House GOP proposes scaled-back highway bill
Rep. John Mica, chairman of the House Transportation and Infrastructure Committee, on Thursday unveiled a downsized Republican proposal to spend about $230 billion over six years to restructure and fund surface transportation programs that support highway, rail and transit construction, as well as safety initiatives.
The amount is half what his Democratic predecessor proposed in 2009 when the multiyear transportation authorization expired. But Mica said during a press conference that reforms to the grant-making process for states would double the bill's value by reducing waste.
The proposal represents a 35 percent cut from the $286 billion funding level laid out in the previous SAFETEA-LU spending blueprint passed in 2005.
Transportation advocates have been frustrated by the numerous short-term extensions Congress has passed during the past two years in lieu of a long-term bill that gives states certainty about funding streams so they can embark on large projects confident they will get reimbursed by the federal government.
Lawmakers and the administration have been preoccupied with other major issues such as the deep recession, health care and the war in Afghanistan, but the primary sticking point has been over how to pay for massive infrastructure needs when the nation is facing a debt crisis and tax receipts from fuel and other sources are shrinking.
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Mica has repeatedly expressed a desire to get a bill passed by the end of the summer, but many political observers are skeptical that can be accomplished this year given the political divisions over taxes and the size of government, and the legislative calendar. The chairman, however, suggested that Republican leaders might shorten the summer recess to get work done on pending issues.
He said the full text of the Republican bill would be released after a July 12 hearing on reauthorizing highway and transit programs.
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The bill will authorize spending of about $35 billion per year, which is the amount projected to be available in the Highway Trust Fund into which gasoline and diesel taxes flows. Congress had to bail out the HTF with $35 billion from the general treasury the last three years because there was not enough money coming in to meet existing commitments because the bad economy reduced driving and drove greater use of fuel-efficient vehicles.
Mica said he is constrained from spending more by rules imposed by the Republican leadership when they took control of the House last winter that forbid programs to exceed revenues available in trust funds. The rules also state the House Ways and Means Committee is responsible for determining revenue levels for bills.
A $35 billion annual expenditure would put the six-year spending level at $210 billion. It is unclear where the extra $20 billion mentioned in a news release comes from.
Among the ways Mica and his Republican colleagues propose to increase the purchasing power of the $35 billion are:
' Supporting infrastructure banks at the state level instead of the Obama administration's call for a national institution that finances meritorious projects.
' Eliminating red tape that delay projects.
' Devolving more responsibility to states.
' Consolidating or eliminating 70 programs that are duplicative or don't serve a federal purpose.
' Making two federal loan programs more flexible.
'Given U.S. House rules and budget constraints, this proposal maximizes the value of our available infrastructure funding through better leveraging, streamlining the project approval process, attracting private sector investment, and cutting the federal bureaucracy,' Mica said in a statement. 'Most importantly, this six-year proposal provides the stability states need to plan major transportation improvements and create long-term jobs.'
The bill encourages states to create and capitalize infrastructure banks to provide loans for transportation projects. A federal infrastructure bank would create another layer of bureaucracy instead of letting states make their own decisions about which projects to support, Mica said. Several states, such as Virginia, already have set up such banks.
The Transportation Infrastructure Financing and Innovation Act (TIFIA) is an infrastructure credit assistance program designed to leverage non-federal sources of money with low-interest loans for highway and intermodal projects. The Railroad Rehabilitation and Improvement Financing program (RIIF) was established in 1998 to provide low-interest loans and loan guarantees for railroad projects, primarily to support small railroads. Both programs have been underutilized because the application process is considered too complicated and burdensome. The Federal Railroad Administration has only doled out $400 million in loans out of $35 billion in available guarantees.
The Republican plan would broaden participation in TIFIA, loosen project eligibility requirements, allow TIFIA to pay for an increased share of a project's costs, expedite the approval process, and raise the program's budget authority to $1 billion. It would also make the RIIF application process easier, broaden eligibility, increase transparency into the loan decision and provide more flexible loan terms.
Mica said big savings are anticipated from streamlining the approval process for projects that receive federal aid, primarily by requiring federal agencies to conduct environmental reviews concurrently rather than consecutively. Project delivery is also expedited by delegating more decision-making authority to states.
By his calculations, the bill is equivalent to a $75 billion-per-year-bill under the previous system — even more than the preliminary version of a transportation bill in the Democratic-controlled Senate that provides $52 billion annually, and which Mica values at $65.5 billion because of ways it tries to reduce duplication.
