White House backs House GOP highway fix

White House backs House GOP highway fix
© Getty Images

President Obama will sign an $8 billion highway patch that is being voted on Wednesday by the House, the White House said, despite an earlier veto hint by Transportation Secretary Anthony FoxxAnthony Renard FoxxBig Dem names show little interest in Senate Lyft sues New York over new driver minimum pay law Lyft confidentially files for IPO MORE.

House Republicans unveiled an approximately $8 billion highway patch Monday evening that would extend federal transportation spending until December as a July 31 deadline for expiration of the current highway bill looms large in Washington. 

Obama has complained bitterly about previous transportation funding patches, and Foxx said last week that he might tell the president to veto a quick fix this time, but White House officials said Wednesday that it is too important to prevent an interruption in the nation's infrastructure spending. 


"With surface transportation authorization expiring at the end of July, the unfortunate reality is that, due to inaction, Congress will need to pass a short-term extension of these authorities to keep Federal funding for the nation’s surface transportation system flowing," the White House said in a Statement of Administration Policy about the GOP patch. 

"While the country cannot continue to rely on short-term patches as an approach to funding the nation’s infrastructure, the administration supports passage of H.R. 3038 to give the House and Senate the necessary time to complete work on a long-term bill this year that increases investment to meet the nation's infrastructure needs," the statement continued. 

Lawmakers are scrambling to prevent an interruption in the nation's transportation spending because the Department of Transportation has said its Highway Trust Fund will dip below a mandatory critical level of $4 billion at the end of the month. The agency has said crossing that threshold will necessitate a cut-back on payments to state and local governments. 

GOP leaders in the House are proposing a package that relies on $3 billion worth of savings from Transportation Security Administration fees and $5 billion in tax compliance measures to road projects through Dec. 18. 

The Senate, meanwhile, has worked on a longer, six-year, $275 billion transportation funding measure, but lawmakers in the upper chamber have not yet revealed how their legislation would be paid for.

Congress has been grappling since 2005 with a transportation funding shortfall that is estimated to be about $16 billion per year, and lawmakers have not passed a transportation bill that lasts longer than two years during that span. 

Foxx told reporters last week that Obama was running out of patience with temporary transportation funding extensions that have been the norm for the last decade.

"I think we're quickly getting to the point where the value of another extension may be less than the value of breaking the cycle," he told reporters then.

The main source of transportation funding for decades has been revenue that is collected by the 18.4 cents-per-gallon federal gas tax. The tax has not been increased since 1993, however, and more fuel-efficient cars have sapped its buying power.

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

Lawmakers have turned to other areas of the federal budget to close the transportation funding gap in recent years, resulting in temporary fixes the White House said is preventing states from completing badly needed construction projects. 

"In recent decades, Congress routinely passed six-year surface transportation bills, providing much needed certainty to state and local governments," the White House said Wednesday. 

"In comparison, the current series of short-term patches creates significant uncertainty that makes it more difficult to plan and implement long-term investments," the administration's statement continued.  "At the same time, Congress has failed to increase investment in the Nation’s aging surface transportation infrastructure, leaving State and local governments without the resources they need to meet the demands of a growing economy and population." 

The non-partisan Congressional Budget Office has estimated it will take about $100 billion, in addition to the gas tax revenue, to pay for a six-year transportation funding bill.

The Obama administration has proposed a measure that calls for spending $478 billion over the next six years on the nation's roads and bridges, but lawmakers have largely ignored the suggestion. 

The Obama plan, known as the GROW AMERICA Act, would supplement gas tax revenue with a process known as "repatriation," which would tax corporate profits being held overseas at a 14 percent rate.

Republicans have said they are open to the president's repatriation idea, but they have said the taxes should be collected at a lower rate and on a voluntary basis in the form of a "tax holiday" for companies that return profits to domestic banks. 

Other transportation advocates are pushing for a gas tax increase to pay for a long-term transportation bill, but Republican lawmakers have ruled out a tax hike

The White House said Wednesday that Obama's plan is the most politically viable option for passing a long-term transportation bill in the near future. 

"In today's economy, to compete the nation must have a first-class transportation system that attracts first-class jobs and takes American businesses' goods all across the world," the administration said.  

"Such a system cannot be achieved without a long-term bill with increased levels of investment," the White House statement continued. "That is why the President has proposed the GROW AMERICA Act, which would provide robust funding for all modes of surface transportation, create jobs, streamline project approval processes, and implement innovative transportation policies to make better use of taxpayer dollars."