President Obama signed into a law a five-year, $305 billion highway bill on Friday, with just hours to spare before the scheduled expiration of the nation's road and transit spending.
Funding had been set to expire at midnight.
The new law, paid for with gas tax revenue and a package of $70 billion in offsets from other areas of the federal budget, calls for spending approximately $205 billion on highways and $48 billion on transit projects over the next five years. It also reauthorizes the controversial Export-Import Bank’s expired charter until 2019.
The measure is the first long-term national transportation spending package in a decade. It follows a string of temporary patches that began before Obama entered office.
Ending the pattern of short stopgap funding fixes has been a priority this year for both the Obama administration and Republican leaders in Congress.
Obama has railed against short-term patches, and he noted Friday that the highway bill that he received from lawmakers fell short of a six-year, $478 billion proposal he sent to Congress earlier this year.
"This bill is not perfect, but it is a commonsense compromise, and an important first step in the right direction," Obama said in a statement ahead of the bill signing on Friday.
"I look forward to signing this bill right away, so that we can put Americans to work rebuilding our crumbling roads, bridges, and transit systems, reauthorize the Export-Import Bank that helps our companies compete around the world, and give local and state governments and employers the certainty they need to invest and hire for the long term," he continued.
Congress has not passed a transportation funding bill that lasts longer than two years since 2005, much to the chagrin of infrastructure advocates in Washington.
Obama proposal relied largely on revenue from taxing corporate profits that are stored overseas to supplement gas tax revenue to pay for transportation projects. Lawmakers largely ignored the administration's plan, turning instead to other areas of the federal budget to pay for the measure they sent to Obama this week.
The new law, dubbed the Fixing America’s Surface Transportation Act, or the FAST Act, formally reauthorizes the collection of the 18.4 cents per gallon gas tax that is typically used to pay for transportation projects, and also includes $70 billion in “pay-fors” to close a $16 billion deficit in annual transportation funding that has developed as U.S. cars have become more fuel-efficient.
The gas tax has been the traditional source for transportation funding since its inception in the 1930s, but lawmakers have resisted increasing the amount that drivers pay. The federal government typically spends about $50 billion per year on transportation projects; the gas tax only brings in $34 billion annually.
Congress has been struggling for years to come up with a way to pay for a long-term transportation funding extension without raising the gas tax. The offsets in the agreement that was announced on Tuesday include changes to custom fees and passport rules for applicants who have delinquent taxes.
Additional mechanisms include contracting out some tax collection services to private companies — over the objection of unions that represent federal IRS workers — and tapping dividends from the Federal Reserve Bank.
Obama said he will keep pushing Congress to come up with more sustainable way to pay for transportation projects than the patchwork of funding mechanisms lawmakers turned to pay for the measure he signed into law on Friday.
"As we applaud the kind of bipartisan compromise that was reached last night, we should also recognize that we still have work to do," he said.
"Congress should pass a bill like the GROW AMERICA Act I’ve proposed in the past, one that supports even more jobs and invests even more in our roads and highways than the bill passed last night so we can meet our country’s infrastructure needs," Obama concluded.