The House of Representatives Subcommittee on Highway and Transit is planning to start the transportation reauthorization process on June 24, 2009 at 11:00 a.m. EST by marking up the Surface Transportation Act of 2009 (“Act”). House Transportation and Infrastructure Chairman, James Oberstar, has made a proposal which would fundamentally overhaul surface transportation programs drawing on many of the recommendations by a federally mandated Surface Transportation Policy and Revenue Commission as well as on White House policy priorities. The Obama Administration, however, has a completely different political and legislative strategy in mind, causing a public disconnect between leaders of the legislative and executive branches.

First, on a negative note, the Act would consolidate or eliminate 75 existing Federal highway and transit programs including the “Indian Reservation Road Bridges Program,” and “The Public Transportation Participation Pilot Program.

On the positive side, the Act would create a new rail section to promote President Obama’s proposal of a high speed passenger rail network. Also, at the urging of the Administration, Oberstar would create an Office of Livability in the Transportation Department, to link transportation planning to housing and business development. The Act would also overhaul the Transportation Department’s inner workings by creating a position of Undersecretary of Intermodalism. That Undersecretary would help coordinate planning by agencies responsible for different methods of transportation, including the aviation, railroad, transit, highway and maritime administrations, along with Amtrak, the Coast Guard and the Army Corps of Engineers. “It’s an opportunity to restructure all of transportation,” Oberstar said at a briefing Wednesday. “Those modal administrators have not done so much as what we’re doing here – sat around a table, had coffee together – in 40 years. It’s time to do that.”

On the positive side, the Act would create a new rail section to promote President Obama’s proposal of a high speed passenger rail network. Also, at the urging of the Administration, Oberstar would create an Office of Livability in the Transportation Department, to link transportation planning to housing and business development. The Act would also overhaul the Transportation Department’s inner workings by creating a position of Undersecretary of Intermodalism. That Undersecretary would help coordinate planning by agencies responsible for different methods of transportation, including the aviation, railroad, transit, highway and maritime administrations, along with Amtrak, the Coast Guard and the Army Corps of Engineers. “It’s an opportunity to restructure all of transportation,” Oberstar said at a briefing Wednesday. “Those modal administrators have not done so much as what we’re doing here – sat around a table, had coffee together – in 40 years. It’s time to do that.”

The Act would require major metropolitan areas to produce six year plans to increase mobility and reduce congestion, and require states to create benchmarks linked to funding and to produce annual reports on progress. It would overhaul the Federal program for new transit projects, replacing a complex cost effectiveness index established by the Bush Administration with a simpler review process.

Transit projects also would get a larger Federal funding match under the Act. Currently, a 20% state and local investment in new highway projects is matched by 80% in Federal funding. Transit projects, however, receive only a 50% Federal match. Under Oberstar’s plan, transit projects also would qualify for an 80% Federal match.

One thing conspicuously missing from the Oberstar plan is a funding method. That would be up to the Ways & Means Committee which would write the revenue title of the Bill. The Committee is scheduled to hold a hearing on the matter June 25, 2009. Study commissions have recommended a short term increase in the mode of fuels tax, with an eventual switch to a system that taxes motorists based on the number of miles driven. The Obama Administration has rejected the mileage based tax and ruled out an increase in the gasoline tax during the recession. Transportation Secretary Ray LaHood, on Wednesday, reiterated the opposition to raising the gasoline tax. Congressman Oberstar proposes increasing the gasoline tax, but only after two quarters of positive economic growth, then indexing it to inflation.

Ironically, there appears to be substantial dissension between the Administration and Congress concerning the Act’s fate. At the same time Congressman Oberstar was scheduled to appear before the press to announce the Act and discuss its provisions, he was in the office of Secretary of Transportation Ray LaHood. The Secretary surprised Congressman Oberstar by informing him that the Administration did not want him to proceed with the Act. Instead, it would prefer the quick enactment of an 18 month extension of existing programs with some minor policy changes. This course of action would effectively postpone the reauthorization debate deadline until after the 2010 Congressional elections. While Congressman Oberstar proceeded with his press conference where he called the idea of an extension “unacceptable,” his counterpart in the Senate, Chairperson of the Environment and Public Works Committee, Senator Barbara Boxer, indicated her support for the Administration’s proposal.

Clearly, given the debate over funding methodology and whether the Act should be introduced at all, quick passage appears increasingly unlikely.