Fleet Management

Highway Bill Starts 10-Month Countdown

August 12, 2014

By Oliver Patton

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Photo: Evan Lockridge
Photo: Evan Lockridge

President Obama signed the latest short-term extension of the federal highway program, starting a 10-month clock on yet another funding deadline.

The $10.8 billion bill, passed by Congress at the last moment before the Highway Trust Fund dipped into the red, will keep the fund solvent until next May.

It is the 12th short-term patch in the past five years. While it was greeted as a reprieve by state transportation departments and other interests, the relief is tempered by concern about what will happen next.

The federal highway program is in crisis, said Transportation Secretary Anthony Foxx.

“We can’t afford to wait until May,” he said.

If Congress does not pass a long-term bill this year, it is not likely to get the job done on deadline, he said in a recent “town hall” meeting.

The new Congress will be installed in January, after the November mid-term elections, and important legislative action will be postponed until legislators have found their bearings and the issues are lined up. There will be little opportunity to pass a major highway bill before the end of May, he said.

“At that point you and I will likely be told the same thing we were told this summer and over the past several years: a long-term measure is just too hard.”

Congressional leaders on the issue are pushing the same point.

Sen. Barbara Boxer, D-Calif., who led a failed effort to get the House to pass a bill that would force Congress to act this year, said she and her allies would continue work for a multi-year bill “as soon as possible.”

Sen. Bob Corker, R-Tenn., one of Boxer’s allies on this issue, said that short-term patches amount to congressional irresponsibility that is placing a burden on states and cities.

“The best thing we can do to promote economic growth and provide the certainty state and local officials are begging for is to stop stealing from future generations and pass a long-term highway program reform bill that is paid for in the same time frame in which the money is spent,” Corker said.

Sen. Tom Carper, D-Del., a strong advocate of raising the federal fuel tax to pay for infrastructure investment, said Congress should not congratulate itself for passing the patch.

“We are nowhere near the finish line,” he said. “During the August recess and after we return to Washington in September, I will continue to work with my colleagues on both sides of the aisle and both sides of the Capitol, as well as a broad coalition of businesses, labor, truckers, motorists, transit riders, and elected officials, to ensure we do what we were sent to Congress to dogovern and lead by example.”

The challenge will be the same as it always has been: to convince lawmakers that they have to risk the ire of voters who do not wish to pay any more for infrastructure.

A recent AP poll shows that 58% of Americans oppose raising the federal fuel tax to pay for highways. The public also strongly opposes tolling as a way to pay for private investment in roads, and most oppose a vehicle mile tax.

And, the public doesn’t want responsibility for funding shifted to states and local governments, as some conservative groups suggest.

Yet 60% of the public understands that keeping roads in good repair yields an economic benefit, and most say that their local traffic has gotten worse in the past five years.

“The poll doesn’t tell us anything we didn’t already know,” said Joshua Schank, president and CEO of the think-tank Eno Center for Transportation.

“It’s very difficult to convince people that they should pay for something that from their perspective clearly works pretty well.”

Local polls show people are concerned about shortcomings in their personal transportation experiences, but that does not show up in national polls – at least not to the level that makes people willing to pay more, he said.

“It is not realistic to think we can change that public perception, but you can change how elected officials are leading,” he said.

Foxx made a similar point, and called on the public to engage with their Senators and Representatives during the August break.

“I think the country needs to get a little noisier on this,” Foxx said, including asking people to share pictures of crumbling transportation infrastructure via social media by using the hashtag #investnow.

The country is at a moment when something big can happen, he said.

“Over the past six years Congress has looked under every mattress, under the kids’ car seats for nickels and dimes to keep the HTF stable,” he said.

“There’s only so much of that can be done before you run out of options and I think we’re very close to that point. We now have a moment when Republicans and Democrats can forge an alliance.”

What's Next

The first opportunity to see if an alliance is possible will be in September, when Rep. Dave Camp, R-Mich., chairman of the House Ways and Means Committee, has promised to hold a hearing on highway finance.

Camp has floated the idea of reforming the corporate tax system to generate revenue that could pay for a one-time, long-term highway bill.

The Obama administration’s approach to paying for its four-year highway bill, the GROW America Act, is similar to the extent that it involves corporate tax reform, but neither Camp nor Obama have spelled out exactly what they have in mind.

Ways and Means has not posted a date or a witness list for the hearing, but all of the known options for funding have been put on the table at one time or another.

They range from phasing back the federal fuel tax and the Highway Trust Fund and devolving responsibility to the states, simply living with funding that’s now available, or raising more money through any of a number of traditional or alternative methods.

American Trucking Associations, which believes the answer is to raise the fuel tax, recently added other options it will accept. Among them: index the tax to prices and use the revenue to subsidize Treasury bonds, use proceeds from repatriation of overseas capital as Camp and Obama have suggested, or impose a per-barrel tax on imported oil and domestic crude production.

Schank of the Eno Center likes the idea of funding transportation from general revenues. Keep the Highway Trust Fund, but set aside money from the treasury to pay for roads, he said.

Other countries take the approach of making transportation part of the national budget, he said. The money could come from reforms of the tax code, entitlements or Social Security, he said.

He thinks this approach is more likely to pass political muster than raising the fuel tax.

“Raising the fuel tax to pay for transportation alone is something that is highly unlikely,” he said. He expects that the majority of Republicans and most Democrats on the Ways and Means will oppose the idea.

“But a fuel tax increase could be part of a larger effort to fix our taxing system, our spending and government reform. People are not likely to accept higher fuel taxes unless they’re part of a larger compromise.”

Meanwhile, the Eno Center is working with freight interests to come up with a way to pay for reinvestment in the national freight system. Schank said the Freight Funding Working Group aims to develop recommendations for funding the freight investments now being planned by the Department of Transportation. The group will meet in Washington, D.C., September 16.

Comments

  1. 1. Dennis [ August 13, 2014 @ 08:36AM ]

    They should leave social security alone. The government had already robbed social security so much that they are claiming it will go broke in just a few years. Is it Rep. Camp and Obama's idea to take the rest of social security money and totally bankrupt it?

  2. 2. William Stevens [ August 15, 2014 @ 07:33AM ]

    The bitter tax pill would not be so hard to swallow if the funds raised by an increase in fuel tax were spent on infrastructure vs committee salaries, feasibility studies and the EPA looking at how swamp land will be affected. We have a number of highly competent engineers out here who could draw this stuff on a napkin and get it done but the good ol' money grabbing Gov' won’t let go of the money. Hell' they'd rather send it to a foreign nation before paving a road without the EPA's nod.

 

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