DALLAS The Obama administration has no Plan B for the revenue that would be needed to support its proposed $478 billion, six-year transportation measure if Congress fails to pass its corporate tax reform proposals, Transportation Secretary Anthony Foxx said Thursday.
“The ball is in Congress’ hands,” Foxx said in his testimony during a hearing by the transportation subcommittee of the House Appropriations Committee.
The subcommittee is reviewing President Obama’s $95 billion budget request for the Department of Transportation for fiscal 2016, which would start on Oct. 1. Fiscal 2016 would be the first year of the president’s six-year transportation plan, which overall would be supported by $240 billion of gasoline tax collections and $238 billion from a temporary transition tax on corporate foreign accumulated earnings.
Foxx said the Transportation Department has prepared no alternatives to the revenue that would come from the president’s proposed corporate tax reforms.
“The budget request is our budget request,” Foxx said to Rep. Thomas Rooney, R-Fla.
Revenue from the president’s tax reform proposal would provide funding for only six years while transportation needs would continue, subcommittee Chairman Mario Diaz-Balart, R-Fla., noted.
“What good is all this added investment if the Highway Trust Fund goes broke?” he said. “Even if the corporate repatriation legislation is passed, the Highway Trust Fund would be insolvent again in seven years.”
The current transportation funding law, which provided a 10-month extension of the HTF’s solvency was accomplished with a transfer of $11 billion from the general fund, but will expire May 31.
Foxx conceded that the HTF’s gasoline tax revenues are inadequate and unsustainable, but said that doesn’t overcome the need for the increased transportation funding in the six-year proposal.
“Our transportation funding is antiquated,” he said. “If corporate tax reform is a fix, at least it’s a longer term fix than the 32 short-term extensions we’ve had over the past six years.”
The Transportation Department's budget request of $94.7 billion for fiscal 2016 would provide $51 billion for highways and other surface transportation projects, an increase of $10 billion from fiscal 2015, and $18 billion to transit, an increase of $7 billion.
The tax reform package includes a 14% transition tax on multinational firms’ accumulated foreign earnings and a 19% minimum tax on their future foreign earnings.
Legislation incorporating the long-term transportation proposal will be submitted to Congress in the next few weeks, Foxx said. The plan is a revised version of the four-year GROW AMERICA Act from 2014, he said.
Overall, the six-year plan would provide $317 billion for roads and bridges and more than $143 billion for transit and passenger rail. It includes $28.6 billion for high-performance and other passenger rail projects, and $18 billion for multimodal freight programs.
The transportation proposal includes $7.5 billion for the Transportation Investment Generating Economic Recovery (TIGER) discretionary grant program and $1 billion a year of credit assistance through the Transportation Infrastructure Finance and Innovation Act (TIFIA).
