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Dueling Transport Bills Loom

JUL 6, 2011 7:05pm ET
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WASHINGTON — Leaders of the House and Senate transportation committees are preparing two significantly different bills to reauthorize highway and transit programs after the current law expires on Sept. 30.

Sen. Barbara Boxer, D-Calif., chairwoman of the Senate Environment and Public Works Committee, and Rep. John Mica, R-Fla., chairman of the House Transportation Committee, are nowhere near each other on the amount of money they want the federal government to spend on transportation or on how many years to provide funding.

At a press conference on Wednesday, Boxer told reporters her committee would finish writing a two-year, $109 billion bill in "a couple of weeks." She is positioning her plan as a jobs bill.

"Congress must decide in the coming days which path to choose: protect jobs and put people to work, or throw hundreds of thousands of people out of work in a sector that has suffered enormously during the recession," Boxer said. Half a million construction jobs would be lost if Congress passes the transportation spending cuts proposed by lawmakers in the House, she added.

Boxer says her $109 billion bill will maintain current funding but will fall short of the $12 billion of revenue needed to pay for it over the two years. The gap would occurs, in part, because of insufficient revenues in the Highway Trust Fund.

Boxer said she is negotiating with the Senate Finance Committee, chaired by Sen. Max Baucus, D-Mont., on where to find the extra money. She told reporters that the wind-down of the wars in Afghanistan and Iraq, which cost $12 billion a month, could fill the gap.

Meanwhile, Mica met with reporters the same day to preview the six-year bill he plans to roll out Thursday, which he says "goes in the opposite direction" from Boxer. Mica said his bill would propose spending backed mostly with $35 billion of annual revenue from the Highway Trust Fund. The $35 billion would be almost $2 billion less than the projected revenue of the fund, according to the Congressional Budget Office.

Mica said that while Boxer favors a national infrastructure bank, he plans to propose funding for state infrastructure banks, so states "don't have to come on bended knee to Washington for approval." The state banks would be allowed to join together for cross-border projects.

He said he will submit recommendations for other revenue-raising measures to the House Ways and Means Committee, but declined to be specific or say if they will include a proposal for Build America Bonds that would be issued solely to finance transportation projects.

"I have to deal with the cards that are dealt to me," Mica told reporters. But his political hand may not be strong. He was set to meet with House Republican leaders later in the afternoon. The transportation bill has already been left off the list of things that Majority Leader Eric Cantor wants to do before September. GOP leaders may want further changes in Mica's proposals.

"Everything hinges on the House leadership and how they handle it in face of all their other priorities and not add to the deficit," according to Ken Orski, who publishes Innovation NewsBriefs on transportation.

The one area of agreement between Boxer and Mica is that the Transportation Infrastructure Finance and Innovation Act program should be expanded. They each propose providing $1 billion per year to TIFIA, which Mica said could be leveraged to provide up to $120 billion for construction projects over six years.

The Boxer and Mica proposals fall far short of President Obama's fiscal 2012 budget proposal for a six-year, $500 billion transportation program.

Money is the problem in putting together a transportation bill. It just isn't there.

"I don't think there's any consensus on the revenue provisions and how to fund it," said Melissa Loesburg of ISI Group's Washington watchers.

Gasoline tax receipts are falling and won't provide the Highway Trust Fund with enough to finance the current level of transportation spending. And it's politically impossible to raise the gas tax.

Actual transportation spending for 2011 has been authorized at $52 billion. Using just the trust fund revenues, annual spending would fall to $36.9 billion. But some money has come from general revenues, especially from the stimulus law.

Orski questions the focus on current spending. "The last two years have been way out of scale with what occurred earlier," he said. Returning to pre-stimulus spending levels, "while not insignificant, would not be catastrophic."

The whole political calculus of transportation spending has changed, according to Deron Lovass, transportation policy director at the Natural Resources Defense Council. "The way this bill traditionally moves, it's a big investment bill," he said. "There's money in it that provides for additional capacity and there's enough money in it to make all 50 states or at least most of them happy."

Now, the math doesn't add up. There's not enough money to keep everybody happy.

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New York's budget leaves it at risk of becoming one of only five states that do not allow the use of design-build procurement to deliver public infrastructure projects.

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