UPS Freight President Rich McArdle Optimistic Infrastructure Bill Will Advance

WASHINGTON — President Donald Trump and the current divided Congress create an opportunity for advancing a long-term infrastructure policy measure in the near future, UPS Freight President Rich McArdle said Feb. 5.

“If I rated it Congress over Congress, there’s more optimism now than there was in the prior congresses,” said McArdle during an interview with Transport Topics. “If I had to tell you from a leadership standpoint, I’m much more optimistic about leadership within [Washington] D.C. both at the White House, as well as on the Hill, to get things done this year.”

Among the priorities for policymakers to consider when they craft the legislation should be ensuring the long-term solvency of the federal Highway Trust Fund account. A fuel tax increase would provide immediate funds into the account to help it achieve its purpose of operating without outside assistance, McArdle added.

STATE OF THE UNION: Trump calls infrastructure funding 'a necessity'

Several top Democrats and other freight stakeholders continue to advocate for a user-fee increase. Most congressional Republicans, however, continue to oppose the approach and turn to alternatives such as a fee for miles traveled, and public-private partnerships to back infrastructure systems.

To opponents of an increase, McArdle said: “There are going to be opposing views but at the end of the day the cost of doing nothing is so much more than the cost of doing something.”

LIVE NOW: @UPS Freight President Rich McArdle and our Senior Executive VP Suzanne Clark (@SuzanneUSCC) discuss the critical importance of infrastructure investment at #investininfrastructure https://t.co/Q3xYm8Oak7 @UPSPolicy pic.twitter.com/IUzgDQcW2q — U.S. Chamber (@USChamber) February 5, 2019

The UPS leader is scheduled to address the House Transportation and Infrastructure committee on Feb. 7 on behalf of the U.S. Chamber of Commerce during a hearing to examine concerns related to the cost of inaction on infrastructure repairs.

Committee Chairman Peter DeFazio (D-Ore.), who said he intends to produce an infrastructure policy bill later this year, has yet to reveal most of the policy initiatives the bill would include.

House Transportation Chairman DeFazio tells reporters his committee will craft the first real 21st century transportation bill, that would address multimodal concerns and advance smart technologies pic.twitter.com/6Ve475amKc — Eugene Mulero (@eugenemulero) February 5, 2019

The chairman also remains supportive of an increase in user fees, which groups like the U.S. Chamber of Commerce has endorsed. However, he defers to his colleagues on the tax-writing Ways and Means Committee to determine how to restore the trust fund.

Support from the White House will be needed for a major infrastructure policy measure to advance in a divided Congress. DeFazio told reporters at an event the Chamber hosted Feb. 5, “I’m looking forward to partnering with the Chamber, getting the White House on board and then moving a bill through the House, as usual.”

Infrastructure Meter

How close are we to a deal on infrastructure funding? This week's Infrastructure Meter pegs it at 15%, up slightly from last week's 10%. See the reason for the slight uptick in optimism in this week's Capitol Agenda. 

Chamber president Tom Donohue pledged to provide his group’s full support to members of Congress who would back an increase.

“After 26 years the user fee ought to be increased,” Donohue added. “The reality is that we can hear all of the objections and all of the political machinations ‘cause we’re going to have an election. We have an election every two years.”

The White House and Congress have yet to consider an infrastructure bill. Trump had indicated this year’s policy portfolio would include infrastructure, yet his staff has not unveiled a proposal.

The Highway Trust Fund, which assists states with maintenance and construction projects, is projected to be insolvent in several years. Revenue from the 24.4-cents-per-gallon diesel tax, and 18.4-cents-per-gallon gas tax, is no longer sufficient to sustain the fund. The federal fuel tax rate was last increased in 1993. Over the years, Congress has supplemented the account with outside funds.

Citing congressional inaction on the trust fund, more than half of the states recently raised fuel taxes as a way of boosting dollars for transportation accounts.

UPS Inc. is the top company on Transport Topics’ Top 100 list of the largest for-hire carriers in North America.