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American Shipper

House passes 2-month transportation funding bill

Short-term legislation extends DOT spending authority through July, but still leaves long-term funding fix unaddressed.

   The U.S. House of Representatives on Tuesday passed a two-month extension for highway, transit and related safety programs that are set to expire at the end of May.
   The vote was 387-35.
   Many lawmakers and industry groups are lamenting the fact that Congress cannot pass a multi-year surface transportation reauthorization bill that would provide funding certainty for states to improve the nation’s deteriorating roads and bridges, and add capacity where needed. The Highway Trust Fund has a projected $60 billion shortfall over the next four years because users fees, collected through gas and diesel taxes and truck excise taxes, are not keeping up with inflation and higher fuel economy of vehicles. The motor fuel taxes are assessed on a per gallon basis and have not been adjusted since 1993.
   A six-year bill has a projected $90 billion shortfall, according to the Congressional Budget Office.
   The government only receives about $40 billion a year from taxes and user fees, but is spending more than $51 billion a year on surface transport programs, including federal highway aid to states.
   Congress is ideologically split over issues such as taxes and the size of government, and there seems to be no consensus on raising the gas tax or finding another source of revenue to augment existing receipts.
   The last surface transportation bill, MAP-21, expired early last fall, at which time Congress passed a nine-month extension to maintain spending levels and pumped $11 billion into the Highway Trust Fund through a series of accounting measures and transfers from the General Fund. Since 2009, Congress has bailed out the Highway Trust Fund to the tune of $65 billion.
   MAP-21 itself was only a two-year bill, as opposed to the traditional five- or six-year bills that allowed states to commit to major projects with the knowledge that funds would be available to reimburse them for the federal share of the construction costs.
   The last time Congress passed a long-term transportation funding bill was SAFETEA-LU in 2005.
   According to the Department of Transportation, there is an $808 billion backlog of investment needs on highways and bridges, including $479 billion in critical repair work.
   President Obama’s GROW America proposal is for a six-year, $478 billion transportation package, with a one-time windfall of funding anticipated from possible tax reform that would encourage corporations to bring home foreign earnings in exchange for being taxed at a lower rate.
   The Highway Trust Fund is not scheduled to run out of money until August, but the legal authority to allocate new money expires on May 31.
   Some states have already put the brakes on new projects out of concern that the Department of Transportation later this summer will be no longer be able to fully reimburse them or, at the very least, that those DOT payments will be late.
   Rep. Jerrold Nadler, D-N.Y., said congressional leaders claiming the need for fiscal austerity are hurting the nation’s development while at the same time preparing to vote on a tax extenders bill that will cost $182 billion over 10 years.
   “The priorities of this Congress are completely out of whack,” Nadler said in a statement. “I am concerned that we will pass this two month extension and be right back here in July, having the same conversation.”
   The Senate is likely to vote on the two-month extension late Thursday before Congress takes a week-long recess, Jeff Davis, senior fellow at the Eno Center for Transportation, said.

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