$305B highway bill taps Fed, oil reserves

$305B highway bill taps Fed, oil reserves

The $305 billion highway bill announced by lawmakers on Tuesday includes approximately $70 billion in revenue from areas other than the federal gas tax that is traditionally used to pay for transportation projects. 

The 1,300 page measure, which was unveiled days before a Friday deadline for renewing transportation funding, relies largely on revenue from reducing interest rates paid by the Federal Reserve to large banks, selling oil from the Strategic Petroleum Reserve that is used to prevent energy crises and increasing fees for customs processing. 

ADVERTISEMENT

The funding will be used to offset a transfer of about $70 billion into the Department of Transportation's Highway Trust Fund to close a gap that is estimated to be approximately $16 billion a year until 2020.   

Backers of the deal said Tuesday that the agreement "provides long-term certainty for states and local governments, and good reforms and improvements to the programs that sustain our roads, bridges, transit, and passenger rail system."

“This legislation is a vital investment in our country. A safe, efficient surface transportation network is fundamentally necessary to our quality of life and our economy," Sens. Jim InhofeJames (Jim) Mountain InhofeSenate panel advances Pentagon chief, Joint Chiefs chairman nominees Trump's pick to lead Pentagon glides through confirmation hearing Trump says US will not sell Turkey F-35s after Russian missile defense system purchase MORE (R-Okla.) and Barbara BoxerBarbara Levy BoxerOnly four Dem senators have endorsed 2020 candidates Hispanic civil rights icon endorses Harris for president California AG Becerra included in Bloomberg 50 list MORE (D-Calif.) and Reps. Bill ShusterWilliam (Bill) Franklin ShusterEx-GOP Rep. Roskam joins lobbying firm Anti-corruption group hits Congress for ignoring K Street, Capitol Hill 'revolving door' Republicans spend more than million at Trump properties MORE (R-Pa.) and Peter DeFazioPeter Anthony DeFazioThe House Democrats who voted to kill impeachment effort The Hill's Morning Report - Presented by Pass USMCA Coalition - Deadline approaches for 2020 Dems Dems eye big infrastructure package, with or without Trump MORE (D-Ore.) said in a joint statement. 

"We knew that reaching an agreement on this measure would be challenging, but every member of the conference committee was certainly up to the task," the lawmakers continued. "We appreciate their hard work in this effort, and we look forward to moving this measure forward and getting it signed into law.”

The agreement on the highway legislation comes as lawmakers are scrambling to beat a Dec. 4 deadline.

The proposal that was unveiled on Tuesday calls for taking $53.3 billion from the surplus of the Federal Reserve bank and $6.9 billion reducing the dividends that are paid to banks who are members of the Fed. Other funding sources in the measure include $6.2 billion from the sales of reserved oil, $5.188 billion from customs fees, and $2.4 billion from a move to require the IRS to use private tax collection companies. 

Congress has been grappling with the transportation funding shortfall since 2005, and they have not passed an infrastructure funding bill that lasts longer than two years during that span.  

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.

Transportation advocates have pushed for a gas tax increase to pay for a long-term transportation bill, but Republican leaders have ruled out a tax hike.

Congressional budget scorekeepers have estimated it would have taken about $100 billion, in addition to the gas tax revenue, to fully pay for a six-year transportation bill, which was the length that was originally sought by transportation advocates.