On Thursday, just a day after final passage in the House of a historic pandemic relief and stimulus bill, President Joe Biden signed it into law.
The bill includes billions for airlines, transit agencies and Amtrak to help with some deep losses suffered the past year.
On this week's edition of the Talking Michigan Transportation podcast, Susan Howard, program director for transportation finance at the American Association of State Highway and Transportation Officials (AASHTO), talks about the transportation components of the bill.
Later, she offers her take on negotiations as the president stakes his presidency on adopting an ambitious infrastructure plan.
The stimulus bill will extend payroll support to airlines, helping to prevent layoffs of more than 27,000 workers when the current program expires at the end of March. It also would provide $8 billion in support to U.S. airports. Transit agencies across the country will see $30.5 billion in grants to help make up for dramatic losses in ridership. Amtrak would receive about $2 billion.
In a January report, the American Public Transit Association (APTA) said public transit ridership dropped by nearly 80 percent in April 2020 and remained more than 60 percent below 2019 levels through the rest of the year.
And these are essential workers who often cannot work remotely and rely on transit to get to their jobs.
Howard explains why the parameters of the stimulus bill confined the transportation funding to air, rail and transit services.
Now, attention turns to President Biden's hopes for what has eluded his predecessors in recent history: a truly comprehensive infrastructure bill. Howard echoes the analysis of others about how the fuel tax offers diminishing returns, especially as General Motors, Ford and other automakers stake their companies’ futures on electric vehicles.
Despite the cliché about how infrastructure enjoys bipartisan support, that ends when talk turns to funding and revenue. Will this time be different?
And can the president and his USDOT Sec. Pete Buttigieg come up with something that pleases labor leaders and environmentalists?
Writing in the Atlantic, Robinson Meyer argues that "in little-noticed ways, the rescue bill is going to reshape several areas of American climate policy."
On Thursday, just a day after final passage in the House of a historic pandemic relief and stimulus bill, President Joe Biden signed it into law.
The bill includes billions for airlines, transit agencies and Amtrak to help with some deep losses suffered the past year.
On this week's edition of the Talking Michigan Transportation podcast, Susan Howard, program director for transportation finance at the American Association of State Highway and Transportation Officials (AASHTO), talks about the transportation components of the bill.
Later, she offers her take on negotiations as the president stakes his presidency on adopting an ambitious infrastructure plan.
The stimulus bill will extend payroll support to airlines, helping to prevent layoffs of more than 27,000 workers when the current program expires at the end of March. It also would provide $8 billion in support to U.S. airports. Transit agencies across the country will see $30.5 billion in grants to help make up for dramatic losses in ridership. Amtrak would receive about $2 billion.
In a January report, the American Public Transit Association (APTA) said public transit ridership dropped by nearly 80 percent in April 2020 and remained more than 60 percent below 2019 levels through the rest of the year.
And these are essential workers who often cannot work remotely and rely on transit to get to their jobs.
Howard explains why the parameters of the stimulus bill confined the transportation funding to air, rail and transit services.
Now, attention turns to President Biden's hopes for what has eluded his predecessors in recent history: a truly comprehensive infrastructure bill. Howard echoes the analysis of others about how the fuel tax offers diminishing returns, especially as General Motors, Ford and other automakers stake their companies’ futures on electric vehicles.
Despite the cliché about how infrastructure enjoys bipartisan support, that ends when talk turns to funding and revenue. Will this time be different?
And can the president and his USDOT Sec. Pete Buttigieg come up with something that pleases labor leaders and environmentalists?
Writing in the Atlantic, Robinson Meyer argues that "in little-noticed ways, the rescue bill is going to reshape several areas of American climate policy."
Cranson: Hello. This is the Talking Michigan Transportation podcast. I am Jeff Cranson, director of Communications at the Michigan Department of Transportation.
[Music]
Cranson: On Wednesday, the US House of Representatives followed the Senate in passing President Biden's $1.9 trillion-dollar pandemic relief and stimulus bill. We know some of that will go to airlines, transit agencies, and Amtrak to help with some deep losses they suffered the past year. Today, Susan Howard, program director for Transportation Finance at the American Association of State Highway and Transportation Officials (AASHTO), will talk to us about the transportation components of the bill and what we can expect as the president takes up his next big priority – infrastructure.
