House Ways and Means Committee Chairman Paul Ryan (R-Wis.) on Friday said lawmakers should pass a temporary extension of federal transportation spending that lasts until the end of the year.
The current transpiration funding measure is scheduled to expire on July 31, and lawmakers are struggling to come up with a way to pay for a long-term extension of the spending.
Ryan said Friday that lawmakers have no choice but pass a patch that lasts until the end of the year despite objections from the Obama administration and transportation advocates in Washington.
{mosads}”Our members want to do a long-term highway bill, but I think everybody realizes you can’t pass that in two weeks, so we’re going to have to do a patch,” he told reporters.
“I think through the end of the year is the smart way to do that,” Ryan continued. “We’ll produce that very soon and it will be done in a way I think that can easily get bipartisan support.”
Lawmakers are grappling with an infrastructure funding shortfall that is estimated to be about $16 billion per year, and they have not passed a transportation bill that lasts longer than two years in that span.
The 18.4 cents per gallon federal gas tax has been the main source of transportation funding for decades, but it has not been increased since 1993, and more fuel-efficient cars have sapped its buying power.
The federal government typically spends about $50 billion per year on transportation projects, but the gas tax only brings in approximately $34 billion annually.
The nonpartisan Congressional Budget Office has estimated it will take about $100 billion, in addition to the gas tax revenue, to pay for a six-year transportation funding bill like the one President Obama is proposing.
Lawmakers have turned to other areas of the federal budget to close the transportation funding gap in recent years, resulting in temporary fixes that critics have complained are preventing state and local governments from completing badly needed construction projects.
Transportation Secretary Anthony Foxx hinted this week that President Obama might veto a potential highway funding patch, saying “we’re quickly getting to the point where the value of another extension may be less than the value of breaking the cycle.”
Ryan said Friday that lawmakers share the Obama administration’s desire to produce a long-term transportation funding bill, but he added emphasized the need to prevent an interruption in the nation’s road and transit spending this month.
“Our goal in the House is to get a six-year highway bill,” he said. “We’re not going to be able to do that in two weeks, so we’re going to have to have a patch, and we anticipate moving on a patch as soon as possible.”
Ryan said he favors paying for a highway bill by using revenue from taxing offshore corporate profits, though only as part of a broader revamp of the international tax code.
The Obama administration has backed a plan that would tax overseas profits at a 14 percent rate, but Republicans have said the taxes should be collected at a lower rate and on a voluntary basis in the form of a “tax holiday” for companies that return profits to domestic banks.
Ryan said Friday that attaching highway funding to oversees tax collections could be the first step in a broader reform effort that has struggled to gain momentum on Capitol Hill.
“The way we tax American companies doing business overseas is killing American jobs,” he said. “It’s driving companies out of the U.S. It’s eroding our tax base. So if we don’t do something to become more competitive with the rest of the world, we’re going to see more and more of these diversions … and there won’t be much of a corporate tax base left to reform with. If only to protect the tax base to reform later, we think this is necessary.”
Ryan dismissed recent comments from Senate Majority Leader Mitch McConnell (R-Ky.), who expressed skepticism about the repatriation proposal.
“Mitch and I have the same long-term goals: We want comprehensive tax reform and we want a long-term highway bill,” he said. “They have their body to deal with, we have ours to deal with. We … think we should do a long-term highway bill and we think tax reform is the best way.”
Ryan did not specify how he plans to pay for his proposed temporary highway funding extension, saying only, “I think we’ll be able to put together a package that kind of innocuous, boring stuff that shouldn’t be a surprise to people.
“We’ll post it when we have it ready,” he said.