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With Funding Clock Ticking, Congress Turns to Highway Bill

January 27, 2014

By Oliver Patton

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Congress is getting to work on the next highway bill.

At its opening hearing on reauthorization on Jan. 14, the House Transportation and Infrastructure Committee heard urgent calls for a bipartisan approach to sustainable funding, a multi-year program and federal leadership.

Committee Chairman Bill Shuster, R-Pa., said he wants to wrap up work on the bill by early summer and get it to the floor by August.

Discussions about the bill are tinged with a sense of impending crisis. The Highway Trust Fund is on track to run out of money by next year, and possibly even sooner. Transportation Secretary Anthony Foxx has warned that the fund could be depleted by this August.

In the House, funding is the responsibility of the Ways and Means Committee, and a group of Democratic committee members are asking Ways and Means Chairman Dave Camp, R-Mich., to schedule hearings on highway funding options.

“Our transportation programs may begin to notice the drop in funding this summer, when the Highway Trust Fund’s available cash on hand is likely to fall below $4 billion,” they said in their letter to Camp.

That’s the minimum amount needed to meet week-to-week obligations, they said. “Below this amount, reimbursements to construction projects will be curtailed, and jobs will be lost.”

Among those who signed the letter is Rep. Earl Blumenauer, D-Ore., author of a bill that would raise federal fuel taxes and index them to inflation.

Another money-raising option available to Congress is to leverage federal dollars through public-private partnerships. The Transportation and Infrastructure Committee is putting together a special panel to examine that approach.

The group of committee members will look at existing partnerships, which typically finance projects that produce a revenue stream through tolling. It also will study how these partnerships affect management of the projects, and how to balance public and private interests.

The group will be lead by Rep. John Duncan, R-Tenn., who chaired a similar panel that looked into freight transportation policy, and Rep. Michael Capuano, D-Mass.

In a related development, support is growing in the Senate for a funding idea that originated in the House, The Partnership to Build America Act.

This bill, introduced last year by Rep. John Delaney, D-Md., would provide $50 billion in loans and loan guarantees financed by the sale of infrastructure bonds.

Delaney’s idea is to give corporations an incentive to buy the bonds by letting them repatriate some of their overseas earnings tax-free. The initial $50 billion federal investment would be leveraged up to $750 billion in loans or guarantees, he says.

The bill has bipartisan support from 50 House members and now Sens. Michael Bennett, D-Colo., Roy Blunt, R-Mo., have introduced a Senate version. Joining them as co-sponsors are Mark Warner, D-Va., Kelly Ayotte, R-N.H., Mary Landrieu, D-La., Lindsay Graham, R-S.C., Angus King, I-Maine, Dan Coats, R-Ind., Mark Begich, D-Alaska, John Hoeven, R-N.D., and Mark Kirk, R-Ill.

T&I Hearing

One theme Shuster has been stressing as his committee sets the foundation for the highway bill is the need to educate legislators on transportation.

In recent remarks to the U.S. Conference of Mayors, he asked for help to overcome the reluctance of some House members to support a continuing federal role in transportation, according to a news account.  

The issue was front and center at last week’s T&I hearing.

“It’s going to be important for stakeholders to educate and advocate to the public and Congress,” Shuster said.

“Some members of Congress are not clear on how far we’re falling behind on infrastructure.”

Witnesses at the hearing were adamant on that point.

Stuart Levenick, group president of Caterpillar, one the nation’s largest exporters, told Shuster that the transportation network does not work as it should.

Caterpillar sends 40% of its exports through Canadian ports because they’re faster than U.S. ports – even though they’re further away, he said.

“If the network doesn’t work together as an integrated whole, that’s a problem,” Levenick said. “We need a multi-year sustainable plan.”

The news that so much of Caterpillar’s freight goes through Canadian ports was upsetting to Rep. Janice Hahn, D-Calif. That means, she said, that Caterpillar is avoiding the harbor maintenance tax, which helps fund port maintenance.

Levenick replied that the company’s decision is not arbitrary. Caterpillar would love nothing better than to use U.S. ports, he said.

“It drives us crazy that we can’t export efficiently from U.S. ports,” he said. “It only makes sense (to use U.S. ports), they are closer to our place of manufacturing. We’re only doing it because we’re driven by global economics.”

Transportation modes – highways, rail and water – are not as well aligned in the U.S. as they are in other countries, Levenick said.

“If you have a world-class port, and the highway infrastructure surrounding it isn’t up to standard, you haven’t gained anything. Other countries are doing it much better, and we all pay a price for that.”

Rep. Peter DeFazio, D-Ore., noted that on the Republican side there’s a school of thought that federal involvement in transportation should be devolved to the states.

“We don’t support that,” Levenick replied. “It’s not an effective solution.”

Rep. Nick Rahall, D-W.Va., the ranking member of the panel, put the same question to Oklahoma Governor Mary Fallin.

“There has to be a partnership between the federal, state and local governments,” Fallin replied. “We need a national vision. The states can’t pick up all the costs.”

"States also need Congress to produce a long-term bill, she said. “We need certainty.”

Atlanta Mayor Kasim Reed told the panel that one major virtue of a multi-year bill is that it creates jobs.

“There is no question that transportation and infrastructure is where you create verifiable jobs,” he said. “The long-term bipartisan nature of transportation is undeniable.”

Caterpillar’s experience with U.S. ports should be pivotal, Reed said.

“The fact that the ports of the United States are so uncompetitive that 40% of Caterpillar’s traffic is being sent to Canada would be persuasive to any person that cares about their own standard of living,” he said.

“If you love America and want it to be the leading economy of the world, it has to have world-class infrastructure because the rest of the world gets it and is investing in it. And the fact of the matter is that we are losing.”

Work on the bill continues Tuesday with a hearing by the T&I Committee’s Highways and Transit Subcommittee on safety funding. The National Transportation Safety Board and the Commercial Vehicle Safety Alliance will be among the witnesses.

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