By  on August 14, 2007

WASHINGTON — Congress took several legislative steps to improve the nation's complex and aging network of highways, railways and ports before it adjourned for the August recess, leaving retailers concerned about cost and implementation, but port authorities pleased about funding for security programs.

In the fresh round of legislation, Congress considered three bills designed to strengthen security and improve the infrastructure of the overworked transportation system.

The House passed two spending bills — one to fund the Department of Homeland Security that would boost federal grants for port security programs and a second funding programs at the Department of Transportation and the Department of Housing and Urban Development for highway improvements. The Senate has not taken up either spending bill and President Bush has vowed to veto both of them because they exceed the spending limit in his budget request blueprint for fiscal year 2008 that begins on Oct. 1.

Bush signed one of the three bills into law, implementing many of the security recommendations of the 9/11 commission and also requiring that 100 percent of all U.S.-bound cargo containers be scanned at foreign ports within five years.

Improving the transportation system has become an issue in the 2008 presidential race, in the wake of the bridge collapse in Minneapolis in which nine people are known to have died.

Sen. Hillary Clinton (D., N.Y.), the front-runner in polls for the Democratic party's nomination, outlined a comprehensive infrastructure improvement plan on Wednesday in New Hampshire. Clinton said if she were elected president, she would propose spending $10 billion over 10 years to repair and upgrade roads, bridges and seaports. The senator said she would increase the budget for the DOT's congestion reduction programs by nearly 50 percent to $600 million a year.

"The degradation of our infrastructure isn't just a serious threat to our safety; it is also a grave threat to our economy," Clinton said.

She also proposed to create a national policy for ports, which she said are "in substandard condition," and address congestion at the major terminals with state and local governments and the private sector.

The House-passed budget proposal for the DOT for fiscal year 2008 would authorize $50.7 billion in discretionary spending, which is $4 billion more than enacted last year and $2.8 billion more than Bush requested. Highway improvement programs would receive $40.2 billion, which is $1.25 billion more than enacted last year and $631,000 more than Bush requested."Highway congestion is steadily increasing because use is outstripping capacity," said Erik Autor, vice president and international trade counsel at the National Retail Federation. "The current funding level is not even able to keep up with maintaining the current infrastructure, let alone build new infrastructure."

Autor said the Minneapolis bridge collapse could change the debate over the need for a national transportation policy.

Congress, which passed a multibillion-dollar highway bill in 2005 for an upgrade of the transportation system, has tapped the private sector for ideas on how it can fund the expansion of the nation's highways, railways and ports, and mitigate the impact on commercial users.

President Bush, in a national press conference Thursday, said he was against raising the federal gasoline tax to repair bridges until Congress changes the way it funds highway repairs.

Some experts have considered revenues from toll roads to pay for much-needed expansions, but many businesses, such as Wal-Mart Stores Inc., which has thousands of trucks on the road, claim the tolls it pays translate into a direct cost to the company and consumers.

More than 19 billion tons of freight, valued at $13 trillion, was carried over 4.4 trillion ton-miles in the U.S. in 2002, according to the DOT. In less than 20 years, the nation's freight tonnage is projected to increase 70 percent, which transportation experts say is a recipe for a freight-capacity crisis, since highway capacity is expanding too slowly. Bottlenecks lead to significant shipping delays, totaling about 243 million hours annually, costing direct users $7.8 billion annually, according to government figures.

As part of the House-passed transportation spending bill, legislators approved an amendment offered by Rep. Peter DeFazio (D., Ore.) that would prohibit the use of funds to establish a cross-border pilot project to allow Mexican-based motor carriers to operate beyond the commercial zones in the U.S., dealing a setback to a program Bush has tried to implement for years.

Cross-border trucking between Mexico and the U.S., a stipulation in the North American Free Trade Agreement enacted in 1994, has been held up for years by legal challenges, safety concerns over substandard Mexican trucks and fierce opposition from the Teamsters Union.For importers, which brought in $6.06 billion worth of apparel and textiles from Mexico for the year ending May 31, the program allowing Mexican trucks access to U.S. highways beyond a 20-mile zone would have been beneficial, but industry executives have all but given up hope on it.

"It would have been helpful to those companies operating in Mexico," said Nate Herman, director of international trade at the American Apparel & Footwear Association. "Right now, when people bring in apparel from Mexico, it gets to within 20 miles of the border and is unloaded from a Mexican truck and reloaded onto a U.S. truck. So, you've lost time and there are extra costs."

Herman said the security of the shipment could be potentially compromised as well under the current system.

While many industry associations were unsatisfied with the two bills, port authorities were sanguine about a third bill Congress acted on before the recess.

The Senate passed a $37.6 billion Homeland Security spending bill that would give ports $400 million in federal grants in fiscal year 2008 for security measures to help prevent terrorist attacks. The bill must now be reconciled with a House-passed spending bill in conference.

The action in Congress would close a funding gap, according to port authorities, who have argued the federal Port Security Grant Program, established in 2002, is underfunded.

Despite repeated calls from the port authorities to increase the funding to $400 million annually, Bush's budget request for fiscal year 2008 proposed $210 million for the grant program, which was the same request level in fiscal year 2007.

Democrats now in control of Congress claim they are "fixing" the "oversight" by Bush with their budget increase. The House would also increase the funding for the grant program to $400 million.

"We are thankful for additional money," said a spokesman for the American Association of Port Authorities, in an interview with WWD in May. "The ports have been living hand to mouth on the meager port facility fund grants they have been receiving...and unfortunately they have, in large part, either had to forgo a lot of projects they felt they needed or they had to divert money from other things, such as improvements at their terminals."

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