By Becky Weber
Federal surface transportation programs for highways, transit, motor carrier safety and highway safety have been operating on a series of eight extensions over two years since the expiration of the last multi-year reauthorization bill in 2009 (commonly referred to as the “Highway Bill”).
The eighth extension, signed into law just two weeks ago, keeps the programs running through March 31, 2012. While there are still vastly different visions for the bill between House and Senate leaders, and funding hurdles remain difficult to resolve, there may be a new glimmer of hope for resolution of a bill over the next six months.
House and Senate goals for a bill remain very far apart. Chairman John Mica (R-FL) and House leadership remain deeply committed to a multi-year, long term bill. Chairman Mica’s outline for a bill, released in July, proposed a six year authorization period with a total price tag of $230 billion. Chairwoman Barbara Boxer (D-CA) has proposed a shorter two year bill with a price tag of $130 billion. Chairman Mica’s proposal is based on what current trust fund revenues can support and would cut programs by almost 30%. This proposal is consistent with the House passed budget resolution. In order to keep funding levels flat, Chairwoman Boxer’s proposal would require an influx of around $13 billion from somewhere and the additional revenues have not been identified.
The problem is that the Highway Trust Fund, which is funded primarily by a Federal excise tax on fuel, is no longer producing the revenues to keep up with spending demands. A decline in vehicle miles travelled, increased usage of alternative fuels and increases in fuel efficiency have exacerbated the problem. The gas tax has not been raised in 18 years, and its buying power has significantly diminished over that time period. Over the last two years, the trust fund has been bailed out by the general treasury three times to the tune of $30 billion just to keep it in the black. Simply put, if spending remains at current levels the trust fund will be broke by 2013.
Two leading blue ribbon commissions authorized by Congress in the last bill to look at this problem suggested an increase in the federal fuel tax in the short-term and a transition to a Vehicle Miles Travelled (VMT) tax in the long-term. The Presidentially appointed bipartisan National Commission on Deficit Reduction and Reform also recommended a gradual 15-cent increase in the fuel tax. Despite the support, fuel tax increases and VMT taxes are both deemed politically unfeasible in the current political environment and “off the table.”
The President pushed hard to extend the programs again to avoid an interruption in funding and adverse impact on construction jobs. However, he has not and does not plan to deliver an official administration proposal for a multi-year bill to Capitol Hill and so far has not specifically engaged on the financing debate, despite support for increased program levels.
With this backdrop, the landscape for a highway bill can look pretty grim. However, one thing that many in Congress and the President can agree on is the urgent need to focus on jobs and the economy and the need to maintain and improving the country’s surface transportation infrastructure. Most Presidential signing ceremonies for highways bills over the last 25 years have featured workers in hard hats as the backdrop – the link between these federal programs and jobs is longstanding. The Federal Highway Administration estimates that for every $1 billion in federal highway spending, 30,000 jobs are supported. With jobs and the economy being front and center in the political conversation, a ray of hope has broken through the clouds for the possibility of reaching consensus on a bill. In recent weeks, House leadership has come to the table in its first serious effort to move a bill and search for additional revenue sources to augment trust fund revenues to boost funding levels by an additional $90 to $100 billion over six years, which would enable the programs to stay close to current funding levels. In addition, the construction industry and business community are ratcheting up the pressure for Congress to come together on a bill. Last week, 20 non-construction industry CEOs sent a letter to the bicameral leadership of House and Senate urging Congress to pass a robust surface transportation bill given the impact of infrastructure on the global economy.
While many hurdles remain, the last best chance to come to consensus on a highway bill this Congress may be in the next six months -- and it just might happen.