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Highway Bill Soaps…

No Highway Bill, Another Extension?

By Greg Sitek

Tired of seeing this comment when anything relative to the highway bill comes up for discussion? You should be. Since 2009, Congress has passed 34 short-term bills to fund transportation programs.

On July 18, 2015 the chairman of the Senate Finance Committee Sen. Orrin Hatch (R-Utah) said, during the Thursday hearing, that his preference is for lawmakers to pass a long-term extension to avoid repeats of the upcoming “highway cliff.”  He thinks a six-year transportation funding bill sought by infrastructure advocates is “a great goal” and said he is “committed to working to get us as close to that goal as possible.”

The current transportation funding legislation includes about $50 billion in annual spending on road and transit projects. With the current gas tax at (which has not been increased since 1993) 18.4-cent-per-gallon, Federal Gas Tax revenue is only about $34 billion per year. Other pockets of the federal budget have been tapped to fill the gap in recent years. Transportation advocates have pointed out that the resulting temporary patches prevent states from completing long-term construction projects. These short-term extensions negatively impact all transportation related improvements, repairs and maintenance on all levels — regional state, municipal and local.

The Congressional Budget Office has estimated it will take somewhere around a $100 billion to close the gap long enough to pay for a six-year transportation funding bill.

Hatch added, “Right now, when it comes to highways, we find ourselves caught in a familiar dilemma, between raising taxes or cutting back on the highway program.”

Why the delays, why the problems with passing a six-year bill? Hatch stated “First of all, neither party should point fingers and try to lay blame when it comes to the now-common practice of passing short-term highway extensions. ” He added, “Between the 110th and 113th Congresses, when the Democrats controlled the Senate, we enacted 11 short-term highway extensions.”

Highway and transportation advocates, industry associations and the industry all believe that without a long-term bill, be that six years or more, our national highway system is at risk. According to CBO, a six-year highway bill that maintains the current spending baseline will cost at least $92 billion.

The needed improvements, repairs, updates, maintenance can’t happen without funding. Funding can’t happen without some form of revenue collection — fuel tax, vehicle mileage tax, etc. – and right now fuel tax is the most realistic way to cover these costs. The extension that sits waiting for the Senate rewrite will take us to the end of the year. Will the House accept the Senate rewrite? Your guess is a good as anyone’s. Meanwhile we continue to drive on rapidly deteriorating roads, causing endless dollars of damage to our vehicles and reducing the safety factor in driving.

You really have to sit back and ask yourself, if congress couldn’t come up with a long-term bill over the course of 6 years and 34 failed attempts can they get the job done in 5 months with an election year coming? Or, will we be looking at extension 35?

Now Comes the Senate

The following comments by:

Michael O’Brien

Public Affairs Manager, Association of Equipment Manufacturers

 Welcome back to your favorite intermittent email series, “Where are we on a highway bill?” Below is a brief recap of today’s action, and some perspectives on where we go next.

We have a bill. We don’t have a bill.

Senators McConnell, Inhofe and Boxer announced a deal on a bipartisan, six-year highway bill late Tuesday morning after a weekend full of negotiating over ways to pay for it. But the legislation hit a procedural snag after Democrats blocked proceeding to the agreement because the text of the bill hadn’t been released until a few minutes before the scheduled cloture vote.

The vote was 41-56, after which Sen. McConnell (who voted no for procedural reasons) immediately entered a motion to reconsider, setting up another attempt at a Motion to Proceed (MTP) as soon as tomorrow. McConnell further suggested the Senate may work into the weekend to complete its work on highways.

But we do have pay-fors.

The agreement includes about $45 billion in funding offsets, good enough to finance about three years (or half) of the six-year bill. Some of the biggest offsets include:

[if !supportLists]·         [endif]$16.3 billion from cutting the dividend rate paid by the Federal Reserve to large banks

[if !supportLists]·         [endif]$9.0 billion from selling off a portion of the Strategic Petroleum Reserve (SPR)

[if !supportLists]·         [endif]$4.0 billion from indexing customs user fees to inflation (Funny how indexing certain user fees is now so popular in Congress…)

You can find a full summary of the offsets, courtesy of our friend from the Senate Finance Committee, here.

Where do we go now?

 Senator Reid said that Democrats will meet on Wednesday morning to discuss the specifics of the highway bill. Senator Boxer urged fellow Democrats to vote yes on cloture tomorrow: “I hope that tomorrow we’ll be able to join with our friends and vote to proceed.”

And though House Majority Leader Kevin McCarthy said Tuesday that the Senate should take up the House bill, Senator McConnell – who hardly ever offers offhanded comments – said he expected the House would take up a long-term bill if it is passed out of the Senate: “If we can get this bill over to the House, it is my belief they will take it up.”

What’s business doing?

AEM joined 67 other groups in signing a letter in support of today’s agreement. The U.S. Chamber of Commerce, among other groups, also urged senators to support cloture.

AEM and its coalition partners are going to continue to enlist our respective memberships to call and email Congress to urge work toward advancing a multi-year transportation bill. In the last 24 hours alone, AEM’s grassroots supporters have sent 1,400 emails to Congress in support of a long-term highway bill.

We’ll continue to impress the importance of providing our nation’s highway programs with critical certainty in the coming hours and days.

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