House Passes Highway Patch
This story appears in the July 21 print edition of Transport Topics.
The Republican-led House of Representatives on July 15 easily passed legislation that would rescue a cash-strapped federal highway account through May.
Two days later, President Obama, who has chided Congress for not passing a long-term funding bill, announced an initiative to help state and local governments access private capital for large infrastructure projects.
The House bill, which passed 367-55, would approve about $11 billion for the Highway Trust Fund, an account the U.S. Department of Transportation said is poised to run out of money as early as next month.
The bill would allow the transfer of $1 billion to the trust fund from the Leaking Underground Storage Tank Trust Fund. It also would approve the extension of customs fees until 2024 and rely on the accounting practice known as “pension smoothing,” which allows companies to put less into their pension accounts, and thus pay more in taxes.
Without the short-term boost, “thousands of transportation projects and hundreds of thousands of jobs across the country will be at risk,” said House Transportation and Infrastructure Chairman Bill Shuster (R-Pa.), the bill’s co-sponsor.
Speaking July 17 near an interstate bridge in Delaware that was closed last month for structural repairs, Obama said that while he supports the short-term bill, he would rather Congress take up multiyear transportation legislation.
“If that’s all Congress does, then we’re going to have the same kind of funding crisis nine months from now. And that’s not normally how you fund infrastructure, because you got to plan it. You got to think about how are we helping folks and how are we helping states and cities and municipalities,” Obama said.
At the event at the Port of Wilmington, he also signed off on an initiative establishing an office within the Transportation Department that would facilitate access to private capital for large-scale government projects. The office would seek to improve credit programs for transportation agencies, and it would offer technical assistance for managing public-private partnerships.
“We’re taking steps on our own — still hoping that Congress actually does something,” Obama said.
The initiative will feature an infrastructure investment summit hosted by the Treasury Department on Sept. 9.
The House bill heads to the Senate, where Majority Leader Harry Reid (D-Nev.) told reporters there is a chance he would call up an alternative bill by Sen. Barbara Boxer (D-Calif.) that would authorize highway programs through December, or a Senate bill that addresses the trust fund’s looming shortfall.
Reid also said he has met with Senate Republicans to “figure out what they want to do” regarding possible amendments to any transportation legislation.
The House legislation advanced despite calls from Democratic leaders urging colleagues to pass a long-term funding fix for transportation programs, and conservative groups who urged Republicans to oppose the legislation.
Forty-five Republicans and 10 Democrats opposed the legislation. Rep. Earl Blumenauer (D-Ore.), who voted against the bill, had pressed his colleagues to approve a long-term highway funding measure prior to the end of the year.
“This is a sad moment,” Blumenauer said. “We will be no better off next May.”
Ways and Means Chairman Dave Camp (R-Mich.), a co-sponsor of the House bill, countered: “Americans across the country deserve to see less gridlock on the roads and from their elected representatives. These policies are straightforward and have a history of bipartisan, bicameral support,” said
While Democrats and Republicans agree on the need to rescue the trust fund before it runs out of money, key Senate Democrats appeared disappointed with the short-term proposals.
“After five years of short-term extensions, punting on our re-sponsibility to get this done for another year will hinder private-sector economic growth and job creation, and will likely continue a harmful cycle of short-term extensions indefinitely,” said Sen. Tom Carper (D-Del.).
Many times this year, Transportation Secretary Anthony Foxx has warned that an insolvent trust fund would prompt DOT to scale back reimbursements to states for large-scale construction projects. Foxx is scheduled to press Congress to approve highway funding during a speech in Washington on July 21.
The Highway Trust Fund’s road-building account relies on revenue from national diesel and gasoline taxes, and the rise of energy-efficient vehicles has cut into that source of funding. In recent years, Congress has opted to transfer funds from the Treasury to boost the highway account.
