White House unveils $478B highway bill

The Obama administration is sending a six year, $478 billion highway bill to Congress with lawmakers struggling to beat a May 31 deadline to renew federal infrastructure spending. 

The measure is an update of the Grow America Act, a transportation bill the Obama administration previously sent to Congress. Lawmakers, though, largely ignored that proposal, instead opting for a temporary extension of highway spending that is set to expire in the spring.  

Transportation Secretary Anthony Foxx pitched the bill as a solution to a transportation funding problem that has bedeviled lawmakers for several years.

{mosads}”All over the country, I hear the same account: the need to repair and expand our surface transportation system has never been greater, and yet federal transportation funding has never been in such short supply,” Foxx said in a statement. 

“Our proposal provides a level of funding and also funding certainty that our partners need and deserve,” he continued. “This is an opportunity to break away from 10 years of flat funding, not to mention these past six years in which Congress has funded transportation by passing 32 short-term measures.”

The proposal from Foxx comes as state transportation officials have said they’ve already begun to prepare for a construction shutdown if Congress is unable to reach an agreement on extending the federal government’s transportation funding. 

The Department of Transportation has said that it will have to stop making payments to state governments for construction projects if Congress allows its Highway Trust Fund to run out of money. 

Lawmakers in both parties have expressed a desire to avoid a transportation-funding shutdown, but there is no consensus on how to pay for extending the trust fund.

The traditional source of transportation funding has been the 18.4 cents per gallon federal gas tax that was established in the 1930s. The tax has not been increased since 1993, and improvements in car fuel efficiency have greatly sapped its purchasing power in recent years. 

The federal government typically spends about $50 billion per year on transportation projects, but the gas tax only brings in $34 billion.

Lawmakers have turned to other areas of the federal budget in recent years to close the $16 billion-per-year gap, but Foxx and other advocates said the patches make it difficult for states to plan long-term construction projects that are badly needed.

The Obama administration proposal would mostly be paid for with revenue from taxing corporate overseas profits. The proposal, known as “repatriation,” would require companies to bring back earnings to the United States at a 14 percent tax rate, generating an estimated $238 billion in revenue for the government that could be used to pay for infrastructure improvements, officials said.

Republicans have said they would be open to the idea of using repatriated funds to pay for a transportation funding extension, but have criticized the Obama administration’s proposal for making the payments mandatory instead of voluntary.

Foxx said Monday the potential agreement on a funding mechanism for the transportation bill was promising, even as the May 31 deadline is quickly approaching. 

“It is clear to me that transportation is still a bipartisan issue, and I am really encouraged to see members of both parties working to get something done,” Foxx said.

“During these next two months, though, all of us who work in Washington need to be relentless in trying to get to ‘yes’ on a bill that is truly transformative and that brings the country together,” he continued. “And frankly, governors and state officials as well as mayors and local officials all over the country need to continue being relentless, too, by continuing to raise their voices in support of a transportation bill that meets both their immediate and long-term needs.” 

Transportation advocates have pushed for an increase in the gas tax to solve the infrastructure funding problem, but lawmakers have been reluctant to ask drivers to pay more at the pump to help finance road projects.

Conservative groups say they would consider a gas tax hike a tax increase, leading most Republicans to oppose the proposal. 

Transportation advocates say that a shutdown would cost the nation thousands of jobs because May is typically the beginning of the busy summer construction period.