DALLAS --Treasury Secretary Jack Lew sees a growing consensus in Congress on funding federal transportation spending with revenues from some form of corporate tax reform.
"I think there's actually broad bipartisan interest on doing more on infrastructure," Lew said last week at a forum sponsored by the Peter G. Peterson Institute for International Economics in Washington, D.C. "It's never been a partisan issue. What's challenging is we how to pay for it and how to break through gridlock."
Lew said he favors President Obama's proposed four-year, $302 billion transportation plan that would be funded with $150 billion of one-time revenues from corporate tax reform.
The president's proposal would solve two national problems at once: "It's the deal with a broken business tax code and infrastructure by doing business tax reform, taking the one-time revenues that come in a transition to new provisions, [and] use that as a large down payment for an infrastructure investment program," he said.
Lew said he is optimistic that a long-term funding solution will be found because both sides know that robust transportation systems are essential to a modern economy.
"I think there's a kind of emerging bipartisan view," he said. "You look at the president's outline for business tax reform, it overlaps 70% to 80% with the plans put out by congressional leaders of both parties," Lew said. "You look at the interest in funding infrastructure, strong views on both sides. I believe that there's a majority in Congress that knows it's the right thing to do and wants to do it."
Congressional proposals include a draft tax code reform from Rep. Dave Camp, R-Mich., chairman of the House Ways and Means Committee. The Camp plan would provide $126.5 billion over eight years to the chronically insolvent Highway Trust Fund with a one-time tax on some corporate earnings and offshore profits of foreign subsidiaries of U.S. corporations.
Rep. Sandy Levin, D-Mich., the ranking Democrat on the House panel, is sponsoring legislation that he contends would generate almost $20 billion of new revenue for the HTF from changes in how U.S.-based corporations' foreign earnings are taxed.
Sen. Barbara Boxer, D-Calif., chairwoman of the Senate Environment and Public Works Committee, sent a letter last week to Camp and Levin requesting action on proposed transportation funding options before the current congressional term ends in December.
Levin shares Boxer's concern about inaction by the Ways and Means Committee on a long-term solution to the highway fund's solvency, said spokesman Josh Drobnyk.
The committee has not held a single hearing on highway funding proposals since Republicans became the majority party in 2011 and there has been no response from Camp to several letters this year from Levin and others asking Camp for hearings on highway funding, he said.
"Committee Democrats have repeatedly urged chairman Camp to hold hearings on the matter so that the committee could begin a serious discussion about the issue," Drobnyk said.
A new report released by the International Monetary Fund contending that increased investments in public infrastructure is one of the few things that can promote growth in advanced economies created a buzz at a recent high-level Group of 20 finance track meeting in Washington, Lew said.
"They did a paper in infrastructure that makes a case quite compellingly, that if you invest in the right things now it leads to a stronger economy in the future and as a byproduct almost, it grows demand in the short term," he said. "That was a big topic of conversation at the G20 meeting."
"In many advanced economies there is still substantial economic slack and interest rates are at historic lows, which means a bigger bang for the buck for such investment," IMF said.
