Infrastructure in the News: December 19, 2012
New York Times: U.N. Presents Grim Prognosis on the World Economy
World economic growth has weakened substantially this year and faces the confluence of a triple threat — the so-called fiscal cliff in the United States, the European debt crisis and a sharp slowdown in China, the United Nations said in a report released on Tuesday. The worst case, the report said, could be a new global recession that mires many countries in a cycle of austerity and unemployment for years.
Bloomberg Businessweek: Growth in U.S. Oil Production Signals Independence
The U.S. expanded its oil production this year by the most since the first commercial well was drilled in 1859, upending a belief that Americans were increasingly hooked on foreign crude.
Daily Finance: U.S. Transportation Infrastructure Threatened by Fiscal Cliff
Ratings and research firm Fitch Ratings reckons that if U.S. policy makers should fail to reach an agreement and the country should plunge over the fiscal cliff, U.S. GDP growth will fall by 2% in 2013 to a nearly flat growth rate of 0.4% and that unemployment would rise to 10% by 2014. If that scenario comes to pass, one sector of the economy that will get pounded is the transportation industry.
The Hill: Treasury announces plans to end GM bailout
The Treasury Department said Wednesday it expects to exit its bailout of General Motors (GM) within the next 12 to 15 months.
MSN Money: Just how bad are America's bridges and roads?
The economy is starting to improve, but crumbling bridges and roads across the country are getting in the way of a full recovery.
FastLane: Guest blogger Maritime Administrator David Matsuda: MARAD vessels complete Sandy relief mission
The Department’s Maritime Administration (MARAD) ships T/S KENNEDY, T/S EMPIRE STATE and SS WRIGHT have served a unique role supporting Hurricane Sandy relief efforts in New York. As their relief mission ends, I’d like to recognize the 120 men and women who served for more than 40 days as crew on these ships.
FastLane: 'Tis the season...to travel safely
With the holiday season in full swing, safety might not be your first thought. But, when you travel for the holidays, it should be. Whether you plan to fly, drive, or take a bus, we've got some tips to help you get where you're going safely.
Grist: Foot forward: Walkability is the key to fixing cities
City planner Jeff Speck has found the panacea for our ailing cities, something that could make even Detroit come to life again: walking.
Wall Street Journal: U.S. Economy Will Face Drag Next Year
By SUDEEP REDDY
December 18, 2012
WASHINGTON—Deal or no deal, the U.S. economy will face a drag of some kind from Washington budget policy next year. The White House and GOP are just negotiating how much.
The latest offers exchanged by President Barack Obama and House Speaker John Boehner (R., Ohio) point to higher income taxes for many upper-income earners, smaller paychecks for almost everyone and reduced federal spending that could restrain an already slow-growing economy.
A central goal of the talks is to forge a deficit-reduction deal that would allow the government to avoid the fiscal cliff, the combination of tax increases and spending cuts scheduled to begin in January. The hope is that an agreement would do less damage to the economy while also erasing some of the uncertainty that has held back consumers and businesses, providing an offsetting boost.
The White House, in its offer Monday, made a key concession that would be felt by every U.S. wage earner: allowing the expiration of the payroll tax cut, a provision that has lowered the workers' share of Social Security taxes by two percentage points for the past two years. That translates into an average tax increase of about $1,000 a year for the typical American household making about $50,000 annually.
Letting the payroll tax rate revert to 6.2% from the current 4.2% would raise government revenue by about $125 billion next year, equivalent to 0.8% of total U.S. economic output, according to J.P. Morgan Chase JPM +0.89% .
Many forecasters say an increase in the payroll tax rate would damp consumer spending, weighing on the recovery. J.P. Morgan forecasts it would slow growth in 2012 by 0.6 percentage point, a sizable drag for an economy projected to expand by around 2% next year.
Many workers may not be aware of the likely change. "I think some people could be in for a pretty rude awakening when they get that first paycheck of the year," said Tom Porcelli, chief U.S. economist at RBC Capital Markets.
