President Obama called for Congress to pass a “bipartisan infrastructure plan” in his State of the Union address but stopped short of calling for an increase in the federal gas tax to help pay for it.
“21st century businesses need 21st century infrastructure — modern ports, stronger bridges, faster trains and the fastest Internet. Democrats and Republicans used to agree on this,” he said, criticizing Republicans for focusing more on approving the controversial Keystone XL oil pipeline.
“So let’s set our sights higher than a single oil pipeline," Obama continued. "Let’s pass a bipartisan infrastructure plan that could create more than 30 times as many jobs per year, and make this country stronger for decades to come.”
Obama stuck to his previous proposals of using savings from tax reform to pay for transportation projects, however.
“Let’s close loopholes so we stop rewarding companies that keep profits abroad, and reward those that invest in America,” he said. “Let’s use those savings to rebuild our infrastructure and make it more attractive for companies to bring jobs home.”
Obama’s corporate tax reform proposals have gone nowhere on Capitol Hill, but he pitched them as a solution to a transportation funding shortfall that is estimated to be about $16 billion per year as gas tax revenues have struggled to keep pace with more fuel efficient cars.
“The truth is, when it comes to issues like infrastructure and basic research, I know there’s bipartisan support in this chamber,” he said. “Members of both parties have told me so. Where we too often run onto the rocks is how to pay for these investments."
At least one Republican lawmaker, Sen. Kelly Ayotte (R-N.H.), indicated after Obama's remarks that there is a chance for lawmakers to compromise on transportation spending this year, although she did not identify a specific funding source for infrastructure project either.
“Based on POTUS speech, I believe there's opportunity for bipartisan cooperation on strengthening our transportation infrastructure,” she tweeted.
Transportation advocates said earlier Tuesday that they did not expect Obama to embrace the idea of asking drivers to pay more at the pump to finance infrastructure projects, even as they continue to argue that it is the most equitable solution to the annual construction funding crunch.
"He has little to gain from mentioning it if he does not want to push it, and all indications are that he prefers corporate tax reform as a funding solution," Eno Center for Transportation President Joshua Schank told The Hill on Tuesday afternoon. "He won’t want to come out against it either, so best to just leave it out.”
The gas tax, which has not been increased since 1993, brings in about $34 billion per year. The federal government typically spends about $50 billion per year on road and transit projects, and transportation advocates have maintained that the larger figure is only enough to maintain the current state of the U.S. infrastructure network.
Major road and transit improvements will require a higher annual funding level, they argue, which would result in an even higher infrastructure budget without an infusion of cash from a source like the gas tax.
Congress has turned to other areas of the federal budget to close the transportation funding gap in recent years, but advocates have argued that the temporary solutions have made conditions worse because they prevent state and local governments from planning long-term construction projects.
Transportation advocates in Washington stressed the need for a new federal highway bill, noting the current funding, which was passed last summer, is set to expire in the spring.
"Both the president and Republicans in Congress have talked about this as a potential area of agreement, and we’ll closely watch both tonight for indications as to how they would meet our infrastructure needs," Association of Equipment Manufacturers spokesman Michael O'Brien told The Hill in an email. "Time is of the essence for both the administration and Republican leaders to offer more detailed plans and fewer talking points with the Highway Trust Fund’s deadline approaching at the end of May."
-This story was updated with new information at 11:29 p.m.