CBO: Transportation funding needs $100 billion transfusion
The debate among transportation wonks over how to fashion and pay for a long-term federal transportation bill roiled on in Washington this week, as a new number was injected into the picture: $100 billion.
That’s how much the bipartisan Congressional Budget Office estimates will have to be generated by additional taxes or transferred from the general fund if lawmakers achieve their expressed desire to craft a six-year transportation bill. That figure would allow funding to continue at current levels, an amount that experts acknowledge is woefully short of what’s needed to reverse decay in the nation’s infrastructure.
The budget office said the Highway Trust Fund, the traditional source for transportation funding, “will have insufficient revenues to meet obligations starting in fiscal year 2015.” It cautioned, however, that the fund could be exhausted before next year. U.S. Transportation Secretary Anthony Foxx has said it could start “bouncing checks” as early as August.
The White House is steadfast in favor of corporate tax reform as a means of finding new revenue to replenish the fund, but so far has declined to take the lead in fashioning a funding proposal.
With the current two-year transportation bill set to expire Oct. 1, there is virtually no chance that Congress will find a solution before November’s midterm elections. Though House Transportation Committee Chairman Bill Shuster (R-Pa.) again this week expressed determination to forge ahead with a bill, former transportation secretary and seven-term Republican House member Ray LaHood said there was “zero” chance that a bill would pass until after the election.
The post-election odds also were heavily against Congress acquiescing to transfer $100 billion dollars for transportation from the general fund.
In addition to the administrations tax reform proposal, there are several potential solutions on the table: increasing the 18.4-cent-per-gallon federal gas tax, on which the trust fund has relied for decades; shifting the tax burden to wholesale fuel at the refinery; imposing a carbon tax; and allowing U.S. corporations that have stockpiled billions of dollars abroad to bring the money home at a reduced tax rate, with that revenue going to rebuilding U.S. infrastructure.
None of the options has won consensus in the Congress or with the American public, and each faces a strong pushback from affected constituencies.