House passes (another) stop-gap highway patch

Legislators had hoped to pass a multi-year bill by Thanksgiving, but instead opted for a measure to extend federal transportation spending through Dec. 4 to avoid a funding shutdown when the current three-week authorization expires Friday.    The U.S. House of Representatives approved by voice vote Monday a measure to extend federal transportation and infrastructure spending through Dec. 4 to avoid a funding shutdown when the current authorization expires Friday.
   The Senate is expected to vote on the short-term extension of highway funding by the end of the week as well. If passed, the patch will prevent an interruption in federal infrastructure spending, but industry advocates argue all these stop-gap measures paralyze state spending due to widespread uncertainty regarding funding. The legislation also includes provisions to reauthorize the Export-Import Bank, whose charter expired on June 30 and has left many exporters struggling to close export deals without the loan guarantees and insurance it provides.
   The current three-week bill, which extended the expiration of federal transportation spending until Friday, Nov. 20, was signed by President Obama on Oct. 29 just hours before the previous short-term authorization was set to expire.
   Lawmakers said at the time the additional three weeks would give them enough time to reconcile differences between the House’s six-year, $325 billion Surface Transportation Reauthorization and Reform (STRR) Act of 2015, passed Nov. 6, and the Senate’s DRIVE Act, which passed back in July.
   Both bills, however, only include guaranteed funding for the first three years because legislators are hesitant to raise motor fuel taxes, the primary revenue source for the Highway Trust Fund, and have been unable to agree on an alternative source of funds for transportation projects. Federal gas and diesel taxes haven’t been raised since 1993 despite falling revenues due to inflation and consumers driving more fuel efficient vehicles.
   The Department of Transportation estimates a shortfall of about $96 billion – $16 billion per year – in the HTF over the life of a six-year spending bill.
   The latest highway patch does not require any new funding because (almost as if they knew this might happen) lawmakers included enough money in the three-month transportation bill approved in July to last until the end of the year in case they needed more time to finish a multi-year bill.
   Rep. Bill Shuster, R-Pa., chairman of the House Transportation and Infrastructure Committee and the sponsor of the temporary measure, said in a statement following the voice vote that negotiators from both chambers of Congress are moving toward a unified spending bill and was optimistic a deal would get done before this one runs out.
   “The House and Senate are making good progress in resolving differences between their respective multi-year surface transportation reauthorization proposals,” Shuster said.
   “The conference committee needs the time necessary to meet in public, complete negotiations, and produce a final measure that helps improve America’s infrastructure,” he added. “This clean extension provides time for that process to occur and for the House and Senate to vote on the final legislation, without shutting down transportation programs and projects in the meantime.”
   Congress hasn’t passed infrastructure funding legislation lasting longer than two years since 2005, opting instead for a series of short-term spending extensions despite protests from transportation industry advocates.
   In a letter, Sen. Tom Carper, D-Del., a proponent of raising the gas and diesel fuel tax, on Tuesday urged House-Senate conference negotiators to back away from plans to pay for the transportation system by raiding unrelated federal dollars from other parts of the federal government.
   “User fees in the form of federal excise taxes on gasoline and diesel fuel have supported our nation’s transportation system for over half a century, and helped us to build the Interstate Highway System, which can be said without exaggeration to be among the most significant civil works projects in the history of the world. However, since 2008, we’ve strayed from this user-pays approach, relying on nearly $75 billion worth of budget gimmicks, unrelated offsets, and debt to prop up the Highway Trust Fund that pays for transportation investments,” he said.
   “This is simply the wrong way to pay for our infrastructure. It’s not unfair to ask the individuals and businesses who use our transportation system to help pay for it. In contrast, the offsets currently included in the House and Senate legislation will increase costs for American families and businesses even though they do not directly raise transportation user fees. Millions of Americans will be forced to pay more for airline tickets, international travel, mortgages and a host of other services as a result. Moreover, these offsets are not permanent solutions, and we will be forced to confront this intractable problem again in a few short years. I therefore urge you to move away from these provisions and consider opportunities in this bill to restore the purchasing power of our federal user fees by gradually increasing gas and diesel taxes by a modest amount. This is the fairest, fastest, and most efficient way to raise the revenues we need to embark on a significant nationwide effort to rebuild and renew our country’s infrastructure. 
   “In particular, certain offsets are particularly objectionable. Making changes to the dividend payments made to members of the Federal Reserve System would have significant impacts on the Federal Reserve’s stock structure and could fundamentally alter how some banks are regulated. Including this offset without any hearings or official consideration could lead to any number of negative unintended consequences, and I urge you to reject this idea. 
   “The House’s inclusion of language eliminating the Federal Reserve’s surplus capital account is also troubling. This offset is a budgetary gimmick that would not actually provide any new net funding to the Treasury. In fact, instead this provision will ultimately increase future budget deficits and lose money for the Treasury,” Carper said.
   Carper, who is also ranking member of the Committee on Homeland Security and Government Affairs, said he’s “opposed to provisions in both proposals to extend by two years increased rates for the fees the Transportation Security Administration is authorized to collect to help cover cost of transportation security at airports. While I support extending these rates, the revenue should be dedicated to improving transportation security and reducing wait times at airports, not used for unrelated highway and transit spending. Further, the provisions would use tomorrow’s dollars to pay for today’s problem. Siphoning off TSA funds for highways will eventually lead to additional airline fee increases to help pay for needed security investments. 
   “Similarly, while I support proposals to index duties and user fees on imports collected by the Customs and Border Protection (CBP), these Customs user revenues should continue to be dedicated to CBP staffing and inspection activities at ports of entry to strengthen border security and decrease wait times in support of robust trade and travel.”
   Carper’s policy priorities for the bill include a freight investment program paid through both formula grants and merit-based, discretionary grants that has contract authority; allowing states to test new user-based funding mechanisms to help augment the troubled Highway Trust Fund; providing states flexibility to explore tolling of new or existing highways to fund infrastructure improvements; earmarked funding for the Congestion Mitigation and Air Quality program aimed at reducing diesel pollution; and continued support for public transit.
   The National Association of Manufacturers has also let conferees know what it would like to see out of a final bill.
   It prefers a bill that is shorter than six years, but accounts for inflation and other adjustments through higher funding levels than a flat-funded measure over six years. It also said the Transportation Infrastructure Finance and Innovation Act, a popular tool for public-private partnership projects, should be supported at the Senate’s higher funding level.
   NAM urged negotiators to keep the port-performance provision in the Senate-passed version, adding that collecting basic, uniform data is important for making sure ports are equipped to handle future economic growth and increased trade. It also voiced support for allowing the nationwide use of twin 33-foot trailers (up from 28 footers) to alleviate congestion and move more freight with fewer trucks.
   The trade association said senators should accept the House pilot program that provides an opportunity for a small number of states to substitute state laws and regulations for federal equivalents when it comes to environmental review and approvals for infrastructure projects, so that projects can be started faster.
   “A well-funded, long-term transportation authorization has been an elusive goal for many years now and manufacturers welcome the House and Senate’s commitment to infrastructure,” NAM said in its letter. “Years of short, medium and long-term extensions have short-changed the potential for our nation to modernize its infrastructure base. Manufacturers encourage conferees to achieve a conference agreement as expeditiously as possible. 
   “Ensuring the free-flow of interstate and international commerce is a federal responsibility that cannot be neglected. As the world’s largest manufacturing economy, the United States requires a well-funded, multi-year investment in its transportation systems to keep us competitive with our global trading partners,” the trade association said.