Cranson: Once again, I am with Susan Howard of AASHTO. And, Susan, thank you for taking time to do this. Could you first just talk a little about your background and what you did before AASHTO and what you do in your current position?
Howard: Sure, my background is really in the transportation policy side here in Washington D.C. I kind of fell into transportation work, but when I really began my career working on Capitol Hill, I looked into a job where I worked for a member of the House Appropriations Committee and transportation was one of my assigned issue areas. And so, I really just kind of learned on the job and really learned a lot in that position. I then transitioned to a job with a state DOT from my home state of North Carolina, representing them in Washington on policy and legislative matters, which again was a great kind of hands-on learning experience about how state DOTs function and how they use the federal aid program. And, then I went to work for a different association that focused on local government, local councils of government, regional planning - so I did a little bit of transportation work there, but I was really happy to come to AASHTO and be able to focus full-time on transportation policy. In my role, I manage our portfolio when it comes to federal funding and financing that’s both a policy job and also a kind of best practices educational job. I run something called the BATIC Institute, which is an educational and capacity building service for state DOTs about the use of innovative finance technique, innovative finance techniques to fund transportation projects.
Cranson: So, when it comes to transportation finance and certainly education to the public and lawmakers and media about transportation finance, I don't think I can overstate the importance of your job in this climate and what we live in decades of under investment in our infrastructure. So, talk a little bit first before we get into the stimulus bill about those challenges trying to educate people about how transportation is funded.
Howard: Yeah, it is a real challenge because the transportation is something obviously that affects every person every day. But it is one of those areas of government and funding that is a little bit invisible to the average person, I think. Plus, our system for the federal-state relationship it's very complex and when it comes to transportation. Transportation is unique among other federal programs for its budget type of budget authority - the, you know, the way it's distributed by formula. And it's a very nuanced program that, frankly, just is so detailed that a lot - I don't think - a lot of people know much about it unless you happen to fall into this line of work or work for a state DOT and are dealing with federal aid every day. So, we do have a big job to do in educating the public about how that small amount of money that they pay at the at the gas pump translates to projects that benefit their daily life. And, we have a job to do on Capitol Hill educating members about the nuances of the program, why it's different, and why it needs sustained investment over time. The nature of transportation capital investment, again, of course, is over several years and state DOTs put a lot of effort and time into creating their capital programs, which, again, have to be executed over multiple years. So, you know the interplay between appropriations and authorizations is unique, the relationship between the federal government and the states and delivering transportation is unique, so it is kind of a continuous educational job for both the public and the Hill, I think.
Cranson: The more you know, the more you realize what you don't know when it comes to transportation especially when it comes to funding. So, this $1.9 trillion, trillion with a “T”, stimulus pandemic relief package includes you know a decent amount of money for transportation, but not surface programs that AASHTO mainly focuses on. But can you talk a little bit about what you think it will mean to airlines in terms of having to, you know, furlough more people, and to the transit agencies across the country?
Howard: Yeah, absolutely. So, I think that the key takeaway from this package is that it really is going to provide some immediate and necessary payroll support for the transportation sector. Particularly transit agencies who have been just really devastated by the by the pandemic as their ridership has just really tanked.
Cranson: And, you know, you could point out these are the people that that need it most - they are the kinds of workers that can't work from home and they most need a ride, they need to get to work.
Howard: Absolutely.
Cranson: Yeah, and yet, still at risk using transit, so it's really a double whammy.
Howard: Absolutely. They have been hit really on all sides from it and we have, you know, we depend upon it here you know in the Washington D.C. area. We depend upon our metro system to move lots and lots of people, and it's, you know…and in the peak it does and with the pandemic you have fewer and fewer those like you know typical nine-to-five office workers have been riding it, but we certainly have had to maintain that level of service for the frontline workers and healthcare people who need to get around and who depend upon it. So, I think the immediate impact will be in those sectors for transit and airline workers and even aviation manufacturers who are included in this package that sort of immediate payroll support. I mean, I think that our transit system here in D.C. immediately announced like we will be able to cut off any more service and staff cuts right away. The airline industry has said something similar - you know those layoffs we had planned a month ago - forget about it we can do this; we can move forward now. So, I think that kind of stability is actually really important for the industry as a whole. And, so I kind of I kind of envisioned this stimulus package as a really direct shot in the arm to, you know, industries that here a year later are still really struggling to keep the lights on.
