Debate, not progress, seen on highway bill

Congress has been stumbling, bumbling and lying to us for the last six years and we are no further ahead on having a sustainable highway bill now that we were when the Democrats took over. It is apparent that Congress is more interested in name calling and arguing and drawing lines in the sand then getting any real work done.

Now the Department of Transportation is worried that states will start slowing down on their highway and transit projects even before this summer when the Highway Trust Fund is slated to start running out of funds. With the September deadline looming as the date for the fund to be out of money, the DOT will be cutting back highway payments long before September when the funds drop below $4 million, now projected to happen sometime in July.

Now the easiest way and most direct way would be to raise the fuel tax that feeds the fund. However, that support by the transportatio and business committees would be politically impossible in this election year. Even though the president has proposed an alternative approach tied to corporate tax reforms this most likely will not happen before the time runs out for the trust fund. The remaining option would be to transfer money from the general treasury to the trust fund to buy time to craft a long-term bill.

Even though this would be the easiest way to handle the trust fund until after the election it is not the most popular one. House Speaker John Boehner has said most of the members of the House oppose this way of handling of the trust fund, but if it could be done, it would set the stage for post-election compromise between the Obama and the Ways and Means Committee Chairman Dave Camp proposals.

Optimists on the Hill point to two things: One, the bipartisan sentiment in the White House, the Senate and the House that the nation’s infrastructure is in dire need of repair and support from Congress; and Two, a convergence between the Obama and Camp proposals.

The President is calling for a one-time infusion of $302 billion over four years for the Trust Fund, with about half of the money, $150 billion, coming from lowering the corporate tax rate.

Camp has a plan to comprehensively reform the tax code that would dedicate $126.5 billion over eight years to the Highway Trust Fund. With this plan there is not enough time left before the elections to get this done. So when you look at this plan you see included a move to repatriate tax dollars from the foreign operations of U.S. corporations. Right now, taxes on earnings and profits from a foreign subsidiary are postponed until the money is distributed as a dividend. Under Camp’s bill these funds would be charged as income and would be spread over eight years.

Sen. Barbara Boxer has had to throw her two cents into this mix and she acknowledged that there is no chance Congress will pass anything to do with comprehensive tax reform this year, but added it may be possible in this lame duck session of Congress to pass just the pieces that would fund transportation. But even that will require bridge building between the administration and the Camp-backed supporters.

Camp was not particularly receptive to the Obama approach at the hearing before the House Ways and Means Committee. The administration holds its proposal is revenue-neutral, but in Camp’s view it is actually a $150 billion tax increase that would put our country further in debt.

There still is the possibility of a compromise, and that is politically attractive to both sides of the aisle and they want to achieve some success as it would help both Dems and Republicans in this election year.

In order to deal with both parties you have to be able to offer something when you come to the table. The one thing both sides agree to is the funds need to be tangible only to transportation and infrastructure. This means every member of Congress can take this back to their constituency as something they were able to accomplish while they were in Washington.

Boxer would have liked to see a bill by this past April, while Camp and Shuster say they are aiming to wrap up work by early summer and have a bill ready for the floor by August.

I still believe that Congress will kick the can once again and transfer funds from the general fund to keep the Highway Trust Fund solvent until the election is over with, so when they return they can move on both of these bills and have something by next spring or mid-summer.

Michael McRae