including $13 billion in discretionary budget authority, $109 billion in obligation limitations and $6 billion in mandatory budget authority. Increases are made to enable the Department to deliver on its core safety mission and support economic growth. The Budget also features reforms to surface transportation programs, including a consolidation of 55 duplicative, often-earmarked highway programs into five streamlined ones.”
Invests in Infrastructure Critical for Long Term Growth and Job Creation
Finally, the President will work with the Congress to ensure that this funding boost is offset and does not increase the deficit.
Much of the Nation’s transportation infrastructure was built decades ago and is in desperate need of repairs and upgrades
to meet economic demands. The President’s Budget includes a $556 billion, six-year surface transportation reauthorization proposal—including highways, transit, highway safety, passenger rail, and a National Infrastructure Bank—an increase of over 60 percent above the inflation-adjusted levels in the previous surface transportation reauthorization, plus annual appropriated funding for passenger rail funding in those years. This proposal seeks to not only fill a long-overdue funding gap, but also to reform how Federal dollars are spent to ensure that they are directed to the most effective programs. It reflects a need to balance fiscal discipline with efforts to expedite our economic recovery and job creation. It emphasizes fixing
existing assets, moving toward a cost-benefit analysis of large transportation projects, and consolidating duplicative, often-earmarked highway programs. Further, the Administration’s proposal does not contain earmarks, and the Budget seeks to cancel long-dormant ones.
Boosts Spending by $50 Billion in the First Year. To spur job growth and allow States to initiate
sound multi-year investments, the Administration’s six-year plan includes a $50 billion boost above current law spending for roads, railways and runways. Although infrastructure projects take time to get underway, the $50 billion boost alone would generate hundreds of thousands of jobs in the first few years—and in industries suffering from protracted unemployment. Not only will job markets and municipal transportation
programs get much-needed support in the nearterm, but Federal taxpayers will reap the benefits of historically competitive pricing in construction.
sound multi-year investments, the Administration’s six-year plan includes a $50 billion boost above current law spending for roads, railways and runways. Although infrastructure projects take time to get underway, the $50 billion boost alone would generate hundreds of thousands of jobs in the first few years—and in industries suffering from protracted unemployment. Not only will job markets and municipal transportation
programs get much-needed support in the nearterm, but Federal taxpayers will reap the benefits of historically competitive pricing in construction.
Supports High-Speed Rail Service as Real Transportation Alternative. For the first time ever, the Administration proposes to include intercity passenger rail programs in the multi-year reauthorization proposal. The goal is to provide 80 percent of Americans with convenient access to a passenger rail system, featuring high-speed service, within 25 years. The Budget provides $53 billion over six years to fund the
development of high-speed rail and other passenger rail programs as part of an integrated national strategy. This includes merging Amtrak’s stand-alone subsidies into the high-speed rail program as part of a larger, competitive System Preservation initiative.
development of high-speed rail and other passenger rail programs as part of an integrated national strategy. This includes merging Amtrak’s stand-alone subsidies into the high-speed rail program as part of a larger, competitive System Preservation initiative.
Helps Communities to Become More Livable and Sustainable. Fostering livable communities—places where coordinated transportation, housing, and commercial development gives people access to affordable and environmentally sustainable transportation—is a transformational policy shift. The Administration’s
reauthorization proposal adopts a multi-pronged approach to help communities achieve this goal.
For example, in the Federal Highway Administration, the Administration proposes a new livability
grant program ($4.1 billion in 2012 and $28 billion over six years) for projects like multi-modal
transportation hubs (where different forms of transportation converge) and streets that accommodate
pedestrian, bicycle, and transit access. The proposal also seeks to harmonize State and local planning requirements and facilitate more cooperation—and includes competitive grant funding ($200 million in 2012 and $1.2 billion over six years) to improve those entities’ ability to deliver sound, data-driven, and collaboratively-developed transportation plans. The Budget also includes $119 billion for transit programs
over six-years, more than doubling the commitment to transit in the prior reauthorization for both existing capacity and capacity expansion. This unprecedented increase for buses, subways, and other systems of public transportation will help improve and expand travel options and help make our communities more livable.
reauthorization proposal adopts a multi-pronged approach to help communities achieve this goal.
For example, in the Federal Highway Administration, the Administration proposes a new livability
grant program ($4.1 billion in 2012 and $28 billion over six years) for projects like multi-modal
transportation hubs (where different forms of transportation converge) and streets that accommodate
pedestrian, bicycle, and transit access. The proposal also seeks to harmonize State and local planning requirements and facilitate more cooperation—and includes competitive grant funding ($200 million in 2012 and $1.2 billion over six years) to improve those entities’ ability to deliver sound, data-driven, and collaboratively-developed transportation plans. The Budget also includes $119 billion for transit programs
over six-years, more than doubling the commitment to transit in the prior reauthorization for both existing capacity and capacity expansion. This unprecedented increase for buses, subways, and other systems of public transportation will help improve and expand travel options and help make our communities more livable.
