Next U.S. Transportation secretary will be faced with a daunting challenge

Article by Christian Andrei, on November 13, 2012

Whoever gets appointed as the next U.S. Transportation secretary will be faced with a daunting challenge since it’s cash-starved and it’s financed by a gasoline tax almost nobody seeks to raise. The plans set by President Barack Obama and the soon-to-be-named DOT leader will determine the course of the U.S. transportation for many years to come. The president said that for his second term, he will be in support of highways and transit systems crucial to the economy. He may also take the opportunity to urge the construction of a high-speed passenger rail, which was delayed by the refusal of Congress to continue paying for it. Transportation will not be the main topic in the upcoming discussions between the White House and Congress.

Rather, they will talk about how to avoid Dec. 31's fiscal cliff, when some tax cuts expire and automatic spending reductions will begin. Mort Downey, who is formerly the deputy transportation secretary and currently a senior adviser at Parsons Brinckerhoff Inc., said that the past two gasoline-tax increases, in 1990 and 1993, occurred only due to deficit-reduction agreements. Downey said that they have a chance to make a mark on transportation because the environment is “easier.”

It’s not a sure thing if Ray LaHood will remain as secretary though. In the past year, the former Republican congressman has implied that if Obama asks him, he will be willing to stay but he doesn’t discount leaving. Last June, the Congress and the Obama government entered an agreement on roads and transit for a period of two years. Rather than increasing the gasoline tax (its biggest source of funds for road, bridge and transit spending), the legislation spent $18.8 billion in general taxpayer money, aside from fuel taxes, to continue spending at existing levels, estimated at around $52 billion annually, through fiscal 2014.

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