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Outlines of Transport Bill Emerge from Senate Hearings

July 24, 2011

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The outline of a transportation reauthorization bill started to emerge from the haze of Washington's summer heat storm last week.

Timing and details will remain blurred for a while yet, at least until the epic struggle over the debt ceiling is resolved, but at several hearings last week Senators began public discussions on highway funding, policy and safety.
The Senate Environment & Public Works Committee is going forward with a 2-year proposal that would keep funding at its current level of $109 billion. (Photo by Steven Vance)
The Senate Environment & Public Works Committee is going forward with a 2-year proposal that would keep funding at its current level of $109 billion. (Photo by Steven Vance)


The Senate Environment & Public Works Committee is going forward with a 2-year proposal that would keep funding at its current level of $109 billion.

This is in contrast to an earlier House proposal for a 6-year measure that Sen. Barbara Boxer, D-Calif., chairman of the EPW Committee, said would cut the federal transportation program by 36%.

The House proposal envisions spending only what can be collected by the Highway Trust Fund. Boxer said she intends to maintain current spending levels, which means that the Senate Finance Committee needs to find an additional $12 billion over what will come in from the trust fund.

Sen. Max Baucus, D-Mont., a member of EPW and chairman of the Finance Committee, said he working hard to find the money. "Nothing is certain around here, but I feel fairly confident that we will on a bipartisan basis find that $12 billion and avoid the severe cuts the House is proposing."

Sen. James Inhofe, the ranking Republican on EPW, supports the effort to raise the $12 billion but warned "it will be virtually impossible" to pass the measure unless the funding gap is closed.

Boxer said her aim is to mark up a bill before the August recess, so there is not much time.

MAP Proposal

The proposal, called Moving Ahead for Progress in the 21st Century, consolidates a number of highway funding programs. For instance, it would merge the Interstate Maintenance, National Highway System and part of the Highway Bridge programs into one program that focuses on the most critical stretches of road.

Like the House bill, it boosts funding for the Transportation Infrastructure Finance and Innovation program, which leverages federal money by providing loans, loan guarantees and lines of credit to pay for highway projects of national and regional significance. Boxer's proposal would boost TIFIA from $122 million to $1 billion a year.

Unlike the House proposal, it includes a specific program for freight, which would provide funds to states to improve cargo movement and intermodal connectors. The House proposal contains no specific language on freight policy, although Transportation and Infrastructure Committee Chairman John Mica, R-Fla., said he intends to ask the Ways & Means Committee, which has jurisdiction over funding, for tax credits and other incentives for freight.

Another major difference between the Senate and House proposals concerns the idea of an infrastructure bank. Boxer said she wants to have a national infrastructure bank. The House, on the other hand, is proposing to give states incentives to start their own infrastructure banks. The difference probably will have to be resolved in the conference process after the bills are drafted and passed in each chamber.

Both proposals emphasize improvements in project delivery. Boxer's measure would, for example, expand innovative contracting methods, create dispute resolution procedures and allow for early acquisition of rights of way.

Another Financing Idea

There's another possible financing mechanism in the works. Sen. John Kerry, D-Mass., has introduced a bill that would create the American Infrastructure Financing Authority. This would be a wholly-owned government corporation with a CEO and a board of directors that would provide direct loans and loan guarantees for transportation projects.

At a hearing held last week by the Senate Commerce Committee, Kerry stressed that he does not see this entity in competition with federal programs such as TIFIA. It would be free-standing with its own rules, and would perform as a professional bank, without undue political pressures on the loans it makes, he said.

This idea will have to overcome several hurdles. One was raised by Sen. Kelly Mayotte, R-N.H., who wanted assurance that the bank would not leave the taxpayer on the hook in the event of, say, a bad loan. Another was raised by assistant transportation secretary Polly Totenberg, who said that DOT is not in principle opposed but noted that the department has the expertise to do the job.

The concept of an independent entity is appealing, however, to the investment banking community. Robert Dove, managing director of Carlyle Infrastructure Partners, said that being independent the bank would have more credibility with investors.

In another hearing, Sen. Frank Lautenberg, D-N.J., opened discussions on what will likely be included in the safety title of the Senate's reauthorization bill. Lautenberg, who chairs the Surface Transportation Subcommittee, said he plans to introduce a bill soon. (See separate story.)



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