Obama sends Congress $302B transportation bill

 

President Obama on Tuesday sent Congress a legislative proposal for $302 billion in federal transportation funding in a bid to spur a broader debate about how best to pay for the nation's infrastructure. 

Obama’s plan has virtually no chance of being enacted, because it relies heavily on revenue from a corporate tax reform proposal that is strongly opposed by Republicans.

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But Transportation Secretary Anthony Foxx said the new legislation, which the administration has dubbed the “Grow America Act,” could jumpstart a conversation about how to avoid the looming bankruptcy in the trust fund that pays for transportation projects. The fund could run dry as early as August.

“Failing to act before the Highway Trust Fund runs out is unacceptable — and unaffordable,” Foxx said in a statement. “This proposal offers the kind of job creation and certainty that the American people want and deserve.”

The president’s proposal calls for a four-year extension of funding for federal road and transit funding before it expires in September.

The plan would authorize $75.5 billion in annual spending, which would be a $20 billion increase over current yearly funding levels. It would also close the $66 billion shortfall in the Highway Trust Fund.

The president is proposing to pay for the spending by generating some $150 billion in revenue from corporate tax reform — something Congress is unlikely to consider. Republican leaders in the House have signaled that even a tax reform plan from one of their own members, House Ways and Means Committee Chairman Dave Camp (R-Mich.), is a non-starter.

Nonetheless, the release of the plan was greeted with enthusiasm Tuesday because it was reversal from 2012, when Obama deferred to Congress on the funding levels for infrastructure and took heat from lawmakers for staying on the sidelines.

“Today’s proposal is one step in the right direction,” Sen. Jay Rockefeller (D-W. Va.), the chairman of the Senate’s transportation committee, said in a statement.

“I am pleased the administration proposed significant new funding to keep the country moving forward, and to also allocate resources to where our transportation system sorely needs them — such as moving freight and improving rail service,” Rockefeller continued.

But even Rockefeller, who has long been a supporter of Obama’s proposals to boost infrastructure funding, expressed uncertainty about the corporate tax reform proposal that is at the crux of the president's proposal.

“Finding ways to pay for this bill will not be easy,” he said. “The administration has proposed a number of new funding sources and I believe Congress needs to consider these, and every other option for increased infrastructure investment should be on the table. While there is no magic solution to our transportation problems, we need to come together — for the future prosperity and safety of this nation — and move beyond the status quo.”

Transportation advocates in Washington praised the administration for drafting a “concrete” funding proposal, even though the plan does not adopt an increase in the gas tax that has been pushed by the U.S. Chamber of Commerce and major labor unions.

“Having a concrete MAP-21 proposal from the administration is a positive step forward in the reauthorization process,” said Bruce Josten, the executive vice president for government affairs at the Chamber.

Josten said lawmakers would still likely have to consider alternative funding sources for transportation projects, even if they embrace the Obama administration's proposal.

“Putting forward a plan generates important debate and discussion and highlights the reality that as a country, we must look not only at our immediate need to ensure the solvency of the Highway Trust Fund but also at how we meet the economic needs of the country on a multi-modal basis in the long run,” Josten said.

Transportation advocates have clamored for a new transportation bill that lasts longer than the two years authorized in the Moving Ahead for Progress in the 21st Century (MAP-21) Act, which Congress passed in 2012. They say a longer-term bill is needed to give state and local governments more certainty when planning out infrastructure projects.

Lawmakers are grappling with how to close a shortfall in transportation funding that is projected to soon reach as high as $20 billion per year.

The traditional source for infrastructure funding has been the federal gas tax, currently at 18.4 cents per gallon. But the gas tax has not been increased since 1993, and receipts are now being far outpaced by infrastructure expenses.

Transportation advocates have pushed for an increase in the gas tax to a rate that would nearly double the amount of extra money drivers are charged at the pump, to 33 cents per gallon. Supporters say the increase would make up for the revenue that has been lost during a 20-year stagnation in the gas tax.

The Congressional Budget Office has projected that lawmakers will have to find an extra $100 billion in revenue, in addition to the approximately $34 billion that is expected to be brought in by the federal gas tax, to provide enough money to pay for a six-year transportation bill this year.

Advocates for expanded toll roads declared victory because Obama’s proposal included language that would lift a ban on states placing tolls on existing highway lanes to help supplement federal transportation funding.

Present law requires states to construct new lanes on highways that they want to add to tolls to, but Obama’s bill would allow states to apply to the Department of Transportation for approval to install tolls on existing roads.

International Bridge, Tunnel and Turnpike Association Executive Director Patrick Jones said the concession on adding tolls to existing roads was long overdue.

“In releasing their proposal today, Secretary Foxx and the Administration recognize the importance of giving states the maximum amount of flexibility to use all appropriate funding and financing tools to meet their 21st century funding challenges,” Jones said in a statement.

— This story was last updated at 4:26 p.m. 

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