Some economists favor extending the tax cut to provide support to a weak economy. But others object to extending a measure that was intended as a temporary response. "I hope we get to more long-run thinking rather than short-term measures," said economist Lee Ohanian, a senior fellow at the Hoover Institution, a conservative think tank.
Other elements of the fiscal cliff negotiations remain in flux, making it difficult to estimate the economic effects of a potential deal. The White House and lawmakers are still negotiating how tax rates will rise for upper-income households and how investment income would be affected. They're also debating the size of spending cuts and when they will take effect.
The White House's latest offer includes an extension of federal unemployment benefits and some infrastructure spending, to provide some short-term stimulus to the economy. Many Republican lawmakers oppose both ideas.
Consumer and business confidence could be affected by the outcome of the negotiations. A sizable deal would remove some uncertainty and pessimism from the economy, potentially unleashing some spending and investment and cheering the stock market. "If an agreement is reached, there will be some kind of relief rally in equity markets that will help to offset some of the fiscal drag," Joel Prakken, chairman of Macroeconomic Advisers, a forecasting firm.
No deal could mean trouble, including a bigger hit to growth and a sharp drop in stock prices, several analysts say. "If we go over the cliff screaming at each other, it's a monumental failure of government to manage fiscal policy," Mr. Prakken said.
Politico Pro: Sandy bill’s extras draw attacks from the right
By KATHRYN A. WOLFE and BURGESS EVERETT
The $60 billion Hurricane Sandy disaster bill has become a Christmas tree laden with pricey ornaments: money for fisheries as far away as Alaska, a huge cash infusion for Amtrak and $2 million for roofs at the Smithsonian.
It might not be enough to derail the massive aid package so desperately needed by disaster victims in New York and New Jersey. But the spending riders have caught the eyes of enough conservatives inside and outside the Capitol to create roadblocks for a bill that should be flying toward passage.
Some of the line items being targeted are old saws for Republicans, such as $336 million for Amtrak. Also drawing ire are the Smithsonian’s roof repairs, $17 billion in HUD grants, more than $4 billion for Army Corps of Engineers water and navigation projects, and replacements for storm-damaged vehicles for agencies like the Secret Service and Customs and Border Protection.
It all adds up to “questionable spending,” Sens. John McCain (R-Ariz.) and Tom Coburn (R-Okla.) say, even as the Senate has begun debating the bill. Final passage is possible later this week.
Heritage Action for America and Club for Growth have both urged lawmakers to vote down the bill.
The bill’s supporters say this is no time for partisan jockeying in Congress.
“There’s been a lot of discussion I’ve had with my colleagues over the past few days about the bill — ‘We’re moving too quickly, it costs too much,'” Sen. Kirsten Gillibrand (D-N.Y.) said on the Senate floor Tuesday afternoon. “But please, for a moment think of the devastation in your own states, think of talking to a family with children who have no place to go.”
To take one of the larger line items, the White House had requested only $32 million for Amtrak. But the Senate’s bill, which the White House is supporting, would fully fund the passenger rail’s disaster request. McCain and Coburn have complained that the bill contains no “detailed plan” for how the Amtrak money would be spent.
Joe Boardman, Amtrak’s president and CEO, said $276 million would go for “enhanced protection and improved recovery capability” of New York’s Penn Station and its tunnels. But that sum also includes money to begin design and construction of Amtrak’s signature Gateway program, a $14.6 billion tunnel project intended to ease congestion between Newark, N.J., and Manhattan. The remaining $60 million would cover Amtrak’s operating losses incurred as a result of the storm.
Critics have also questioned the bill’s $10.8 billion for transit interests harmed by the storm, particularly considering that $5.4 billion would be expressly used to lessen future storms’ impacts on the Northeast’s transit systems.
Ed Wytkind, president of the Transportation Trades Department of the AFL-CIO, said the transit money will help with “vast transportation needs and is an integral component of the overall post-Sandy recovery, response and mitigation package.”
But some Republicans are pressing for the bill to be scrubbed of anything that wouldn’t meet an urgent need. That includes the billions of dollars included in the Senate bill for "mitigation," which is code for taking steps not only to fix the current problem but to reinforce those systems to withstand a future storm.
