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COVID-19 fallout boosts outlook for long-term infrastructure funding

The FAST Act expires on September 30. Credit: Jim Allen/FreightWaves

The fate of a long-term surface transportation funding bill and a bailout of the Highway Trust Fund – which is on the road to insolvency starting next year – may have reversed course as a result of the COVID-19 crisis, according to a Capitol Hill insider.

Before the coronavirus began pounding the economy over the last several weeks, Jeff Davis, Senior Fellow at the ENO Center for Transportation, doubted that reauthorizing the Fixing America’s Surface Transportation (FAST) Act before it expires at the end of September was in the cards because of the reluctance in Congress to raise the gas tax to pay for it.

Davis contends that a long-term infrastructure bill is the wrong solution to a recession in which there is a short-term collapse of retail demand “where you can’t get [infrastructure] money into the economy fast enough” to make a significant difference within the next fiscal quarter or two.

However, the crisis could influence the reauthorization of existing surface transportation programs such as those contained in the FAST Act “because a recession often means never having to pay for anything,” Davis told FreightWaves. “We’re already running the [federal] checkbook to unseen levels, so raising $150 billion from the U.S. Treasury to restore the Highway Trust Fund [the source of funding for most of the programs in the FAST Act] would likely fall under the radar. You could then buy yourself five more years,” with a long-term reauthorization, he said.


In a March 19 letter to Congressional leaders in the U.S. House and U.S. Senate, the Transportation Construction Coalition, a group of 31 associations and labor unions, asserted that the COVID-19 crisis provides incentive for Congress to move ahead with a $287 billion FAST Act reauthorization passed by the Senate’s Environment & Public Works Committee last July. The House has yet to pass a formal bill of their own.

“The Committee’s unanimous approval of a five-year reauthorization of the federal highway program offers a proactive and meaningful path forward for Congress to deliver an urgently needed economic boost,” the coalition wrote. “In the near-term, additional resources would create and sustain new construction and related industry jobs and tax revenue. In the long-term, the capital assets constructed would enhance economic productivity for many decades to come by providing access to jobs, services, materials and markets.”

Speaking with FreightWaves earlier this week, Mike O’Malley, President of the Railway Supply Institute, said he was “hopeful for a long-term extension that includes significant investment in rail across the board. It’s just a matter of when and how it can get done in the midst of this crisis.”

In a move to immediately address workers across the country who are in danger of losing their jobs, on March 18 President Trump signed into law legislation that requires many employers to provide paid leave while expanding the Family Medical Leave Act for employees.


Congressional leaders, meanwhile, were due to resume negotiations today (Sunday, March 22) on a trillion-dollar-plus spending bill. According to a Reuters report, the package includes direct deposits that could give an average family of four $3,000, loans for small businesses, and up to $4 trillion in liquidity for the U.S. central bank to support the economy.

John Gallagher

Based in Washington, D.C., John specializes in regulation and legislation affecting all sectors of freight transportation. He has covered rail, trucking and maritime issues since 1993 for a variety of publications based in the U.S. and the U.K. John began business reporting in 1993 at Broadcasting & Cable Magazine. He graduated from Florida State University majoring in English and business.