A Senate panel yesterday unveiled bipartisan legislation that would authorize six years of U.S. highway programs, acting with construction projects at risk of slowing months before the November congressional elections.
The bill drafted by Senate Environment and Public Works Committee Chairman Barbara Boxer and other members would provide the same amount of money each year as in the current two-year, $105 billion legislation expiring in September, plus inflation. It is silent on the central issue of how to fund projects, a matter being left until later for congressional tax-writers and that threatens the proposal’s chances of making it into law.
House Transportation and Infrastructure Committee Chairman Bill Shuster, a Pennsylvania Republican, has yet to advance a companion proposal in that chamber.
Companies including Caterpillar Inc. (CAT), United Parcel Service Inc. (UPS) and Honeywell International Inc. (HON) are pushing for a long-term bill, after a 2012 drive on legislation collapsed in a dispute over funding and resulted in the current two-year law that expires at the end of September.
There is great disunity in Congress over how pay for a long-term bill, something Foxx said is discouraging given the public’s frustration with aging roads and bridges, which he experienced first-hand during a recent bus tour to cities throughout the nation to sell the administration’s plan.
“This is a big problem for the country and we’ve got to deal with it,” he said.
Tax Repatriation
Temporarily boosting U.S. taxes on companies’ overseas earnings is the most feasible way to provide the additional funding needed to rebuild aging highways and mass transit systems, Transportation Secretary Anthony Foxx said.
Other ideas being considered are falling flat and time is running out to replenish the Highway Trust Fund this year, Foxx said at a Bloomberg Government event in Washington today. Proposals to increase the 18.4-cent-per-gallon gas tax or other fees on drivers can’t clear Congress anytime soon, Foxx said.
President Barack Obama proposed a four-year, $302 billion bill that would raise $150 billion through taxes on overseas earnings and by closing loopholes that would normally let companies defer those obligations. Gasoline and diesel-fuel taxes haven’t kept pace with new projects and the Highway Trust Fund may not be able to meet its financial obligations as early as July, according to the Transportation Department.
“Right now our proposal is the best way to thread the needle and get something done,” Foxx said.
Seeking to accelerate the debate, Obama is scheduled to travel tomorrow to New York to discuss U.S. infrastructure needs near the 58-year-old Tappan Zee Bridge, which was designed to last just 50 years and is scheduled for a $3.9 billion replacement.
House Ways and Means Committee Chairman Dave Camp, a Michigan Republican, joins Obama in advocating tax repatriation as a means of funding infrastructure. Yet his counterpart in the Senate, Finance Committee Chairman Ron Wyden, an Oregon Democrat, said he favors a gas-tax increase and also wants to examine ideas that include resurrecting the Build America Bonds program created under Obama’s 2009 economic stimulus measure.
Senator Orrin Hatch of Utah, the finance committee’s top Republican, said he wants to see a method of financing that retains the current user-pays approach and said he also wants to examine ways to cut some wasteful spending.
Empty Coffers
The Transportation Department has said the Highway Trust Fund is projected to dip below the critical level of $4 billion as soon as July. That could cause a slowdown in reimbursements to states and a halt in some construction work. It’s on track to fall below $1 billion by October, he has said.
As many as 700,000 jobs would be lost over a year as the trust fund starts to reach the point where it can’t pay its bills, and that about 112,000 roadway projects and 5,600 transit projects could be delayed or halted, according to the Obama administration.
“The moment is dire,” Foxx said. The trust fund “is quickly running toward insolvency.”
Both Wyden and Camp say they’re seeking a long-term funding solution, while also considering some kind of stopgap patch to buy more time this year. In the past, that’s been accomplished with a short-term infusion from the government’s general fund.
To read the full article at Bloomberg.com, click here.
To contact the reporter on this story: Laura Litvan in Washington at [email protected]
