Last week, the House Transportation and Infrastructure Committee’s passed the Surface Transportation Reauthorization and Reform Act (STRRA) of 2015.
The $325 billion infrastructure bill includes authorizations for infrastructure projects for the next 6 years.
The Senate passed a bill that includes 3 years of guaranteed highway funding in July, and the STTRA, passed by the House Transportation and Infrastructure Committee Thursday, could function as a similar companion piece that could, potentially, make it through a conference committee and to President Obama’s desk by the Thanksgiving recess.
Lawmakers Push for Passage
Sens. James Inhofe (R-Okla.) and Barbara Boxer (D-Calif.) told The Hill it is possible for lawmakers to get a long-term highway bill to Obama by then now that the House highway bill has cleared its first committee test.
“Both the Senate and the House bills have many similarities that will allow for a very short conference period,” Inhofe said in a statement after the panel’s vote.
Yet, there are still issues with both bills that would have to be reconciled before either makes it through to President Obama. The House bill is not entirely funded and many conservative members could balk at passing it through the full House without having all 6 years paid for.
Achievement Unlocked: Future Funding
The STRRA would require lawmakers to pass new legislation to “unlock” additional funding after the initial 3 years, instead of guaranteeing it in advance. It’s a novel mechanism to force lawmakers to come up with more funding, sure, but some could see it as a gimmick to avoid coming up with the money at passage. Others may see it as an unfunded mandate and refuse to vote for it on fiscal responsibility grounds.
The traditional source for transportation funding is revenue collected by the federal gas tax, which is currently set at 18.4 cents per gallon. The federal government spends about $50 billion per year on roads, but the gas tax take only brings in $34 billion annually. Without an increase in the gas tax congress will have to find money somewhere else for those last 3 years.
The Battle of the Offsets
This is where legislative differences come into the picture. The House and Senate bills do not even agree on how to offset the shortfall from the gas tax that will need to be paid for to cover the costs of road, highway and transit spending.
Both bills seek to maintain the federal government’s current spending level of about $50 billion per year for transportation projects, adjusted for inflation. To reach that level of spending, Congress will have to come up with approximately $16 billion per year to supplement revenue from the gas tax, which has not been increased since 1993.
To close the gap long enough to pay for three years’ worth of road funding, the Senate approved a package of approximately $47 billion of offsets.
The Senate package relies largely on revenue from reducing interest rates paid by the Federal Reserve to large banks, selling oil from the Strategic Petroleum Reserve and directing fees from the Transportation Security Administration and customs processing. House leaders balked at the proposals, opting instead for a 3-month extension with $8 billion of offsets that are now set to expire on Oct. 29.
The Department of Transportation has said it will have to stop making payments to states and local governments for infrastructure projects in November if Congress does not reach an agreement. Federal projects have been continuing based on short-term extensions for 2 years now. Most projects can’t even purchase materials for the next year without assurance that states and municipalities will keep funding their projects. It’s time for the Senate and House to reconcile their differences.
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