It didn’t generate much attention, but President Obama traveled to St. Paul, Minn., this week to deliver a speech on infrastructure and his administration’s plan to rebuild it.
Caught between a gridlocked Congress and a Highway Trust Fund that will soon be broke, President Obama on Wednesday urged lawmakers to overhaul corporate and business taxes to pay for repairing and replacing the nation’s aging roads, rails, bridges and tunnels. […]New legislation to pay for transportation projects is an urgent priority for both parties because the highway fund is nearing insolvency. Anthony R. Foxx, the transportation secretary, has said the fund could begin “bouncing checks” by this summer. That would force a halt to construction projects around the country, officials have said, and could undermine as many as 700,000 jobs.
“[O]ne of the fastest and best ways to create good jobs is by rebuilding America’s infrastructure – our roads, our bridges, our rails, our ports, our airports, our schools, our power grids,” Obama said as part of an unveiling of his $302 billion infrastructure plan. “We’ve got a lot of work to do out there, and we’ve got to put folks to work.”
With an eye towards Congress, the president added, “[I]nfrastructure didn’t use to be a partisan issue – shouldn’t be Democrat or Republican. Everybody uses roads, everybody uses ports, airports. Unfortunately, time and again over the past few years, there have been some Republicans in Congress who refused to act on common-sense proposals that will create jobs and grow our economy. I guess it’s not that they don’t like roads; they just don’t want to pay for them. It doesn’t work that way.”
So what happens now?
Danny Vinik summarized the circumstances surrounding the debate.
Every year, highway transportation spending is funded through the Highway Trust Fund. Revenue for this fund comes from the gas tax, which has not been updated in decades, causing inflation to slowly eat away at it. That has left the fund with a shortfall in recent years, which Congress has covered by moving money from other parts of the budget. The authorization for that funding expires at the end of September, though, so Congress will have to pass a bill to once again cover the funding gap or the Department of Transportation will have to drastically cut back services.Over the next four years, the Congressional Budget Office projects that gap to be $61 billion, nearly 30 percent of the Highway Trust Fund’s expected outlays ($217 billion). The president’s plan covers all of those outlays, including the shortfall, and includes almost $90 billion in additional spending over the next four years, for a cumulative total of $302 billion.
To be sure, Obama’s plan isn’t quite as ambitious as it could be. Indeed, the proposal doesn’t touch the federal gas tax – which policymakers in both parties have been afraid to change for the last 21 years – which would certainly create a lot more revenue for infrastructure.
The New York Times’ report quoted a series of experts, all of whom liked Obama’s proposal, but all of whom agreed it doesn’t go nearly far enough.
But the usual political dynamic is unyielding: congressional Republicans already intend to reject the modest package the White House has put together, preferring their own plan that does even less.