Strategy

Congress Faces Transport Funding Deadline

Bipartisan group of senators has proposed an alternative to White House transportation bill but funding shortfall is a major obstacle.
Katie Kuehner-HebertJune 29, 2015

Highway programs could be shut down in August if Congress doesn’t agree on a multi-year transportation bill by the end of next month, The Hill reports.

Many Republicans want another short-term extension of highway funds, while many Democrats favor President Barack Obama’s six-year, $478 billion transportation bill that would be funded largely by taxing overseas corporate profits, according to The Hill.

A bipartisan group of senators, including Jim Inhofe (R-Okla.), and Barbara Boxer (D-Calif.), have proposed a less ambitious six-year, $275 billion highway bill, but are leaving it up to the Finance Committee to find a way to pay for a $90 billion funding shortfall not covered by federal gasoline and diesel taxes.

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Committee Chair Orrin Hatch (R-Utah) said the funding shortfall is a major obstacle and that a three- or four-year transportation bill is more realistic than the six-year proposals.

“It’s pretty tough to go six years — six years is $92 to $94 billion,” Hatch said.
 
“I hope it’s a multi-year, that’s all I can say, and I’m going to make it as long as we can.”

Obama’s six-year plan calls for $317 billion in spending on roads and $143 billion on federal transit projects, to be funded by requiring U.S. corporations to repatriate overseas profits at a 14% tax rate, which would raise $238 billion in revenue, and taxing future foreign earnings at 19%.

Republicans want to pass a multi-year transport funding bill, but are divided on whether to raise some taxes to pay for it, The Hill said. Sen. Bob Corker (R-Tenn.) has called for increasing federal taxes on gasoline and diesel by 12 cents over two years.
 
The gas tax now stands at 18.4 cents per gallon while the tax on diesel is 24.4 cents per gallon.

But any proposal to raise taxes would antagonize the GOP’s conservative base led by Grover Norquist, the president of Americans for Tax Reform, who is urging Congress to eliminate the federal requirement established by the Davis-Bacon Act to pay local prevailing wages.

Republicans including House Ways and Means Committee Chairman Paul Ryan (R-Wis.) support tying transportation funding to broader tax reform.