Gillibrand noted the Republican criticism of mitigation money, but said that when it comes to infrastructure projects in particular, mitigating future storm damage is crucial.
"The reality is, is if you're going to rebuild a subway like this and you don't do it in a way that protects against flooding the next time, then you're wasting your money," Gillibrand said.
Sen. Kay Bailey Hutchison (R-Texas), who sits on the Appropriations Committee, backs the approach advocated by House Appropriations Chairman Hal Rogers (R-Ky.), in which disaster aid would be moved in separate bills, with the most urgent aid going first.
“We ought to be as careful in assessing the needs and fulfilling those needs but not going into other areas that could be looked at by the committees in the light of day next year,” the retiring senator said in an interview. “We need to cover the immediate needs. That’s what supplementals are for. And we all want to do that.”
That won’t work, Gillibrand said.
“The Brooklyn Battery Tunnel alone would take $700 million to rebuild,” she said. “So when we’re talking about a bill, you can’t say, ‘Well, we’ll just fund a little bit today and we’ll fund the rest tomorrow.’ Because that’s not how business works. That’s not how a contract works.”
Senate Environment and Public Works ranking member Jim Inhofe (R-Okla.) said he’d seen an analysis of how the $60 billion is broken out and “I’ve come to the conclusion that the most I could support would be about 13 out of the 60.”
“When something like this happens, there’s always people that try to exploit it for more than it’s worth. I think that’s what happened here,” Inhofe said.
One item that’s really angered some conservatives — especially at The Heritage Foundation — is language in the Senate bill that would allocate $17 billion for Community Development Block Grant funding. Of that sum, $2 billion would be used to mitigate future disasters.
Patrick Louis Knudsen, a senior fellow at Heritage, called the provision “audacious” and an “embarrassingly transparent slush fund … that states can use as they wish.”
The Senate’s bill also would allocate $150 million for fisheries disasters — not just in areas affected by Hurricane Sandy, but for any area of the country where a fishery disaster has occurred. That could include Alaska, the Gulf Coast, New England and other areas not touched by the hurricane.
Sen. Mark Begich (D-Alaska), who requested the fisheries language, defended its inclusion, saying fishery failures in Alaska over the past three years have devastated communities and subsistence fishers. The money, he said, will “help make communities whole.”
The bill also includes funding for items that agencies call storm-related but are easy to demagogue. Among them: the Smithsonian money, which the McCain-Coburn hit list described as “$2 million to repair damage to the roofs of museums in Washington, D.C., while many in Hurricane Sandy’s path still have no roof over their own heads.”
Various agencies are also requesting money to replace automobiles totaled by the storm, which taxpayer groups have targeted as questionable. That includes:
$300,000 to replace Secret Service vehicles and communications equipment.
$855,000 to replace Immigrations and Customs Enforcement vehicles.
$2.4 million for Customs and Border Protection to replace vehicles (including mobile X-ray scanners) and other equipment.
$20,000 for the Justice Department’s inspector general, to replace vehicles, equipment and furniture.
$230,000 to the Bureau of Alcohol, Tobacco and Firearms to replace vehicles, communications equipment and furniture.
In addition, NOAA is requesting $44.5 million to repair and upgrade its hurricane reconnaissance aircraft, and $8.5 million to improve its weather forecasting equipment and supercomputer infrastructure. Taxpayers for Common Sense says those expenses aren’t “necessarily Sandy-related,” even though data from the reconnaissance flights is crucial for accurate hurricane forecasts and some climate scientists say better computer modeling could have provided even earlier warning about Sandy.
The oft-critiqued Army Corps of Engineers also would receive a chunk of change from the Senate bill. The bill would allocate $3.5 billion for water projects “related to the consequences of natural disasters,” of which $2.9 billion is to be used to “reduce future flood risk in ways that will support the long-term sustainability of the coastal ecosystem … and reduce economic costs and risks associated with large-scale flood and storm events.”
Additionally, the bill would allocate $821 million to help pay for dredging federal navigation channels and repair damage to corps projects nationwide that are “related to natural disasters.”
