President Obama today proposed a four-year, $302 billion initiative to fund the nation's infrastructure programs, the first time in five years the White House has put a plan on the table to pay for infrastructure improvements.
The White House proposal includes $10 billion for a new multimodal freight grant program to fund rail, highway, and port projects. The program would be conceived and implemented in conjunction with state and local governments, organized labor, and the private sector.
Under the proposal, which will be outlined in the President's upcoming fiscal 2015 budget request, $199 billion would be spent on highway programs, with an additional $7 billion on highway safety. About $19 billion would be allocated to rail programs. The remaining $81 billion would be allocated to mass transit programs and to provide what the White House called "competitive funding," in the form of federal grants, to spur policy innovation.
About half of the total tab—approximately $150 billion—will be paid for by what the White House called "one-time transition revenue" from hoped-for business tax reform initiatives.
The proposed outlay is ambitious. The current re-authorization law, signed in July 2012, allocated $109 billion in funds over 27 months. The law expires on Sept. 30, and the Department of Transportation (DOT) projects that the Highway Trust Fund, the mechanism to finance infrastructure programs, will run out of money in August. The Trust Fund is supported almost exclusively by excise taxes on gasoline and diesel fuel. Fuel taxes have not been raised since 1993.
Rep Bill Shuster, R-Pa., chairman of the House Transportation & Infrastructure Committee, which oversees transportation programs in the House, said a fuel tax increase is off the table. The Administration has little, if any, appetite for a fuel tax hike. In its statement, the White House said it will "work closely with Congress and listen to their ideas" for paying for the program beyond the $150 billion transition funding.
Since it took power, the Obama Administration has been conspicuously absent from the debate over federal transportation funding. The 2012 legislation was mostly hammered out by Sens. James Inhofe (R-Okla.) and Barbara Boxer (D-Calif.) with no input from the Administration.
James H Burnley IV, former transportation secretary under President Reagan and today head of the transportation practice at Washington law firm Venable LLP, said the Administration's proposal is a good starting point. "It would be even more helpful if they would permit DOT to send a draft reauthorization bill to Congress," Burnley added.
