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May
2014
16

Looming Highway Trust Fund Insolvency Has Leaders, Labor Stumping for Much-Needed Fix

Transportation Secretary Anthony Foxx

Transportation Secretary Anthony Foxx


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Speaking at a Bloomberg Government event this week, Transportation Secretary Anthony Foxx said that bipartisan legislation that would pay for a six-year infrastructure bill by closing overseas tax loopholes is the best option to ensure that the Highway Trust Fund does not run dry by the end of the summer.  Raising the gasoline tax could also provide the funding many experts say, but that approach would not likely to be approved by Congress given the upcoming midterm elections.  The new plan would allow current projects to move forward without fear of delay while other planned projects could commence.

From Bloomberg:

The bill drafted by Senate Environment and Public Works Committee Chairman Barbara Boxer and other members would provide the same amount of money each year as in the current two-year, $105 billion legislation expiring in September, plus inflation. It is silent on the central issue of how to fund projects, a matter being left until later for congressional tax-writers and that threatens the proposal’s chances of making it into law.

House Transportation and Infrastructure Committee Chairman Bill Shuster, a Pennsylvania Republican, has yet to advance a companion proposal in that chamber. The Senate committee plans to complete work on its measure this week.

Companies including Caterpillar Inc. (CAT), United Parcel Service Inc. (UPS) and Honeywell International Inc. (HON) are pushing for a long-term bill, after a 2012 drive on legislation collapsed in a dispute over funding and resulted in the current two-year law that expires at the end of September.

Party politics must be disregarded because of the short timeframe before insolvency, Foxx explained, adding, “The moment is dire.”

Bloomberg describes the severe impact a bankrupt Highway Trust Fund would have on the economy:

The Transportation Department has said the Highway Trust Fund is projected to dip below the critical level of $4 billion as soon as July. That could cause a slowdown in reimbursements to states and a halt in some construction work. It’s on track to fall below $1 billion by October, he has said.

As many as 700,000 jobs would be lost over a year as the trust fund starts to reach the point where it can’t pay its bills, and that about 112,000 roadway projects and 5,600 transit projects could be delayed or halted, according to the Obama administration.

Reiterating this argument was President Obama himself who spoke over the hum of traffic crossing the Tappan Zee Bridge, north of New York City on Wednesday.  It is the site of a $3.9 billion project to replace the 60-year old structure which handles over 138,000 cars daily.  As we reported last October, the project will be the largest infrastructure project the state of New York has undertaken in decades.  President Obama used the bridge as an example of what can happen when the government decides to act.  

The Obama administration fast-tracked the project when it held simultaneous reviews by several agencies. This earned it approval in a year and a half as opposed to the normal three to four year process.  

During his speech, President Obama called on Congress to pass his four-year, $302 billion transportation plan, but said the White House was open to alternative proposals if they helped stave off the fiscal cliff facing the Highway Trust Fund.  He specifically called out congressional Republicans for delaying action: “If you want to tell them what you think about that, don’t worry because usually they show up at ribbon cuttings of projects they refuse to fund.

The President noted that without action the current funding would dry up at the peak of construction season and put almost 700,000 jobs at risk.

Several business and labor groups are pushing for a renewed focus on infrastructure spending as well.  Unions are advertising in states where work is needed the most, according to Bloomberg:

The Laborers International Union of North America yesterday announced a $1 million expenditure on billboards and radio and online ads in Pennsylvania, Ohio and Michigan. All three states have some of the nation’s oldest, crumbling roads and bridges, said Terry O’Sullivan, LIUNA’s general president.

“Another short-term patch simply duct-taping the roads and bridges we drive on must be off the table,” O’Sullivan said at a news conference yesterday.

A bipartisan coalition of elected officials, surprisingly, is going the social route:

Another group, Building America’s Future, has developed a mobile-phone application that allows people stuck in traffic to choose a message of complaint from a drop-down menu to send to their lawmakers as they wait for the gridlock to clear. The app, “I’m Stuck,” will be expanded as an offering to more users in coming months, said Marcia Hale, the president of the group that is led by former Pennsylvania Governor Ed Rendell and former Transportation Secretary Ray LaHood.”

Secretary Foxx appeared on the Rachel Maddow show Wednesday night to discuss the looming crisis.

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