By Keith Laing
President Obama pushed lawmakers to approve new funding bills for the nation’s roads and ports by “this summer” during his State of the Union address on Tuesday night.
The call came during a portion of Obama’s speech discussing closing tax loopholes to pay for domestic improvements.
“Both Democrats and Republicans have argued that our tax code is riddled with wasteful, complicated loopholes that punish businesses investing here, and reward companies that keep profits abroad,” Obama said. “Let’s flip that equation. Let’s work together to close those loopholes, end those incentives to ship jobs overseas, and lower tax rates for businesses that create jobs here at home.”
The chambers are also in the early stages of considering a renewal of the current surface transportation bill, which authorizes the 18.4 cents-per-gallon federal gas tax that pays for most federal transportation projects.
There is an approximately $20 billion shortfall between the amount of revenue the gas tax brings and the $54 billion per year that is currently being spent by the federal government on road and transit projects.
Obama suggested on Tuesday night that lawmakers “take the money we save with this transition to tax reform to create jobs rebuilding our roads, upgrading our ports, unclogging our commutes — because in today’s global economy, first-class jobs gravitate to first-class infrastructure.
“We’ll need Congress to protect more than 3 million jobs by finishing transportation and waterways bills this summer,” he said. “But I will act on my own to slash bureaucracy and streamline the permitting process for key projects, so we can get more construction workers on the job as fast as possible.”
Republicans have criticized the Obama administration in the past for not offering specific ideas for new funding sources for transportation projects.
The Department of Transportation has projected that the highway trust fund will run out of money in September, if Congress does not appropriate new funding, but Transportation Secretary Anthony Foxx has offered few proposals beyond Obama’s tax loophole suggestion.
The transportation department has traditionally said it is deferring to lawmakers on appropriations approaches for infrastructure projects.
Transportation advocates said they were grateful for the spotlight Obama turned to infrastructure funding issues in his Tuesday speech, but they criticized his proposal for falling short on specific numbers.
“The president’s proposal for maintaining roads and bridges is well intentioned, but falls short of what is required because it does not provide a sustainable funding solution for the nation’s transportation problems,” AAA President Robert Darbelnet said in a statement. “AAA urges Congress and the administration to instead focus on options like increasing the gas tax because it is the most effective and fair way to fund transportation in the near term.”
Darbelnet said his organization was supporting a proposal by Rep. Earl Blumenauer (D-Ore.) to nearly double the federal gas tax to more than 30 cents-per-gallon.
“A gas tax increase would provide the necessary funds to improve our system, while also upholding the long-standing principle that those who use the roads should pay for their upkeep,” Darbelnet said. “Increasing the gas tax is deficit-neutral and would provide funding certainty for the program into the future.”
The federal gas tax has not been increased since 1993, and it has not been indexing to inflation. The result has been a widening shortfall in the Highway Trust Fund as Americans drive less often and cars achieve greater fuel efficiency.