Lawmakers Push Bond Bank For Road Work

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DALLAS - A bipartisan group in Congress wants to replenish the almost insolvent Highway Trust Fund with revenue from a corporate foreign-earnings tax break until a long-term funding solution can be developed.

Reps. John Delaney, D-Md., and Mike Fitzpatrick, R-Pa., said in a letter sent Friday to their colleagues that the one-time revenue could support $50 billion of 50-year bonds to provide low-interest loans to states and local governments for highways, water projects, and school facilities.

"We write today to call your attention to both the insolvency of the Highway Trust Fund and efforts to use one-time revenues from repatriated earnings as a temporary funding," they said.

The highway portion of the HTF had an $8.4 billion cash balance on March 28, the Transportation Department announced Tuesday, down from $8.6 billion at the end of February. The highway account may be depleted in July and could run a $51 million deficit by Sept. 30, the end of fiscal 2014, DOT said. The transit account has a cash balance of $3.2 billion and is expected to end fiscal 2014 with a $1 billion balance.

Delaney filed the Partnership to Build America Act, H.R. 2084, in 2013. A companion bill, S. 1957, was introduced in the Senate in January by Sens. Michael Bennet, D-Colo., Roy Blunt, R-Mo. and others. The measure has the support of six Democrats and seven Republicans in the Senate and 31 Democrats and 31 Republicans in the House.

"This kind of true bipartisan support is rare for bills with such huge economic impacts," Delaney and Fitzpatrick said.

The America Infrastructure Fund proposed by the bills would be capitalized with $50 billion of taxable American Infrastructure Bonds issued by the DOT. Corporations buying the bonds could for bring up to $6 of foreign earnings into the United States with no federal tax liability for every $1 of bonds. The bonds could pay no more than 1% and would not be guaranteed by the federal government. The repatriated revenue should be used to increase the investment in infrastructure, Delaney and Fitzpatrick said. The $50 billion of bond proceeds could be leveraged to provide $750 billion infrastructure funding, they said.

"Merely continuing with our current level of infrastructure spending will not be enough to place us on a path of growth and prosperity in our economic future," they said. "This will make it cheaper for states and local municipalities to finance their infrastructure projects."

Sen. Patty Murray, D-Wash., chairman of the Senate Budget Committee, said on Tuesday that the latest numbers on the decline in the HTF "should be a wakeup call" for Congress to act.

"I'm hopeful that Democrats and Republicans can act on bipartisan proposals that would use corporate revenue to shore up the trust fund to keep those construction projects up and running, and our economy moving," she said. "We cannot stand by, as the Highway Trust Fund nears critically low levels, and lose new investments in our roads and bridges, especially when these are the very projects that ensure businesses can move their goods quickly and efficiently and help ease congestion for commuters across the country."

Last week Murray predicted a domino effect on transportation projects from coast to coast if the HTF runs dry this summer before the current two-year funding bill can be renewed.

"The Highway Trust Fund is heading toward an avoidable crisis as early as July, and if we don't act, could lead to a construction shutdown on our nation's roads and bridge," she said on April 8.

Some states are already delaying highway projects because of the funding uncertainty, Murray said.

"In Arkansas, 10 construction projects, like building highway connections and replacing bridges, have already been put on hold" and Colorado officials are reluctant to go ahead with a highway widening project between Denver and Fort Collins for the same reason, she said. "More states, from Vermont to California, might have to stop construction in its tracks because of the Highway Trust Fund shortfall."

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