By Kathleen Hennessey and Michael A. Memoli, May 14, 2014
President Obama speaks near the Tappan Zee Bridge, which is being
replaced. "First-class infrastructure attracts first-class jobs,” he
Without quick action by Congress, the U.S. Transportation Department
may begin scaling back or halting work on thousands of roads, bridges
and other infrastructure projects at the height of the construction
season this July, when the nation's Highway Trust Fund is expected to
But as recent spending battles in Washington have shown,
finding bipartisan cooperation to prevent the fund from becoming
insolvent will be no easy task, particularly in an election year.
standoff is the latest example of partisan gridlock on Capitol Hill,
reminiscent of similar battles over the budget. Some are already
referring to the transportation funding deadline as the "highway cliff,"
a reference to the 2012 fight over expiring tax rates and the debt
On Wednesday, President Obama prodded Congress to move quickly,
calling infrastructure investment essential to the nation's economic
"First-class infrastructure attracts first-class jobs,"
Obama said, standing against the backdrop of one of the nation's most
ambitious infrastructure projects, New York's aging Tappan Zee Bridge
and its partially built $4-billion replacement.
Failure to agree
on new funding sources will put at risk more than 112,000 highway
projects, 5,600 transit programs and nearly 700,000 jobs, the White
In addition to keeping federal funds flowing,
lawmakers must come up with a longer-term solution to close a projected
$16-billion annual shortfall in the trust. But key figures on Capitol
Hill remain at odds over how to make up the gap.
Washington finds itself in this jam because taxes on gasoline and
diesel fuel, which provide 90% of the revenue for the Highway Trust
Fund, no longer raise enough money to support the programs, in part
because cars have become more fuel-efficient.
Congress last passed
a major transportation bill in 2012, authorizing spending on such areas
as public transit and safety programs. Major business groups and labor
unions are pushing lawmakers to pass a longer-term package. Some
lawmakers are also eager to renew the bill because it would give them an
opportunity to trumpet the role of the federal government.
Lawmakers are only now taking their first steps. Sen. Barbara Boxer
(D-Calif.), chairwoman of the Senate Environment and Public Works
Committee, announced a bipartisan proposal this week that would keep
highway spending at existing levels, indexed for inflation, for six
years. But the plan was silent on the key question of how to replenish
the trust fund, leaving that to the Senate Finance Committee.
previous two-year transportation bill tapped the Treasury to make up for
a projected gap, but the highway fund ran dry faster than anticipated.
proposed solution would increase the current 18.4-cent-per-gallon gas
tax. Federal fuel taxes have not been raised since 1993, but doing so
this year seems unlikely when the entire House and more than a third of
the Senate are up for election.
Rep. Bill Shuster (R-Pa.),
chairman of the House Transportation Committee, has yet to put forward a
proposal. Rep. Dave Camp (R-Mich.), the departing chairman of the Ways
and Means Committee, called for dedicating $126.5 billion to the trust
fund as part of a major overhaul of the nation's tax code, which would
fully fund highway projects for eight years.
The White House has also called for replenishing the trust fund through an overhaul of the corporate tax system.
is an area where there is bipartisan interest," Transportation
Secretary Anthony Foxx told reporters this week. "It's just that we have
to play this out and work hard every day to make progress on it."
But prospects for a major deal on tax reform are dim, and time is running out.
uncertainty is troubling," said David Parkhurst, staff director for the
National Governors Assn.'s office of federal relations, noting that
states are likely to bear the brunt of any funding lapse.
states have spent the money. The states have paid the bill," Parkhurst
said. "If the trust fund shortfall goes down to zero and the federal
government is unable to make those cash reimbursement payments to the
states for work already done, the states are on the hook."
While waiting for Congress to act, Obama said his administration is
speeding up infrastructure projects by streamlining permits and
improving transparency. The result would increase job growth, repair
crumbling infrastructure and keep the U.S. competitive with its rivals,
The president cast the issue as bipartisan, but blamed
Republicans for cutting funds for building projects and refusing to work
with him out of political spite. "Usually they show up at
ribbon-cuttings for projects they refuse to fund," Obama said. "I
guarantee you they will have more than enough to disagree with me about.
But let's not fight on something we all know makes sense."
Obama spoke in New York, Vice President Joe Biden was in Cleveland
holding his second event in as two days as part of the administration's
Also this week, the Laborers' International
Union of North America announced a $1-million effort that will include
radio ads pressing Congress to act.
"Another short-term patch —
simply duct-taping the roads and bridges we all rely on — must be off
the table," union General President Terry O'Sullivan said.
of a major breakthrough, the most likely scenario is for lawmakers to
tap the Treasury again to avoid insolvency in the fund this year. But
even that may be a fight, particularly from Republicans who insist that
new spending be offset by cuts.
"Even getting to a patch is not
easy," said Marcia Hale, president of the Building America's Future
Educational Fund, which advocates greater infrastructure spending.
"That's a tough vote for some people."