New hope for deal on infrastructure funds

Republicans are indicating after President Obama’s State of the Union address that they are open to compromising with the president on increasing U.S. transportation funding, although neither side has offered specifics on how they would pay for new construction projects. 

Obama called several times on Tuesday night for Congress to pass a “bipartisan infrastructure plan,” although he stopped short of calling for an increase in the federal gas tax, which has been sought by many transportation advocates to help pay for it. 

House Transportation Committee Chairman Bill Shuster (R-Pa.), who has opposed prior efforts to increase the gas tax, said Republicans might be able to find agreement with Obama on infrastructure funding, even though they disagree with almost everything else the president laid out during his address. 

{mosads}“While I strongly disagree with his core policies, I do believe there is an opportunity for both parties to find common ground on issues to strengthen our nation’s economy, such as infrastructure,” Shuster said in a statement after Obama concluded his remarks. 

“I believe that it is imperative that we repair our crumbling infrastructure through fiscally responsible legislation,” Shuster continued. “As chairman of the Transportation and Infrastructure Committee, I am working to pass a surface transportation bill that makes investments in our nation’s roads and bridges to keep America competitive in a global economy.” 

GOP leaders in the Senate also spotlighted transportation funding as a potential area of agreement in the new era of even more divided government that follows Republicans taking control of both chambers of Congress this month for the first time since 2006. 

“Based on POTUS speech, I believe there’s opportunity for bipartisan cooperation on strengthening our transportation infrastructure,” Sen. Kelly Ayotte (R-N.H.) tweeted after Obama’s speech. 

For all the happy transportation talk from both sides of the aisle on Tuesday night, neither party has identified a specific funding source for infrastructure projects that has not already been shot down by the other side. 

Transportation advocates have pushed for an increase in the 18.4 cent-per-gallon tax to help pay for infrastructure projects, and the idea has picked up some steam on Capitol Hill, as gas prices have declined sharply in recent months. 

Obama has opposed asking drivers to pay more at the pump to help pay for transportation projects, although infrastructure advocates believe he privately supports the proposal. 

The president stuck to his previous suggestion of closing using savings from tax reform to pay for transportation projects in Tuesday’s speech, however. 

“Let’s close loopholes so we stop rewarding companies that keep profits abroad, and reward those that invest in America,” he said. “Let’s use those savings to rebuild our infrastructure and make it more attractive for companies to bring jobs home.” 

Obama’s corporate tax reform proposals have gone nowhere on Capitol Hill, but he pitched them as a solution to a transportation funding shortfall that is estimated to be about $16 billion per year, as gas tax revenues have struggled to keep pace with more fuel efficient cars. 

Republicans who will play a role in crafting any transportation bill later this year criticized Obama’s tax proposals as old-fashioned, tax-and-spend ideas that have been offered for years by Democrats on Capitol Hill. 

“America’s new Congress is focused on a reform agenda to fight for the middle class with policies to help create jobs, increase wages, and lower health care and energy costs,” Sen. John Thune (R-S.D) — who is the new chairman of the Senate Commerce, Science and Transportation Committee — said in a statement after Obama’s speech. 

“The president laid out an agenda of top-down policies of the past to tax, spend, and regulate,” Thune continued. “We believe in tapping into the potential of the American people, not the government, and we hope the president will finally join us.”

The gas tax, which predates the development of the Interstate Highway System, has been the traditional source for transportation projects since its inception in the 1930s.

The tax, which has not been increased since 1993, brings in about $34 billion per year. The federal government typically spends about $50 billion per year on road and transit projects, and transportation advocates have maintained that the larger figure is only enough to maintain the current state of the U.S. infrastructure network. 

Major road and transit improvements will require a higher annual funding level, they argue, which would result in an even higher infrastructure budget without an infusion of cash from a source like the gas tax. 

Obama said Tuesday night that he thought bipartisan agreement on transportation funding was possible, although he steered clear of the debate about raising the gas tax. 

“The truth is, when it comes to issues like infrastructure and basic research, I know there’s bipartisan support in this chamber,” the president said. “Members of both parties have told me so. Where we too often run onto the rocks is how to pay for these investments.”