Cranson: Yeah, so if there was no good reason, I guess, to include anything when it came to just roads and bridges and surface transportation in this particular relief bill, I mean, was that discussed at all and was the decision that we'll just take that up later?
Howard: Well, it's, yeah, it's a kind of complex, but I think the short answer is that state DOTs got $10 billion dollars in direct assistance in the stimulus bill that was passed in December. That was fresh, you know, fresh on the minds I think of lawmakers when we started this process for this stimulus bill. Also, this stimulus bill was different because it was done under budget reconciliation, which is a whole separate podcast probably to explain how that process works, but in short it was a pretty narrowly tailored package. And it was sort of handed off to Congress by the new presidential administration. There was not a lot of room, there was not a lot of room for negotiation or too much tweaking. It was sort of it was a directive essentially from the House and Senate leadership to their committees to say here is what you have for your committee and here is how we want you to allocate it. So, we decided at AASHTO that our focus should be on, you know, looking forward to either long-term stimulus or surface transportation reauthorization or some combination of those two. If those two get married together, we felt that with the $10 billion dollars that had just been allocated to state DOTs - we didn't necessarily have, you know, really the fortitude to approach Congress and ask for another immediate infusion of funds. We wanted to see how that $10 billion dollars, you know, was able to assist state DOTs and if we need more, we can certainly pursue that down the road. But, you know, the big picture for us in a lot of ways is the long-term reauthorization of the program.
Cranson: So, let's turn to that and uh and President Biden's promise to do something serious about infrastructure, which obviously we've heard before. And, as you know, Secretary Pete Buttigieg of U.S. Department of Transportation joked that, you know, this is not going to be a Groundhog's Day thing anymore - that we're really going to do something with infrastructure week. Um, what's your prognosis, and be honest with us about something big happening?
Howard: Sure, well I definitely think that the will and the intent is there from the administration. I don’t know that we know quite yet the parameters and scope of it. Are we looking at another bill like we had in 2009 that was a very direct spending for transportation and infrastructure focused on job creation and really stimulating the economy? There are a lot of policy goals that they've talked about wanting to also include in this infrastructure package - primarily climate change and job creation, as well. So, what it looks like I think it's still up in the air. They've been talking to a lot of state DOTs about, you know, project specific needs. Like what, you know, if you had unlimited resources, or if you had a very big, you know, infusion of federal funds, what would you would you spend it on and how quickly could you do it? So, there's certainly a focus on that kind of, I think, big wanting to do something big and bold.
Cranson: So, when you think about the long time resistance to doing anything new with revenue, especially among congressional republicans, and knowing that if this is going to be big that people on both sides are not going to just want to do it with existing revenue, do you see any daylight there for some in the house and senate to come around on vehicle miles traveled or something new that could actually generate revenue since the federal gas tax hasn't been raised since 1993?
Howard: I sure hope so. This has been, this has been kind of the unrealized dream of my career, I guess I would say.
Cranson: You and me both.
Howard: Yeah. Definitely there's interest in VMT and that's picked up even more in recent weeks with really the bold announcement from car manufacturers, GM in particular, about, you know, transitioning the fleet to electric, as well as states like California that have set very high targets and goals for transitioning. And there's a recognition that the gas taxes that currently exists would obviously not capture revenue from vehicles that don't use gasoline. So, what's next how do we move towards the future? And, VMT has been, of course, on the radar and talked about for years and years and years, and so, I think the next surface translation bill is an opportunity to really move the needle. And what we really need to do is figure out how to get from where we are with a number of states that have done really successful pilot programs to how do you answer the questions that need to be addressed at the national level in terms of things like the ease of administration, you know, how to account for traffic that goes across states driving across states. You know, how do we set up a system that can be a national system to implement this. So, the interest is there I don't know exactly where it will go specifically and I also think that in terms of looking at a new another package another infrastructure package or a new infrastructure package there's already starting to be a little bit of trepidation on the Hill about, about how it's funded and the fact that it needs to be funded rather than, you know, these recovery bills that we've done recently have all been deficit spending - and that's fine. I think everybody's accepted that there's going to have to be some of that to be able to really jumpstart the economy and help, really help people who are desperately in need. But, at some point I think there's going to reach a crossroads where folks are not going to be willing to continue to do that kind of spending and so what that means - I'm not sure what that means. It either has to be new revenue or cutting somewhere else. So…
Cranson: Well, and that should be the simplicity of it, right? Traditionally, we thought transportation, especially roads and bridges, should be based on a user fee and the people that, you know, drive on the roads and bridges should pay for the roads and bridges. And, for a long time that worked with the gas tax. As you point out, it's not going to going forward, and VMT is certainly getting there and I think Chairman DeFazio obviously coming from a state that's had some success with it, I'd like to see it happen. But, when everybody says, well this is the one thing we can agree on you know Republicans and Democrats, I think all they agree on is that our roads and bridges are falling apart. I don't think or know that there's any broad agreement on how to fund it. I mean what do you think? What would be your best sell to, you know, a tax pledge Republican on why they need to support revenue for transportation?
