Proposed highway offsets attacked from all sides

The potential offsets for a new round of federal transportation spending that have been proposed by lawmakers in the House and Senate are being attacked from all sides of the political spectrum. 

Lawmakers are facing a July 31 deadline for the expiration of current infrastructure funding, and both chambers are proposing tapping other areas of the federal budget to help pay for an extension. 

The House voted this week to approve an $8 billion extension that relies on $3 billion worth of savings from Transportation Security Administration fees and $5 billion in tax compliance measures to fund road projects through Dec. 18. 

{mosads}The Senate, meanwhile, is considering a longer extension that would take in roughly $80 billion in offsets, which would include $30 billion in savings from a federal employee retirement savings plan, as well as revenue from oil and spectrum sales. 

Both proposals have drawn the ire of conservative and liberal groups in Washington. 

“This is the 34th stopgap since 2008 of short-term funding measures that support the Highway Trust Fund’s chronic overspending,” Heritage Foundation research associate Michael Sargent said in a statement after the House vote, noting the House’s proposal violates the “user pays principle” that normally guides transportation funding decisions.

“The House essentially pushed through a big tax-and-spend plan,” Sargent continued, criticizing in particular the House’s plan to tap TSA fees. 

“Congress should not impose new, unrelated taxes on airline travelers to fund additional spending on transportation programs,” Sargent continued. “The House proposal got it wrong.”

The Senate’s forthcoming proposal, which has not been released yet, is fairing no better with liberals who typically support long-term transportation bills but are opposed to the upper chamber’s plan to tap federal worker pensions to help pay for roads.  

“Transportation infrastructure is the foundation of the U.S. society and economy,” Kevin DeGood, director of infrastructure policy at the Center for American Progress, said in a statement about the proposals that are being floated by the Senate. 

“We must make smart investments that maintain our existing assets and build for the future, and these investments cost money,” DeGood continued. “However, it is deeply troubling that the Senate Republican leadership thinks that investing in America’s economic future should come at the expense of workers’ pensions, families’ homes, and the stability of our communities. Drivers should pay for the benefits they receive from the highways they use every day.” 

Lawmakers are scrambling to prevent an interruption in the nation’s transportation spending at the end of the month, but consensus has been elusive on how the new round of spending should be paid for.  

The Department of Transportation has warned that its Highway Trust Fund will dip below a mandatory critical level of $4 billion at the end of the month. The agency has said crossing that threshold will necessitate a cutback on payments to state and local governments. 

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

The 18.4-cents-per-gallon federal gas tax has been the main source of transportation funding for decades, but the tax has not been increased since 1993 and more fuel-efficient cars have sapped its buying power. 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 nonpartisan Congressional Budget Office has estimated it will take about $100 billion, in addition to the gas tax revenue, to pay for a six-year transit bill.

Transportation advocates have pushed for a gas tax increase to pay for a long-term bill, but Republican lawmakers have ruled out a tax hike. 

Senators have toyed with the idea of including an extension of the controversial Export-Import Bank’s charter, which expired in June, in their version of the new highway bill. 

Republicans in the House have vocally opposed the idea of adding Ex-Im to the infrastructure legislation, setting up a standoff with two weeks to go before federal transportation funding runs out.