Lawmakers will go back to the drawing board for a multi-year transportation bill when Republicans take over leadership of the House in January, but market participants think such a bill may have a chance of squeezing through a divided Congress next year.
The House Transportation and Infrastructure Committee will see a huge change, following the defeat of its current chairman James Oberstar, D-Minn., in his bid for re-election to a nineteenth term in Congress.
The ranking Republican member of the committee, Rep. John Mica of Florida, is expected to take the reins of the 75-member panel.
Mica issued a statement Wednesday saying that, if he is selected to chair the panel, he will focus on speeding up the approval processes for infrastructure projects, “freeing up any infrastructure funding that’s been sitting idle,” and finishing multi-year surface and air transportation bills that have expired but have repeatedly been extended.
Transportation historically has been a bipartisan issue. Sources said that in the next Congress, Republicans could feel some pressure to pass laws instead of blocking Democrats, and transportation could be easier than other laws for the two parties to agree on.
But one of the biggest hurdles to a multi-year bill — which could include a rail component — remains even if a new party controls Congress: finding a revenue source to pay for the it.
As chairman of the committee, Oberstar has sponsored legislation for a multi-year reauthorization that would cost around a half-trillion dollars. The House Ways and Means Committee was charged with establishing the revenue source that would fund it, but the committee did not complete that task before the election.
The option of raising the current 18.4-cent gasoline tax or moving the country to a mileage tax to replace it was nixed by the Obama administration and could be nixed by House Republicans as well.
“If the Republicans slam down the hammer and say, 'Nothing that even smells like a tax increase,’ ” it could be difficult to find enough agreement on a funding source to get a multi-year bill done, said one source.
The revenue source was among the issues that Senate Environment and Public Works chairman Barbara Boxer, D-Calif., who retained her seat, said warranted hearings before a multi-year bill could be introduced in the Senate. While many groups came out in support of raising the existing fuel taxes, under certain conditions, Boxer has said the issue still needs further examination.
However, switching from a flat gas tax to a sales tax on fuel is one possibility that could get some traction as a revenue source for the bill. A sales tax of about 8.4% per gallon would provide enough money to keep existing programs funded but would not cover the costs of overhaul legislation like Oberstar’s.
Mica “is open to considering alternatives, such as the sales-tax concept, as part of the debate in how we move beyond the gas tax,” said his spokesman, Justin Harclerode.
He added that Mica does not support increasing the existing gas tax because it is “growing increasingly obsolete” as a revenue source for the federal highway trust fund that reimburses states for surface-transportation project costs.
On Wednesday, Mica took a critical stance on the Obama administration-driven high-speed rail program, saying he will work to make the country’s passenger rail more “cost-effective” and to create a “better directed high-speed rail program.”
Despite the election of new governors whose positions on high-speed rail are either unclear or unsupportive, there is still hope for the initiative to create a national network of high-speed trains, said Andy Kunz, president and chief executive officer of the U.S. High Speed Rail Association.
“There’s only actually a couple cases where a Republican came out against it,” Kunz said. Those include the now-incoming governors of Ohio and Wisconsin. Kunz said that is “probably not a good thing in general” but that the trains the two incoming governors opposed would run at normal speeds, not high speeds of at least 220 miles per hour.
Kunz pointed to growing support of the rail initiative, which has spawned new industry groups and events, including one later this month hosted by the association.
For airports, the shuffle in Congress could hurt chances for legislation containing higher passenger landing fees and a permanent exemption from the alternative-minimum tax for airport bonds.
The AMT exemption could be extended during the lame-duck session, one source said, though a Republican-led House may be resistant to making it permanent. The passenger fee increase will be “a tougher sell” to Republicans as well, another source said.