'At a time when our national transportation system is heading toward a crisis, short-sighted Republican proposals that would recklessly underfund important infrastructure projects just don't make sense,' Sen. John D. Rockefeller, chairman of the Senate Commerce, Science and Transportation Committee said. 'We need a better solution to put our transportation programs on the right track for the future. As I see it, we have one real option to rebuild our economy and fully invest in our transportation infrastructure — a plan that combines smart, targeted spending cuts with smart, targeted revenue increases. I'm fully prepared to discuss spending cuts, but we can't do it without additional revenues, too, and we shouldn't pretend otherwise.'
Rep. John Duncan, chairman of the highways and transit subcommittee, said the new rules, expedited contracting methods and setting hard deadlines for federal agencies to approve projects could cut in half the time for completing environmental and other reviews that causes some projects to take up to 15 years to complete from planning to construction. Getting projects up and running faster helps the economy by creating construction jobs and facilitating business activity, as well as making safety enhancements available sooner, he said.
'One of the most important aspects of this proposal is that it provides predictability for states and public transit agencies to plan for multiyear projects,' said Rep. Chris Hanna, the subcommittee's vice chairman. 'The stimulus forced states to focus on short-term projects like pavement resurfacing and guard rail replacements. The long-term certainty provided by a long-term bill empowers states to take on major projects including bridge replacements, highway interchange improvements and investment in our nation's transit systems. These types of projects will provide jobs for years to come and have the potential to have a real impact on the unemployment rate in the construction industry.'
The bill also provides states the flexibility to fund their highest priority projects, but holds them accountable for those decisions through performance measures.
Some have suggested Congress pass a two-year surface transportation bill as a temporary solution to keep programs going while thorny issues are ironed out. Mica said the country can't afford to do that because the Highway Trust Fund is headed to bankruptcy within two years if spending exceeds revenue, and could be supplanted with a system in which fuel taxes go into the General Fund and transportation is subject to the vagaries of the appropriations process unless it's fixed.
'This long-term plan is the only fiscally responsible proposal and will ensure the continued solvency of the Highway Trust Fund,' Mica said.
The bill includes for the first time a maritime component that supports domestic shipbuilding, expansion of short-sea shipping as an alternative to truck transport, greater coordination between agencies overseeing maritime transport and eliminating the Harbor Maintenance Tax for domestic moves of international cargo from the first port of arrival. And it requires that money in the Harbor Maintenance Trust Fund be fully expended each year to fund channel dredging and other backlogged improvement projects.
The plan does not cut any funding for highway safety and motor carrier safety programs. States would be allowed to toll new lanes on the Interstate Highway System, but not existing lanes.
The draft bill doesn't include any dedicated funds for freight infrastructure. Mica said he would use the coming weeks to try and include a provision to allow states to increase sizes and weights of trucks on the highways
Meanwhile, Mica and Duncan asked Democrats, who are asking for higher spending levels, to appear with them before the Ways and Means Committee to discuss revenue issues.
'Like other highway interests, ATA would like to see a more robust bill, but we believe the current funding constraints are forcing an important refocusing of the surface transportation program on core programs in the national interest, as well as a greater emphasis on improving program efficiency and performance,' said Bill Graves, American Trucking Associations president, in a statement.
'We are very pleased to see the level and type of reforms Chairman Mica lays out, particularly those prohibiting tolling of existing interstates; maintaining funding for highway safety programs; maintaining a policy of no earmarks; eliminating requirements on states to fund non-highway activities; and consolidating programs.'
The Bipartisan Policy Center, which has put forth recommendations for more performance-based programs and other reforms, applauded Mica's initial effort, but said it needed to go further, and set specific national goals against which scarce resources can be targeted.
The U.S. Chamber of Commerce favored the programmatic reforms, but expressed disappointment that the bill does not address the funding shortfall given the need to address the nation's deteriorating infrastructure.
'Disinvestment results in a less competitive economy and a drag on GDP due to underperforming infrastructure,' it said. 'Regardless of reforms, allowing a 35 percent cut in highway and transit investment will affect the availability and condition of infrastructure, the quality of service, and the capacity to handle future growth. Transportation needs will not disappear but conditions will get worse, and the cost to address them will be higher as materials, labor, and land get more expensive.'
The nation's largest business federation endorsed the Senate Environment and Public Works initial proposal that maintains current funding levels, and said a two-year program could work if $12 billion in additional resources were identified.
The American Association of Port Authorities cheered Mica's project streamlining initiatives and the decision to include a chapter on maritime and port-related investments in the bill. It added that freight transportation deserves a higher prioritization in funding decisions.
The American Association of State Highway and Transportation Officials said it supported many of the efforts to accelerate project delivery and give states more tools to leverage transportation funds, but added that it is worried about proposed funding levels in the bill.
The Transportation Trades Department of the AFL-CIO called the Republican outline 'the worst highway and transit funding bill in modern history,' adding that investment cuts and efforts to privatize services will lead to further job losses.
The outline of the Republican transportation proposal is available here. ' Eric Kulisch