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House GOP bill would tie infrastructure spending to energy production
House Republicans plan to pass a bill by year’s end that would tie new infrastructure funding to federal revenue generated from an expansion of domestic energy production, Speaker John Boehner (R-Ohio) announced Thursday.
Dubbing it the “opposite of stimulus,” Boehner said the new energy production plan would provide “a new devoted revenue stream” that could pay for the kind of infrastructure spending that President Obama is demanding as part of his jobs package.
Boehner said the legislation would include reforms to the federal infrastructure funding process, speeding up approvals and ensuring that taxpayer money is going to “real projects.”
“This is, I think, the opposite of stimulus, by linking infrastructure to energy reform and permanently removing barriers to job growth instead of just spending money on short-term fixes,” the Speaker told reporters in a rare roundtable briefing in his office. “The president says he wants more money for infrastructure and he says he supports more American-made energy, so I hope he will work with us on this.
“This is a new devoted revenue stream,” he added. “As American-made energy production increases, so too does the revenue from infrastructure projects.”
Boehner said the bill would be introduced in the next couple of weeks, once the details are finalized. Aides said the House committees of jurisdiction would set the revenue levels in the bill and decide what areas to open for drilling.
The Speaker had initially floated the idea in a speech to the Economic Club of Washington in September. He made the announcement Thursday, hours before the Senate blocked competing Democratic and Republican infrastructure bills.
The Democratic bill, modeled on an element of Obama’s job proposal, included $50 billion in infrastructure spending and $10 billion to seed a new infrastructure bank.
Republicans have condemned the proposal as more failed stimulus spending, and have warned that creating an infrastructure bank could lead to the kind of problems seen in the federal mortgage lenders Fannie Mae and Freddie Mac.
The House and Senate have been working on a long-term reauthorization of a surface transportation bill, which could form the basis of Boehner’s plan. Republicans have already called for specific process reforms to infrastructure funding, such as eliminating a requirement that states set aside 10 percent of federal surface transportation funds for “museums, education and preservation.”
“I would expect [the legislation] would include reforms to ensure that infrastructure money is spent on real projects instead of being spent on frivolous projects where that money has sometimes been diverted over the decades for all kinds of purposes,” Boehner said, citing funds used for baseball parks and parking garages.
The energy half of Boehner’s plan could face immediate Senate hurdles.
Republicans and conservative and oil-state Democrats back large-scale expansions of oil drilling, but the majority of Senate Democrats oppose it.
The GOP-led House passed several bills this year to widen drilling and knock down what advocates call regulatory barriers. That legislation includes measure that would mandate a massive expansion of offshore oil-and-gas leasing, which passed in May on a 243-179 vote, with 21 Democrats in support.
Sen. Robert Menendez (D-N.J.), a liberal offshore-drilling foe, said he did not believe that steering energy revenues into infrastructure would give wider drilling more traction in the upper chamber.
The plan could also face criticism from drilling advocates who have their own ideas about where to direct the money. Sen. Mary Landrieu (D-La.) is a strong supporter of expanded offshore drilling, but argues that coastal states with energy development off their shores should receive a substantial share of leasing and royalty money.
“That drilling would have to have provisions for revenue-sharing for the local counties and host states, including coastal counties and states,” Landrieu said in the Capitol on Thursday.
Sen. Lisa Murkowski (Alaska), the top Republican on the Senate Energy and Natural Resources Committee, is also a strong revenue-sharing advocate.
Louisiana and some other Gulf of Mexico states won oil-and-gas revenue-sharing in a 2006 law, ensuring a 37.5 percent cut from certain leases, but the bulk of it does not begin until 2016. Landrieu has said the program should be sped up.
Boehner spokesman Michael Steel said it’s too early to say whether coastal revenue-sharing could be part of the package.
“That kind of detail will be worked out with our members and chairmen of the relevant committees in the weeks ahead,” he said in an email.
— Originally posted at 2:32 p.m. and updated at 8:28 p.m.