Asked if the concerns he and Coburn raised would be enough to keep the package from passing the Senate, McCain indicated the bill could be significantly modified on the Senate floor. However, that depends on whether Majority Leader Harry Reid decides to "fill the tree," which would cut off amendments.
"We have to see what happens to the amendments,” McCain said, adding that he and Coburn have already prepared around 10.
Republicans are pressuring Reid for an open amendment process, but the more likely outcome is a limited number of amendments, with Reid and Minority Leader Mitch McConnell agreeing to a list of what may be offered.
Meanwhile, the bill’s fate in the House is in question because it doesn’t offset the additional spending with cuts in other areas.
Some in the GOP conference have been agitating for at least some of the spending to have revenue offsets. Others, particularly in affected areas, say that’s hogwash.
“I don’t think it should be offset,” Rep. Peter King (R-N.Y.), whose Long Island-based district was hit hard by Sandy, said in an earlier interview. “We haven’t offset Katrina, we didn’t offset others, and to me, this is a natural disaster and it is separate.”
Opposition in the House is not as loud as from conservative GOP senators, partially because many in the lower chamber are preoccupied with the fiscal cliff negotiations.
Incoming House Transportation Chairman Bill Shuster (R-Pa.) indicated a wait-and-see attitude to what comes out of the Senate.
“I haven’t taken a hard look at it,” he said. Shuster noted that some of the reforms included in the transportation law enacted earlier this year will allow infrastructure to be built faster and undergo fewer redundant reviews, which he said allows cities and states to “flex” their money to where repairs are needed.
Rogers has said not to expect the bill to be finished before Christmas.
Politico: Morning Transportation
By Adam Snider and Burgess Everett, Featuring Kathryn A. Wolfe and Jessica Meyers
LaHOOD IN THE HILL HOOD: Transportation Secretary Ray LaHood swings by the Capitol this morning to announce funding “that will significantly expand transit options in Honolulu.” The Honolulu Authority for Rapid Transportation and FTA signed a full funding grant agreement laying out the Fed’s $1.55 billion contribution to the Oahu rail project in November. The Aloha State will be well-represented at the presser: In addition to LaHood and FTA head Peter Rogoff, Sen. Daniel Akaka, Sen.-elect Mazie Hirono, Rep. Colleen Hanabusa and Jennifer Goto Sabas, chief of staff for the late Sen. Daniel Inouye, are set to attend. Hanabusa, who Inouye wanted appointed to his seat, is a big supporter of transit, writing in a 2011 POLITICO op-ed that D.C.’s Metro system “makes my commute to Capitol Hill easy” and that the Honolulu project is “sorely needed — and long overdue.”
THE TRANSIT MAYOR? New York MTA head Joe Lhota will step down on Friday to join the city’s 2013 mayoral race, New York media outlets reported last night. Lhota, who won major kudos for the agency’s handling of Hurricane Sandy and the rapid cleanup and restoration of the nation’s busiest transit system, will run in the GOP primary to succeed Michael Bloomberg. City law prevents him from running for mayor while also holding the MTA post. CBS 2 already looks ahead at his replacement, reporting that “New York City Transit Authority President Thomas Prendergast has in the past taken the reins when Lhota has been out of town, but ultimately the decision will fall to Gov. [Andrew] Cuomo to appoint a replacement.” More: http://cbsloc.al/Tx9hvz
About that $336 million for Amtrak: The $336 million would mainly go to three things: Preservation of a pathway to New York’s Penn Station as part of the Gateway Tunnel project (conceived in the aftermath of Chris Christie’s axing of the ARC tunnel), developing a “high density signaling system” in the East River similar to the set-up under the Hudson and rejiggering a power substation in Kearny, N.J., both to guard against flooding and to add additional power for the Gateway project.
