AASHTO Journal, 10 July 2015
In a series of developments important for the future of highway and transit programs, leaders in both the House and Senate said legislation was coming soon to extend the Highway Trust Fund before its July 31 expiration. Some in Washington continued to seek quick action on a long-term bill, while others sought just a six-month extension.
Senate Majority Leader Mitch McConnell, R-Ky., told Capitol Hill reporters July 8 that the Senate was likely to take up an extension in the coming week, and said he was “skeptical” about chances to quickly pass the long-term highway authorization bill recently advanced by the Environment and Public Works Committee.
He also said he was skeptical of a new bipartisan proposal for Congress in coming months to create a new tax system on international profits of U.S. corporations, and use temporary revenue from repatriated earnings to fund a multiyear highway/transit bill. (See related story.)
The next day, House Ways and Means Chairman Paul Ryan, R-Wis., told a public forum that “we will have to do an extension through the year, this month, because it is impossible to put in place a six-year financing package for highways in the next two weeks. And we’re trying to impress this point upon our colleagues.” He said it will cost $8 billion to cover the trust fund’s needs from the end of July to the end of 2015.
Ryan also told the “Morning Money” forum, sponsored by Politico newspaper and Wells Fargo bank and carried on CSpan, that “we in the House – I can speak for the House – we want a six-year highway bill. We want a long-term highway bill. We want to give states the ability to plan ahead. But that means we have to come up with a way to do long-term financing.”
He reiterated that a long-term funding solution will not come quickly, and explained the strategy is to come up with some “bridge financing plan” in the next few months to pay for a six-year bill. Ryan said he was encouraged by the bipartisan repatriation proposal.
And Ryan said “hopefully” after that six-year period of a new highway bill, Congress would have figured out some sort of user fee system to cover trust fund spending.
Both McConnell and Ryan reiterated that Congress will not increase motor fuel taxes to fund transportation, but did not indicate how they would cover the costs to keep the trust fund operating.
For now, Congress must extend HTF authority by July 31 or the U.S. Department of Transportation would not be able to keep reimbursing states or paying transit agencies for projects already under way.
And sometime this summer, the HTF’s highway account is also on a pace to shrink to levels that would force the USDOT to employ cash management curbs to its reimbursements. That would happen if Congress extended program authority but did not provide additional funding.
In related developments, the Senate Commerce, Science and Transportation Committee scheduled a July 15 markup of legislation that would be paired with the EPW’s six-year highway bill. The Commerce sections would include highway safety provisions, a revamping of the TIGER infrastructure grants program that refocuses it on freight projects and an authorization of the Amtrak passenger rail system.
That would be the second authorizing committee to offer long-term surface transportation measures. The Senate Banking Committee would still need to produce transit provisions, the House Transportation and Infrastructure Committee would need to produce its own bill, and the financing panels of both chambers would need to come up with funding.
And although Ryan had flatly said all of that was too much to accomplish in July, the introduction of a Commerce bill at this time kept long-term policy on the immediate agenda.
USDOT Secretary Anthony Foxx, in a series of appearances and remarks to reporters, pressed for long-term action and indicated the Obama administration might not support a short extension, depending on what was in it.
He also told Bloomberg July 2 that “this is a time when we need to think big. We need to go long-term. We need to go with greater levels of investment,” because current funding levels will not maintain the system going forward.
Foxx’s comments are similar to the theme of an educational campaign that the American Association of State Highway and Transportation Officials launched this year, to try to boost public awareness of the need for infrastructure investment. The opening line of its new video is: “America has always been defined by big thinking.”
But the deadline countdown has some industry leaders concerned. Vermont Transportation Secretary Sue Minter and Rep. Joe Welch, D-Vt., warned in a July 7 news conference that 43 road, bridge and rail projects in that state alone would be put on hold if the trust fund’s authority would expire July 31.
And Jim Tymon, AASHTO’s chief operating officer, said in a Transportation TV special report that “we’re about to go over the cliff yet again.” (See related TTV story in this week’s Journal).
If Congress does not act and the USDOT delays payments on projects, “that’s a very serious problem for state DOTs and local transit agencies,” Tymon said, “because they’ll be left on the hook for obligations that the federal government has already agreed to pay.”