McConnell and Boxer Offer a Grab Bag of Gimmicks to Pay for Highways
Policy + Politics

McConnell and Boxer Offer a Grab Bag of Gimmicks to Pay for Highways


With new highway funding legislation as muddled as ever, Senate Majority Leader Mitch McConnell (R-KY) tossed  a Hail Mary pass on Tuesday by offering a bipartisan plan with Democrat Barbara Boxer (CA) to spend $50 billion over the next three years to replenish the highway trust fund.

The deal would finance highways, bridges and other infrastructure for the next three years while putting the onus on the next Congress to come up with funding for an additional three years, according to The Hill.

The House last week approved a modest five-month extension of the existing highway authority to give members more time to craft a long-term replacement. But McConnell and Boxer, the ranking member of the Senate Environment and Public Works Committee, say they are tired of kicking the can down the road and want a long-term solution before Congress leaves for its August recess.

Related: Congress Uses Accounting Gimmicks to Fund Highway Bill

Boxer had earlier proposed a far more ambitious program covering transportation spending for an entire six-year span, but apparently will settle for half a loaf. Since 2009, Congress has passed 34 short-term bills to keep the highway program afloat.

The long-troubled federal highway program has been largely funded by gasoline tax revenues from the federal Highway Trust Fund. But McConnell made it loud and clear over the weekend that a boost in the 18.4-cents per gallon federal gas tax is out of the question. Many Republican lawmakers view an increase in the gas tax as a violation of their solemn vow not to raise taxes, although the gas tax hasn’t been increased or adjusted for inflation in two decades.

"Read my lips," McConnell said at a Bullitt County Chamber of Commerce luncheon in Kentucky. "We're not raising the gas tax."

Finding a way to fund a new highway program has always been the major stumbling block. House Ways and Means Committee Chair Paul Ryan (R-WI), Senate Finance Committee Chair Orrin Hatch (R-UT), President Obama and others have kicked around a number of ideas, including rewriting corporate tax law to tap into the hundreds of billions of dollars of profits stashed overseas by U.S. multi-national corporations.

Related: Why Congress Can’t Make a Deal on Highway Spending

But with major tax reform unlikely before the 2016 election, McConnell, Boxer and others are eying a number of one-time only budget gimmicks and maneuvers to keep federal funds flowing to state and local governments to address the nation’s crumbling infrastructure.

The largest single source of fresh revenue, $17 billion, would come from cutting dividends paid by the Federal Reserve to member banks, according to Morning Consult. Another $7 billion would come from the sale of oil from the Strategic Petroleum Reserve.

It gets even better: Increases in fees paid to the Transportation Security Administration, customs fees, and the elimination of Social Security benefits for people with outstanding warrants for their arrest would all contribute a few billion dollars toward the new program. Altogether, changes in nearly a dozen programs would generate savings of $48.7 billion.

But McConnell and Boxer will be racing the clock, with many obstacles to passage of a final deal before the end of the month. The Senate is scheduled to take an important procedural vote Tuesday afternoon to launch the debate on the floor, while intense negotiations take place away from the chamber.

Related: Highway Funding Could Be Backdoor to Corporate Tax Reform  

Conservatives are spoiling for a fight if McConnell attempts to attach the reauthorization of the Export-Import Bank to the highway bill, as McConnell suggested he would try. Although he opposes extending the bank’s charter, McConnell has promised Republican and Democratic supporters of a vote on reauthorization.

And some conservatives don’t like the idea of funding highways with budget gimmicks. Heritage Foundation research associate Michael Sargent today called the deal “bad policy that contributes to a tax-and-spend agenda and the growth of government.”

Sargent said there has been “no serious talk” of addressing the Highway Trust Fund’s chronic overspending. “Even if Congress beefs up revenues to fund this new deal—that diverts money away for new programs—it will face a shortfall again in two to three years,” he said in a statement.