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Congress Struggles with Highway Program Legislation

July 17, 2015
"We have some tsunamis coming around the corner in transportation," says Transportation Secretary Anthony Foxx, expressing his frustration over the difficulties in approving long-term transportation funding.

When they witness congressional wrangling over the highway program, “people in America must wonder if Congress can run a two-car parade,” cracked Sen. Ron Wyden (D-OR), ranking minority member of the Senate Finance Committee on July 16 at the Association of Road and Transportation Builders P3 Conference in Washington, D.C.

Following his brief remarks Wyden rushed back to Capitol Hill to take part in those same negotiations, which are expected to continue over the weekend.

With the most recent highway program extension to end July 31, the House of Representatives stole a march on the Senate July 13 when it passed legislation to continue the extension for another five months, including $8 billion in funding.

Before the House action took place, the Senate Environment and Public Works (EPW) Committee unanimously approved a bill that would create a $275 billion, six-year program called the Developing a Reliable and Innovative Vision for the Economy (DRIVE) Act.

On July 15 the Senate Committee on Commerce, Science and Transportation also approved a separate six-year transportation bill, which includes a freight section dealing with multimodal freight planning and policy. However, that committee, led by chairman John Thune (R-SD), split their vote down party lines after Thuhe rejected Democrats’ calls to preserve rail safety measures.

Like Wyden, EPW Committee chairman James Inhofe (R-OK) took time out from the negotiations to speak briefly at the ARTBA meeting. Both he and ranking minority member Barbara Boxer (D-CA) co-authored the DRIVE Act, and expect to generate more bi-partisan support after getting their committee to vote unanimously for it.

Inhofe expressed optimism that Senate negotiations with the House over its bill, which has headed to the Senate for approval, would eventually yield a multi-year program similar to that embodied in the DRIVE Act, which is supported by ARTBA and 30 other associations and unions.

Questioned following his speech by MH&L, Inhofe agreed that a motivating factor for legislators to move quickly should be the knowledge that no major highway bill has passed during an election year, meaning if they pass the five-month extension the next shot Congress will have at creating a multi-year program will be in 2017.

Inhofe also told the ARTBA members the very nature of the short-term extensions increase the costs of projects by 30% and make it impossible to move ahead on large-scale projects, such as major bridges.

‘Tsunamis Coming Around the Corner’

Transportation Secretary Anthony Foxx, who spoke at the same meeting, shares Inhofe’s view that the nation can’t afford to put off creating a long-term program. “We have some tsunamis coming around the corner in transportation,” he said.

Foxx cited projections of substantial population growth and a 65% increase in truck traffic over the next 30 years and declared that the U.S. needs nothing less than a $1 trillion infrastructure investment between now and 2020.

Foxx pointed out that the 34 extensions passed over the past six years have created annual shortfalls of $15 billion, and that programs crafted by legislators to get us back to previous levels are not enough. “We need $15 to $25 billion more a year just to stay even,” Foxx said.

Asked about the nation’s freight needs, he said we also need to tackle those projects and invest quickly to keep up with competitor nations like China that now boast better infrastructures. “We have an opportunity to occupy the field on freight, but we can’t do that with a system that is falling apart.”

Part of our response, Foxx said, should be creating a program to meet our freight needs that would function similarly to the TIGER grant program, and make sure that it doesn’t just focus on infrastructure near individual ports, and instead focus on larger scale, multi-state projects. “We want to encourage states to work together in building a system that is not just a patchwork,” he said.

Of course, the lingering question policymakers have been unable to solve is where can we find the necessary funding for all this? President Obama has said he will veto any bill containing fuel tax increases, and House Speaker John Boehner (R-OH) and other GOP leaders have ruled out a fuel tax increase as well.

Beg, Borrow and Steal?

One proposal that originated in the House last year and which has gained approval by the Administration would use repatriated overseas profits from U.S. companies. The drawback is that the changes sought would supply enough funding for a single multiyear program. After that ran out, new funding sources would need to be identified.

Another drawback is Congress would need to consider implementing this mechanism at the same time other tax reform proposals will be taken up early in the next year—hence the House choosing to limit its extension bill to no more than five-months.

To fund the five-month extension, the House bill would revise the tax code to force mortgage companies to obtain more financial information from borrowers and reduce inaccurate reporting, and would reword the statute of limitations for reassessing certain tax returns. The bill also would adopt new bookkeeping procedures for the Department of Transportation in what sounds like an elaborate bureaucratic shell game that generates no real revenue.

Perhaps the most intriguing funding has come from Wyden, who along with Sen. John Hoeven (R-ND) introduced what they called the Move America Act. This would deploy a combination of bonds and credits to fund infrastructure needs, not just for one multi-year cycle, but permanently eliminating any need for reauthorization.

This would generate $226 billion over 10 years, more than any fuel tax or corporate profit repatriation could bring in, Wyden claims. Of that total, $180 billion would be raised through bonds like those issued under the similar Build America program that was adopted in 2005. Another $45 billion would be in credits that could be used by public-private partnerships (the “3P” of the ARTBA meeting), which include toll projects like HOT lanes.

At the time of Wyden’s speech, however, no one else in Congress or the Administration had chosen to bless his proposal with agreement.

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