Highway deadline looms as Congress returns

Lawmakers are returning to Washington this week to kick off a monthlong sprint to pass an extension of federal transportation funding set to expire on July 31. 

Transportation advocates have been pushing for an increase in the nation’s infrastructure funding, but Congress has been struggling to come up with a way to pay for an extension that would at least keep the spending levels flat past this summer. 

The deadline is the result of a two-month extension passed in May, in an effort to match up the deadline with the date the Department of Transportation has said its Highway Trust Fund will run out of money. 

{mosads}Transportation supporters hope the twin deadlines will spur lawmakers to opt for a long-term extension instead of another temporary patch. 

“We’ve long said that these short-term extensions are not conducive to the effective and efficient governance of the country,” White House press secretary Josh Earnest told reporters on Monday. 

“It certainly is not an effective way for us to manage the kinds of significant investments in our infrastructure that we know are critical to our economy and critical to the safety of the traveling public,” he continued. “So we obviously would like to see some congressional action on that front.” 

Congress has been grappling since 2005 with a transportation funding shortfall that is estimated to be about $16 billion per year, and they have not passed a transportation bill that lasts longer than two years in that span. 

The federal government typically spends about $50 billion per year on transportation projects, but the gas tax only brings in approximately $34 billion annually. 

The Congressional Budget Office has estimated it will take about $100 billion, in addition to the gas tax revenue, to pay for a six-year transportation funding bill. 

The 18.4 cent-per-gallon federal gas tax has been the main source of transportation funding for decades, but it has not been increased since 1993, and more fuel-efficient cars have sapped its buying power.

Transportation supporters are pushing for a gas tax increase to pay for a long-term transportation bill, but Republican lawmakers have ruled out a tax hike. 

Earnest said a proposal from President Obama to raise revenue for transportation projects by taxing corporate profits stored overseas would be a more politically viable solution to the infrastructure funding problem. 

“I know that the administration has been very clear about what we believe is the best way for us to make investments in infrastructure, and that’s closing loopholes that will generate some revenue that would allow us to not just fund our infrastructure at the current level, but actually to make an expansion of that investment in a way that would have positive benefits for our infrastructure, but also have positive benefits for our economy,” he said.

The Obama proposal, known as “repatriation,” calls for taxing corporate overseas profits at a 14-percent rate to raise money to supplement the gas tax. It is part of a six-year, $478 billion proposal from Obama that has largely been ignored by lawmakers. 

Republicans have said they are open to the president’s repatriation idea, but they have said the taxes should be collected at a lower rate and on a voluntary basis in the form of a “tax holiday” for companies that return profits to domestic banks. 

The Department of Transportation has said, meanwhile, that the Highway Trust Fund will run out of money in late July or early August if Congress does not come to an agreement on an extension in the next couple of weeks.

Lawmakers have turned to other areas of the federal budget to close the transportation funding gap in recent years, resulting in temporary fixes, such as the two-month patch approved by lawmakers in May. 

A $275 billion bill, known as the DRIVE Act, has been introduced in the Senate, but lawmakers in the upper chamber have not revealed how they would pay for the measure. The House has been largely silent on the transportation funding deadline, although GOP leaders like House Ways and Means Committee Chairman Paul Ryan (R-Wis.) and Majority Whip Kevin McCarthy (R-Calif.) ruling out a gas tax hike. 

If lawmakers cannot come up with a way to pay for the long-term transportation bill by the end of July, they will likely have to settle for another short-term patch.