The railroad’s mascot: Washington Post columnist Mike Wise has dubbed the Redskins’ stellar rookie running back “Amtrak Al.” http://wapo.st/U5ZSNM
No jokin’ ‘bout Hoboken: The busy PATH service from N.J. to N.Y. finally comes back online for the “Mile Square City.’ More deets from the PA: http://bit.ly/onuxo
TOYOTA’S RECORD FINE: NHTSA smacked Toyota with a walloping $17.35 million fine yesterday for failing to report safety problems until federal regulators intervened. It’s the single highest penalty ever paid for recall violations, is the maximum allowed under law and marks Toyota’s fourth infraction in the past two years. In early 2012, regulators started noticing a problem with floor mat pedals in 2010 Lexus RX 350s. NHTSA contacted Toyota in May about a troubling trend, and a month later the company said it knew of 63 possible “floor mat pedal entrapments” since 2009. Toyota’s own technicians blamed unsecured or ill-fitting floor mats for unwanted accelerations, the agency said. The world’s biggest automaker in June recalled 154,036 of the 2010 Lexus RX350 and RX 450h models. Pros get the skinny from Jessica: http://politico.pro/SNwg9a
TRANSPO NOMINATIONS VOTE TODAY ... MAYBE: The Senate Commerce Committee is slated to vote today on a handful of pending nominations, including three transport-related ones. On the agenda: Polly Trottenberg, picked to be undersecretary of Transportation for policy and Christopher Beall and Yvonne Burke, both chosen to be on the Amtrak Board of Directors. The committee held a hearing on the nominations earlier this month, but in a sign of just how noncontroversial some nominations can be, the two Amtrak picks didn’t even testify in person. Commerce Chairman Jay Rockefeller said the idea is to add the trio to a brewing nominations package set for end-of-the-year approval, but he declined to offer any sort of assurance that those three or FAA Administrator nominee Michael Huerta will get through the upper chamber. “With nominees, one never knows,” he said, adding of Huerta, with a note of frustration: “He still isn’t done.”
Follow-ups: Our efforts to get the clever chairman to prognosticate further on nominees led him to turn to a pair of other reporters and exclaim: “I’m trying to answer his question and he always builds on it … it’s like building the twin towers.”
IT’S NOT JUST THE HOUSE THAT STREAMLINES: DOT announced six new initiatives yesterday designed to cut paperwork and save money by reducing the burden on businesses and government employees. Three of the changes are at FRA, including letting some small railroads use electronic hours of service records. Those railroads that use paper copies won’t have to submit every single form to FRA and the engineer certification process will be simplified. In aviation, the FAA is working to end the need for a doctor’s note for passengers carrying medical oxygen tanks onto planes and will start testing a new electronic record system for airplane parts in 2016. PHMSA is streamlining its shipping records requirements. The changes should save 450,000 hours of labor, DOT said.
THE DAY AHEAD: 9 a.m. — Transportation Secretary Ray LaHood makes a major funding announcement that will significantly expand transit options in Honolulu. S-128, Capitol.
1 p.m. — Baum & Associates analyst Alan Baum and Luke Tonachel, senior vehicles analyst from the Natural Resources Defense Council, outline their expectations for high mpg vehicles in 2013. Teleconference.
THE AUTOBAHN (SPEED READ)
- Walkscore now scoring cycling. The U.S. Capitol gets an 89: “Flat as a pancake, excellent lanes.” The bike-to-work half of MT agrees. http://bit.ly/XBG6r2
- ACI-NA chief Greg Principato believes sequestration “will not happen.” http://bit.ly/WoouUi
New York Times: Experts Warn of Budget Ills for the State, Lasting Years
New York State faces long-term budget problems that are compounded by the teetering finances of its local governments, an aging infrastructure and the possibility of severe cuts in federal funding, a panel of fiscal experts said Tuesday.
New York Times: A Suburban Wasteland in Virginia Gets a Modern Urban Feel
MERRIFIELD, Va. — To see Merrifield, Va., today, with its sleek white Target, its narrow 1920s-style streetscape of specialty food shops along Glass Alley and the rest of the $542 million mixed-use Mosaic District is to nearly forget this unincorporated area’s former life as an uninviting industrial suburban crossroads.
