Challenges facing Transportation Secretary Ray Lahood

The American Society of Civil Engineers recently gave the nation’s infrastructure a mere passing grade of D. The society claims that the US infrastructure will need an investment of $2.2 trillion to fix the repairs.

The House recently passed a stimulus bill with nearly $43 billion investment in transportation. The Senate is contemplating on a similar bill with nearly $40 billion for transportation infrastructure. This stimulus is a significant investment in our nation’s transportation infrastructure since the Great Depression.

Transportation Secretary Lahood (R) is tasked with the execution of such a massive investment. His primary objective will be to make sure that the investment is implemented as soon as possible to provide quick stimulus to the economy. However transportation improvement projects involve bureaucracies such as Federal Highway Authority, State Departments of Transportation, Department of Environmental Protection, etc. Immediate execution of the transportation stimulus will require quick response from such institutions and Secretary Lahood will have to actively involve to foster inter agency communication.

Next, the federal surface transportation act – SAFETEA-LU that provides funding for numerous surface transportation projects will lapse in September 2009. Secretary Lahood will have to plead his case for reauthorization of the federal funding in front of the congress. The Federal Highway Trust Fund, based on the unpopular gas tax, is already bankrupt and the congress recently bailed it out with an emergency cash infusion of $8 billion. Future federal funding for transportation projects will depend on how the Trust Fund will be replenished without increasing the gas tax.

During Bush administration, Secretary Peters promoted market based mechanisms such as Public Private Partnerships, Congestions Pricing and Asset monetization. These mechanisms have failed because of their unpopularity with the public. Secretary Lahood will have to pick up the mantle and promote the importance of such innovations to the general public or come up with alternative financing schemes that are appealing to the public.