In his State of the Union address Tuesday night President Obama repeated his call to use corporate tax reform to fund a large, one-time infusion of money into infrastructure.
“Both Democrats and Republicans have argued that our tax code is riddled with wasteful, complicated loopholes that punish businesses investing here, and reward companies that keep profits abroad,” Obama said. “Let’s work together to close those loopholes.”
President Barack Obama delivers the State of the Union address at the U.S. Capitol in Washington, D.C., Feb. 12, 2013. (Official White House Photo by Chuck Kennedy)
“We can take the money we save from this transition to tax reform to create jobs rebuilding our roads, upgrading our ports, unclogging our commutes – because in today’s global economy, first-class jobs gravitate to first-class infrastructure.”
He called on Congress to act quickly: “We’ll need Congress to protect more than 3 million jobs by finishing transportation and waterways bills this summer.”
He also said he would act under executive power to streamline the permitting process for major projects, “so we can get more construction workers on the job as fast as possible.”
This is an approach the President has been pushing for the past year as the balance in the Highway Trust Fund dwindles.
It is not clear, however, that Congress can come to terms on the complexity of corporate tax reform before the Trust Fund runs out of money.
Transportation Secretary Anthony Foxx has warned that the Trust Fund could be depleted as soon as August. House and Senate tax-writing committees are working on reform but concrete proposals have yet to emerge.
Meanwhile, the House Transportation and Infrastructure Committee is working on a highway reauthorization bill with the aim of getting it to the floor by August.
Rep. John Delaney, D-Md., author of a bill that would create a $50 billion infrastructure fund using tax reforms similar to those proposed by the President, applauded the speech.
“The President’s remarks underscore the possibility of finding an innovative solution that addresses both our tax code and our multi-trillion dollar infrastructure deficit,” Delaney said in a statement.
“Rebuilding our nation’s roads and bridges will create millions of jobs in the short term and improve our competitiveness and long-term economic health for decades to come. We can’t compete in a 21st century economy with a 1960s infrastructure.”
American Trucking Associations, which supports raising fuel taxes to pay for highway reinvestment, believes the tax-reform approach is not sufficient.
“While we appreciate President Obama making reference to the need for infrastructure investment, we remain disappointed in the continued lack of specificity when he discusses funding,” said ATA President and CEO Bill Graves in a statement.
“We believe that until the administration puts forward a serious, user-based funding proposal we will risk going over the Highway Trust Fund ‘fiscal cliff’ in the near term and be woefully underfunded to meet the longer term needs of the nation.”
Obama touched on trucking concerns elsewhere in his speech when he said he wants to help business convert to natural gas.
“Businesses plan to invest almost $100 billion in new factories that use natural gas. I’ll cut red tape to help states get those factories built and put folks to work, and this Congress can help by putting people to work building fueling stations that shift more cars and trucks from foreign oil to American natural gas.”
He also referenced his administration’s plans to set new fuel economy standards for trucks.