Adopts a “Fix-It-First” Approach for Highway and Transit Grants. Key elements of the Nation’s surface transportation infrastructure—our highways, bridges, and transit assets—are not up to standards. At the same time, States and localities have incentives to emphasize new investments over improving the condition of the existing infrastructure. The Administration’s reauthorization proposal will underscore the importance
of preserving and improving existing assets, encouraging its government and industry partners to make optimal use of current capacity, and minimizing life-cycle costs through sound asset management principles. Accountability is a key element of this system: States and localities will be required to report on highway condition and performance measures.
of preserving and improving existing assets, encouraging its government and industry partners to make optimal use of current capacity, and minimizing life-cycle costs through sound asset management principles. Accountability is a key element of this system: States and localities will be required to report on highway condition and performance measures.
Ensures that Any Surface Transportation Plan is Paid For. The current framework for financing and allocating surface transportation investments is not financially sustainable, nor does it adequately or effectively allocate resources to meet our critical national needs. The President is committed to working with the Congress to ensure that funding increases for surface transportation do not increase the deficit. In order to encourage all parties to work together to enact such a solution, consistent with the recommendation of the National Commission on Fiscal Responsibility and Reform, the Budget proposes to make all programs included in surface transportation reauthorization subject to PAYGO (i.e., outlays classified as mandatory). This is intended to close loopholes in budgetary treatment and support the important goal of generating broad consensus for a fiscally responsible plan.”
What a load of bullshit. I think we need to flush out Campbell and Royce on this. No really. Flush.
What is your knuckle-dragger take on the wikileaks revelation’s on Saudi Arabia and peak oil;
Excerpts from Guardian articles and the wikileaks cable;
“The cables…urge Washington to take seriously a warning from a senior Saudi government oil executive that the kingdom’s crude oil reserves may have been overstated by as much as 300bn barrels – nearly 40 percent” reports the Guardian.
Wikileaks;
“Considering the rapidly growing global demand for energy – led by China, India and internal growth in oil-exporting countries – and in light of the above mentioned constraints on expanding current capacity, al-Husseini believes that the recent oil price increases are not market distortions but instead reflect the underlying reality that demand has met supply (global energy supply having remained relatively stagnant over the past years at approximately 85 million barrels/day). He estimates that the current floor price of oil, removing all geopolitical instability and financial speculation, is approximately 70 – 75 USD/barrel. Due to the longer-term constraints on expanding global output, al-Husseini judges that demand will continue to outpace supply and that for every million b/d shortfall that exists between demand and supply, the floor price of oil will increase 12 USD. Al-Husseini added that new oil discoveries are insufficient relative to the decline of the super-fields, such as Ghawar, that have long been the lynchpin of the global market…..
He stated that the IEA’s expectation that Saudi Arabia and the Middle East will lead the market in reaching global output levels of over 100 million barrels/day is unrealistic, and it is incumbent upon political leaders to begin understanding and preparing for this “inconvenient truth.”
Jeremy Leggett
guardian.co.uk,:
The peak oil debate – whether one uses the “P” word or not – involves huge stakes. If US diplomats based in Saudi Arabia harbour fears that the Saudis can’t produce enough oil to head off ruinous oil prices, then they are merely telling the US government what a spectrum of UK industry is already telling the UK government. We are asleep at the wheel here: choosing to ignore a threat to the global economy that is quite as bad as the credit crunch, and quite possibly worse.
The Guardian;
“Sir Richard Branson and fellow leading businessmen will warn ministers this week that the world is running out of oil and faces an oil crunch within five years.
The founder of the Virgin group, whose rail, airline and travel companies are sensitive to energy prices, will say that the coming crisis could be even more serious than the credit crunch.
“The next five years will see us face another crunch – the oil crunch. This time, we do have the chance to prepare. The challenge is to use that time well,” Branson will say.
“Our message to government and businesses is clear: act,” he says in a foreword to a new report on the crisis. “Don’t let the oil crunch catch us out in the way that the credit crunch did.”
Other British executives who will support the warning include Ian Marchant, chief executive of Scottish and Southern Energy group, and Brian Souter, chief executive of transport operator Stagecoach.
Their call for urgent government action comes amid a wider debate on the issue and follows allegations by insiders at the International Energy Agency that the organisation had deliberately underplayed the threat of so-called “peak oil” to avoid panic on the stock markets.”