Senators Move Towards a Big Infrastructure Deal
Policy + Politics

Senators Move Towards a Big Infrastructure Deal

Congress has finally been shamed into doing something about the near bankrupt federal highway program after infuriating the nation’s governors, mayors, businessmen and labor leaders by postponing tough decisions about long term funding.

Key Republican and Democratic senators reached a tentative agreement on Tuesday on the broad outlines of a new six-year transportation bill aimed at addressing the country’s crumbling infrastructure and need for more construction jobs.

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Whether the Senate and House can finally break a nearly two-year impasse and pass legislation by a working deadline of July 31 remains to be seen. The biggest question, as always, will be how to pay for the new legislation and replenish a Federal Highway Trust Fund that is nearly bankrupt. Lawmakers have “kicked the can down the road” so often since the last major transportation legislation expired in 2009 that the cash-poor highway trust fund has become the poster child of congressional dysfunction.

Just last Friday, President Obama in a speech to the U.S. conference of Mayors in San Francisco blasted Congress for delaying action on highway projects.  “There’s not a mayor here who can’t reel off 10 infrastructure projects right now that you’d love to get funding for,” Obama told the mayors. 

A bipartisan working group led by Senate Environment and Public Works Committee Chair James M. Inhofe (R-OK) and ranking Democrat Barbara Boxer of California formally unveiled a  six-year, $350 billion spending plan that would boost overall highway, bridge and other infrastructure projects by about 13 percent over the current level. Lawmakers likely will also consider an additional package of more than $90 billion for transit, railroads and buses, according to The Washington Post.

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The bill, known as the DRIVE ACT, slashes some government red tape, builds on the previous multi-year program, increases transparency in the decision making process while also  giving state and local governments “the certainty and stability” they need to improve and develop the nation’s infrastructure, according to a summary of the bill.

“Our nation’s roads and highways have suffered under too many short-term extensions, which have led to higher costs, more waste, and less capability to prioritize major modernization projects to address growing demands on our interstates,” Inhofe acknowledged in announcing the bipartisan plan. “The DRIVE Act will provide states and local communities with the certainty they deserve to plan and construct infrastructure projects efficiently.”

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There are still many details and spending formulas to work out for the new long-term highway program, but the biggest problem will be reaching an accord on how to finance the legislation. 

Business and transportation advocates, along with some lawmakers and conservative think tanks have proposed raising the 18.4 cents per gallon federal gasoline tax as a solution for the looming $10 billion shortfall in the current fiscal year, often noting that the tax hasn’t been increased once during the past two decades.

However, House Ways and Means Committee Chair Paul Ryan (R-WI), House Speaker John Boehner (R-OH), Senate Majority Leader Mitch McConnell (R-KY) and even President Obama are opposed to trying to solve the problem by boosting the gas tax. Yet they remain far from agreement on an alternative source of funding.

Related: Deadlock Over Highway Spending Could Stall Economy

Ryan and President Obama have previously floated proposals for funding a new, multi-year highway program by taxing overseas corporate revenues – so-called “repatriation” --as part of a comprehensive reform of the federal tax code. But the two have very different approaches in how to raise that additional tax revenue. And overhauling the tax code before the 2016 presidential election would be a heavy lift at best.

During a hearing last week, Senate Finance Committee Chair Orrin G. Hatch (R-Utah), the Senate’s chief tax writer,  said that finding a revenue source “seems insoluble,” but added that he was determined to find a way.

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