Mobilizing the Region: State to Shoulder Thruway Costs to Make Way for TZB
The latest step in the Governor Cuomo’s march toward building a new Tappan Zee Bridge was taken yesterday when the New York State Thruway Authority’s Board of Directors accepted Tappan Zee Constructor’s $3.1 billion bid to replace the existing transit-less span with two new, wider transit-less spans. When accounting for additional costs that include project financing and management, the total bill comes to $4 billion. The State will borrow money through bond issuances to pay for the project and repay those loans with tolls. According to transportation economist Charles Komanoff, the cost to ride across the bridge could rise to an average of $11 as a result.
NJ.com: Mayors use social media to push for utilities improvements after Sandy
Joe Proudman/The Star-Ledger The mayor of South Orange is reaching out to other local officials Tuesday to try and encourage state legislators to put pressure on the Board of Public Utilities to put its investigative findings into actions.
NJ.com: Threat of longshoremen's strike could impact Port of New York and N.J.
The threat of a longshoremen's strike this year once again looms over ports from Maine to Texas, after contract talks that had already been extended 90 days broke down once again today.
Los Angeles Times: Traffic fatalities down across U.S. but up in California
The number of people killed in traffic accidents last year dropped to its lowest point in more than six decades elsewhere in the nation but rose in California, according to new federal transportation figures.
Yahoo News (Reuters Reprint): Miami-Orlando passenger train project clears key hurdle
ORLANDO, Florida (Reuters) - A Florida company cleared a major hurdle on Tuesday to move ahead with a project to build a new $1.5 billion passenger train service linking Orlando and Miami that is being billed as the first privately run rail link between two major U.S. cities.
Gazette.Net: State, Montgomery leaders share transportation woes
With the question of how to fund Maryland’s Purple Line as a backdrop, Montgomery County leaders assembled stakeholders from across the state in Annapolis last week to weigh solutions to the state’s transportation funding shortage.
Minnesota Public Radio: Golden Valley approves fourth light-rail route
GOLDEN VALLEY, Minn. — Early plans for what could be the Twin Cities' fourth light-rail transit spoke are moving ahead, with the blessing of the city of Golden Valley. The city council in the first-ring suburb on Tuesday evening gave its initial approval to the proposed Bottineau route.
Oregonian: Portland officials postpone report on new transportation revenue
The Portland Bureau of Transportation was supposed to present a report to the City Council on Wednesday outlining new revenue options for roads and travel. The city clerk's office listed the scheduled presentation on its website as recently as last week.
AnnArbor.com: CLIMATE ACTION PLAN: Ann Arbor sets goal of reducing greenhouse gas emissions by 90% by 2050
If the state of Michigan isn't ready to get serious about climate change, Ann Arbor officials say they're at least prepared to take matters into their own hands at the local level.
Wall Street Journal: PATH Brings Back Limited Hoboken Service
By Heather Haddon
December 18, 2012
The first PATH route between Hoboken and Manhattan will return Wednesday morning, following more than seven weeks of repairs from superstorm Sandy.
Service will run seven days a week from 5 a.m. until 10 p.m. from the New Jersey town to the 33rd Street station. Travel between Hoboken and the World Trade Center station “remains several weeks away” because of ongoing signal-equipment repairs, the Port Authority of New York and New Jersey said Tuesday.
Limited 24-hour service is expected “in time for New Year’s Eve,” the Port Authority said. In the meantime, PATH service will continue to stop at 10 p.m. and weekend service to the World Trade Center and Exchange Place remains suspended.
Hoboken has been without PATH service since Sandy hit on Oct. 29, and the absence of transit service has crippled businesses in the transit-dependent downtown and upended many commuters’ routines. More than 29,000 passengers take PATH trains from Hoboken on normal weekdays. Those commuters have resorted to buses or more expensive ferries since the storm.
“The reopening of the Hoboken PATH station is a tremendous relief for our commuters and local businesses,” said Hoboken Mayor Dawn Zimmer in a statement.
With PATH’s return to Hoboken on Wednesday, all 13 stations that had been swamped by floodwaters will be back in operation. PATH employees and contractors have worked around the clock to pump out more than 10 million gallons of water and fix equipment, according to the Port Authority.
Moving 10% of long-distance trucking by rail would save over a billion gallons of fuel per year.