Another Highway Funding Patch Put in Place

It's the 33rd time in more than six years that Congress has resorted to a temporary patch to keep transportation programs going.

📅   Tue May 26, 2015 - National Edition
JOAN LOWY - Associated Press



WASHINGTON (AP) - Congress has sent President Barack Obama a bill to keep highway and transit aid flowing to states for another two months and prevent shutdown of summer construction projects.

The Senate approved the bill by voice vote early Saturday; the measure passed the House earlier in the week. Authority to spend money from the federal Highway Trust Fund, which finances most aid to states, was due to expire May 31.

It’s the 33rd time in more than six years that Congress has resorted to a temporary patch to keep transportation programs going, 12 bills specific to highway and transit programs and 21 other more general measures designed to keep the Transportation Department and other government agencies open. The repeated fixes are a reflection of lawmakers’ continuing lack of consensus on how to solve the nation’s infrastructure financing woes.

While Obama is expected to sign the measure, White House spokesman Josh Earnest urged lawmakers to use the two months to negotiate a long-term bill

”After all, you hear regularly from Republicans about the ... economic benefits of certainty,’ Earnest said. ”And in this case, the economic benefits of certainty in terms of our infrastructure investments would benefit the job market and the economy in communities all across the country.’

The uncertainty over whether federal aid will be forthcoming has cause several states to cancel or delay tens of millions of dollars in construction projects

The trust fund relies on revenue from the federal 18.4-cents-a-gallon gasoline and the 24.4-cents-a-gallon diesel taxes, but fuel taxes haven’t been increased since 1993. Meanwhile, construction costs have risen and the money the taxes bring in isn’t enough to cover transportation spending. Most lawmakers, however, are reluctant to raise the gas tax, seeing that as unpopular with voters.

Unable to find a politically acceptable solution, Congress has kept the trust fund teetering on the edge of insolvency since 2008. The extension passed by Congress would expire July 31, when many lawmakers say they expect to go through the same exercise again.

Several top House and Senate Republicans have indicated they hope to find enough money to put an end to the temporary patches as part of a larger effort to rewrite tax laws. But no bill has yet been introduced and broad tax legislation is notoriously difficult to pass even without the complication of finding a transportation spending solution.

The White House earlier this year proposed spending $478 billion over six years on transportation, a 45 percent increase over current spending levels. The administration proposes to make up the gap between fuel tax revenue and spending with a one-time 14 percent tax on the estimated $2 trillion in untaxed earnings that U.S. companies have accumulated and parked overseas. The tax is opposed by industry. House lawmakers introduce the bill this week, but the measure has been ignored by the GOP, which controls Congress.

There is no shortage of other proposals, including some with bipartisan support. Reps. Reid Ribble, R-Wis., Jim Renacci, R-Ohio, and Bill Pascrell, D-N.J., have introduced a bill that would index fuel taxes so that they rise with inflation and set up a bipartisan commission to find a long-term solution. Rep. John Delaney, D-Md., has also proposed taxing U.S. companies’ foreign earnings, but at a lower, 8.75 percent rate, to pay for transportation programs over six years. It would also create a $50 billion fund to leverage private financing for infrastructure projects.

Rep. Earl Blumenauer, D-Ore., has a bill to increase gas and diesel taxes 5 cents each year for three years and subsequently index the tax rates to inflation. The bill, which has 28 Democratic co-sponsors, would generate $210 billion over 10 years.