Howard: Well, I think the best argument is the one that you hit upon that that we have a user pay system for transportation that was instituted to, you know, build the interstate system many decades ago. That it is at a crossroads now and to build the kind of transportation network that we need for the future that's modern, that's streamlined, that is accounting for all of these different technologies that are really coming at us very quickly - whether it be electric vehicles, connected and automated vehicles, or, you know, any other manner of things. We're not in the best position to meet that challenge and so, yeah, I mean you're absolutely right there's always bipartisan agreement that we like infrastructure and it's the type of investment that's important for the government to do. But we've never been able to come to a consensus about the revenue side and I don't know that much has changed in that calculus to be honest with you. Everyone's looking for the solution and it may be that there are many solutions. [Laugh] It may be that it's a, it's more of a menu than just one option and it may take us many several years to trans transition to a VMT, and so, you know can there be something in the interim. And that's, you know, I think over the past few weeks we've heard more members that were, have long been supporters of a gas tax increase start to tiptoe away from it because I feel they just think they feel like the ship has sailed and if it hasn't been successful in the past why would why would it be successful now. And they may, and hey may be correct.
Cranson: Yeah, so when you think about going forward and what the president has talked about and what Secretary Pete has talked about how do you see that that fight playing out between the traditional labor wing of the party that would like to have the traditional jobs involved in building roads and bridges and those that are pushing for you know climate change to be a major factor in this going forward? And you know what home people think of when they think of better infrastructure others think is bad infrastructure you know they don't want more roads and bridges they want to decommission freeways and they want to think about ways to support multimodal and pedestrian uses. I mean that's going to be a battle within the bigger battle, right?
Howard: Yeah, absolutely, and the way we've been successful in the past and getting long-term surface transportation legislation passed is through building a broad coalition that includes all the types of groups you mentioned – labor, the industry, construction industry, and contractors, the multimodal folks as well. We've had a balance that's been able to advance this through the years. I think that, you know, for the new administration they don't see, you know, they don't see climate as an antithesis to jobs they see it as, you know, kind of creating a new, a new revolution, a new sphere. And I think there's some, you know, potential there - there's also I think a feeling that we need to focus on system preservation. And I do see a trend more towards that as opposed to building new - can we focus on improve making improvements to the system that we have? There's certainly an interest in things like smart streets and more comprehensive planning around other modes bicycle and pedestrian in particular. And, again, I think DOTs have been doing a lot of this already through their own programs, their programs are not just capital – we, you know, obviously have to maintain a wide network of roadway, but we also have multimodal assets as well that we support. So, it'll be a balancing act, I think, on the messaging part and in building the coalition on the Hill. They're kind of, you know, to pass something this big with this big of a price tag there often has to be, you know, kind of a way to bring everybody to the table with something that they want, and we've seen that in the past - and how some of these bills have been written with new you know new formula programs that really meet policy goals. In order to, you know, build that tent to bring, to bring bipartisan support and I think we'll have to do something similar to that this go around as well.
Cranson: Well, you're the second person on the podcast in a couple weeks to sound a little bit of optimism about what can happen, so we'll take some solace in that, I guess. Thanks for taking time to do this, Susan. We'll have to talk more sometime. It'll be interesting to get your perspective as a bill gets introduced and things really start rolling.
Howard: Absolutely! I'd be happy to. Thank you for having me.
Cranson: Thank you again for listening to this week's edition of the Talking Michigan Transportation podcast. I would like to thank Randy Debler and Corey Petee for engineering this week's podcast. To subscribe to show notes and more, go to Apple podcasts and search for Talking Michigan Transportation.