Interview: Senator Max Baucus on Transportation, Deficit, Rural Issues

Senator Max Baucus (Dem. Montana) spoke with Jackie Yamanaka of Yellowstone Public Radio on Thursday. The Chairman of the Senate Finance Committee discussed his role as a member of President Obama's deficit commission and the need for a long term transportation authorization bill. He wants more debate on balancing rural and urban infrastructure spending before he'll support several of the proposals recommended the commission.

Listen to the interview or read the full transcript below.

Jackie Yamanaka: Thank you Max for joining me to talk about transportation. There is a tax component and I will get to that, but first I wanted to ask you about the extension of the transportation bill, that the House passed last night…What are the prospects the Senate will do the same before the end of the year?

A better solution is to, next year, get on with passing a long term, solid highway bill. I’m going to be working as well as I can to accomplish that.

Senator Max Baucus: Well, I think excellent. There’s no question in my mind it will get passed in the Senate.

But the real question is: how do we get a more sound transportation policy in this country. In the last several years, transportation bills have been short term extensions rather than solid, five or six year authorizations and that’s caused a real problem for states who are less able to budget, for highway contractors, less able to budget and know what to bid on, problems for a lot of people with jobs and ancillary businesses related to highway construction whether asphalt or aggregate or what not.

I’m going to be pushing strongly for a longer term transportation/highway bill, five years roughly, so people can plan, so people can predict the future, so states and those related to highway constructions are able to predict the future. And that’s one reason, I think the economy has stalled a little bit, that is unpredictability. It’s uncertainty. People are just uncertain what’s in store for them.

But the real question is: how do we get a more sound transportation policy in this country. In the last several years, transportation bills have been short term extensions rather than solid, five or six year authorizations and that’s caused a real problem for states…

We will pass some legislation to allow construction to continue at roughly the current rate for next year but that’s not a very good solution. A better solution is to, next year, get on with passing a long term, solid highway bill. I’m going to be working as well as I can to accomplish that.

Now I can’t predict the future with 100 percent clarity. We’re going to have a new Congress next year. A different political party is in majority in the House. The president is going to be up for re-election, things are going to get a little unpredictable. My goal is to avoid all that, be practical, pragmatic and let’s get working to get highway legislation passed and maybe an even more solid infrastructure bill passed.”

JY: The outgoing House Transportation and Infrastructure Committee Chairman Jim Oberstar has said one reason a long term bill has failed was because a funding mechanism…the deficit commission did suggest raising the fuel tax. Is that discussion even on the table given the mood in Congress to cut taxes?

MB: Well I think the more proper approach is to have a big debate on this question. That is, our country needs to know, and certainly Congress needs to know, what should our infrastructure, highway, transportation policy be? How robust? How strong should it be? In my view it should be fairly strong, fairly robust. But there are lots of different ways to finance highway and transportation spending. I think we need a debate. We need to air all this. This is what committee hearings are for. What lots of other forums are for. There are a lot of options. One is, for example, more bonding. Congress passed a program a couple of years ago called “Build America Bonds” for municipalities to develop infrastructure, primarily. And that took off. That was only to raise about $4 billion in financing but actually $150 billion in bonds have been issued. That is a way to finance infrastructure financing.

The gasoline tax does discriminate against rural states but there are many other proposals in that deficit commission report which also disadvantage rural states.

Gasoline taxes of course also should be on the table. Some talk about a national infrastructure bank. That should be looked at. Each idea has benefits and drawbacks. One of the problems with a national infrastructure bank, which some propose, most likely would be tilted very strongly toward urban areas at the expense of rural areas. But it’s a debate our country must and should have so we know what direction we’re moving, in what way, at what pace.”

JY: How do you balance rural versus urban interests for what seems to be a shrinking pot of money. You have rail and transit projects competing with funding for roads and bridges.

MB: Well, basically our founding fathers answered that question. When they set up a Congress of a House of Representation based on population and a Senate based upon states. That was the compromise. That was the balance and the role of a Senator clearly is to make sure his or her state is not discriminated against, is treated fairly. And I would say if there were not a United States Senate, and if all decisions were made solely on population, that we in Montana would be in a real world of hurt, as would other rural states.

Probably the Interstate highway program would stop at the Montana borders if we didn’t have a United States Senate and that’s true for other rural states. So House members fight, they want a formula, want a program, they think is fair. We in the Senate fight for a formula, a program, we think is fair. And 535 members of Congress—435 in the House, 100 in the Senate—collectively make that decision. It’s not easy. But we work together to try to find the right formula.

And I don’t want to make it sound like it’s purely a fight among states, each state wants its share of the pie. Rather we need a national program with national interests, national points of view. We do have an Interstate highway system, but in a way that doesn’t discriminate.”

JY: Senator I did want to get back to fuel taxes and rural versus urban, because when the deficit commission came out with its report one of your statements was you felt it would hurt rural states like Montana because of the 15-cent increase in fuel taxes. That’s why I go back to that. I guess what you’re saying is that it’s open for discussion.

One of the problems with a national infrastructure bank, which some propose, most likely would be tilted very strongly toward urban areas at the expense of rural areas.

MB: Well, the gasoline tax does discriminate against rural states but there are many other proposals in that deficit commission report which also disadvantage rural states. One is a recommendation for a reduction, big major cuts, in agricultural assistance programs. I say that’s disadvantageous and it is quite harmful, for a lot of reasons. But one is because our country is trying to negotiate trade negotiations under the World Trade Organization and currently other countries are unwilling to open up their markets to American agricultural exports to those countries. And if we were to unilaterally disarm and say, ‘Okay we’re going to cut our agricultural programs without getting a quid pro quo. Without getting a mutual open access in other countries we’re being very short sighted.’

Also in Montana we’re a veterans’ state. I think we have more veterans per capita than almost any other state in the nation, and those veterans cuts recommended in that commission report would also therefore hurt our state. But the main problem with the deficit reduction commission: it was all take it or leave it. I mean my gosh and there was no debate. And there was no open public debate.

JY: And certainly the Senate wants to weigh in.

MB: Absolutely. And in my experience that you take an idea, it may look good on the surface. Or a component of an idea might look good on the surface but the more you look into it you realize, ‘Hey, maybe it wasn’t quite so good after all. This wasn’t considered or that wasn’t considered.’ Or on the other hand it turns out to be better than you thought and often there’s a lot of ways to skin the cat. That is some of the objections that might be real surface, but somebody else might have an idea on how to change that recommendation that accommodates those who are proposing it as well as those who have problems. It’s just too much take it or leave it without any debate.”

JY: Senator I just want to wrap up and say again, timetable. So for states or cities like Billings that are looking at long range projects like the inner-beltloop or the Billings Bypass, probably for the time being are looking at a few months extension.

MB: I think for the time being it will probably be roughly a year. One year, but during that one year we’ve got to come up with a much more solid transportation bill.

JY: Just maintenance then?

MB: Yeah, well unfortunately. Well, no not just maintenance there’s going to be construction, new construction as well as maintenance. I say maintenance, yes, in the sense that we’re going to maintain the current program through the fiscal year, but maintenance technically means not only just maintenance, but new construction where it’s appropriate.”

JY: Well, Senator I hope you make it home soon for Christmas.

MB: (laughs) Believe me I’m trying to get home tomorrow but I’m going to have to come back here again, but I get home as much as I can. Thanks.