Congress to face dilemma in funding long-term transportation bill

The Obama administration Wednesday again touted corporate tax reforms as a means to pay for roads, bridges and transit but acknowledged that Congress may take the lead as the traditional funding source for transportation nears extinction.

“I’m talking to members of Congress all the time. This is a dialogue, it’s not a monologue,” said Transportation Secretary Anthony Foxx. “We fully expect that there will be other ideas out there, and it’s a matter of getting those ideas on the table. We’re going to continue engaging with Congress.”

Foxx’s comments Wednesday after a speech at the Transportation Research Board’s annual meeting were an echo of those made Tuesday by Rep. Bill Shuster (R-Pa.), chairman of the House Transportation and Infrastructure Committee.

“We’ve got to look at everything,” Shuster said after chairing a three-hour hearing at which he said he hoped to have a new long-term transportation bill on the House floor before the August recess.

“I’m considering everything. In Congress, sometimes things happen quick,” he said.

With the Highway Trust Fund forecast to go bankrupt next year and the current two-year transportation bill set to expire Oct. 1, Congress faces a struggle to find funds for a new long-term transportation bill.

Several solutions are on the table: increasing the federal gas tax, on which the trust fund has relied for decades; shifting the tax burden to wholesale fuel at the refinery; 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 will win consensus in the Congress or with the American public, and each faces a strong pushback from affected constituencies.

Foxx made reference to a proposal being worked on by Senate Finance Committee Chairman Max Baucus (D-Mont.) and his counterpart in the House, Rep. Dave Camp (R-Mich.).

They have been working on a plan meant to stabilize and simplify the tax code and lower the base rate for corporations.

The proposed changes would impose taxes on earnings parked overseas and curb certain tax deductions, generating about $200 billion in revenue.

One issue that arose in Shuster’s committee did not appeal to Foxx. Republican members, particularly those from rural states that have little mass transit, want to separate transit funding from the Highway Trust Fund, arguing that if the gas tax pays for the fund, it should be used to pay for improvement to roads and bridges. Transit, they said, should find ways to pay for itself.

Foxx did not buy that line of reasoning.

“It is critically important that stability, predictability and sustainability be built into our system,” Foxx said, “and that idea could have a destabilizing impact on transit. It might move us in the opposite direction than where [we] think we should go.”

Ashley Halsey reports on national and local transportation.
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