Transportation advocates cheered the $478 billion infrastructure spending bill that was released on Monday by the Obama administration, saying it would prevent an interruption in summer construction projects across the country.

“As states begin springtime road construction projects, AAA is pleased that Secretary Foxx and President Obama have put forward a blueprint for improving the nation’s roads and bridges,” AAA Auto Club CEO Bob Darbelnet said in a statement. “This transportation and infrastructure proposal promises to keep America globally competitive in a rapidly changing world.” 

The administration’s proposal calls for spending nearly $80 billion per year on the boosting the nation’s infrastructure, which would be an approximately $30 billion annual increase over the federal government’s current level of transportation spending. 

{mosads}The proposal relies on funding it says can be drawn from taxing corporate overseas profits. The proposal, known as “repatriation,” would require companies to bring back earnings to the United States at a 14 percent tax rate, generating an estimated $238 billion in revenue for the government that could be used to pay for infrastructure improvements. 

The measure is intended to address a transportation funding shortfall that is estimated to be about $16 billion per year. 

The traditional source of transportation funding has been the 18.4-cents-per-gallon federal gas tax that was established in the 1930s. The tax has not been increased since 1993, and improvements in car fuel efficiency have greatly sapped its purchasing power in recent years. 

The federal government typically spends about $50 billion per year on transportation projects, but the gas tax only brings in $34 billion.

Lawmakers have turned to other areas of the federal budget in recent years to close the gap, but transportation advocates said the patches make it difficult for states to plan long-term construction projects that are badly needed.

Darbelnet said Monday afternoon that the Obama administration’s proposal was “commendable,” but that he would prefer to see a gas tax increase included in the proposal because that would be a more sustainable long-term source of infrastructure funding. 

“Repatriation of corporate overseas profits might provide an infusion of money for construction and repairs, but it’s a temporary solution that does not solve our funding crisis,” he said. “AAA continues to believe that increasing the federal gas tax is the most effective and sustainable way to pay for roads and bridges in the near term, provided the additional funds are invested in improvements that ease congestion and increase safety.” 

Other transportation supporters said the repatriation plan is the most viable funding option that can win support from lawmakers this year. 

“America’s aging infrastructure is a big problem that needs a big solution,” said Rep. John Delaney (D-Md.), who introduced a similar proposal in the House earlier this year. 

“With time running out on the Highway Trust Fund, pro-growth international tax reform is the funding solution we need,” Delaney continued. “Rebuilding America’s infrastructure should be our top economic priority. New infrastructure projects will create good-paying middle-class jobs, make our businesses more competitive and improve public safety. Republicans and Democrats, Congress and the White House, should work together to get this done.”

Delaney’s transportation bill proposal called for taxing overseas profits at an 8.75 percent rate.  

Tags Gas Tax Highway bill Highway Trust Fund MAP-21 Reauthorization
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