Funding remains a hurdle for latest highway bill push

Comments foreshadow challenges as gas tax revenues fall short of infrastructure needs

Sen. Shelley Moore Capito, R-W.Va., left, is raising alarms about paying for a major highways and transit push in Congress. (Tom Williams/CQ Roll Call file photo)
Sen. Shelley Moore Capito, R-W.Va., left, is raising alarms about paying for a major highways and transit push in Congress. (Tom Williams/CQ Roll Call file photo)
Posted February 24, 2021 at 4:38pm

The ranking Republican on the Senate Environment and Public Works Committee Wednesday cautioned against trying to pay for a massive infrastructure bill through the budget reconciliation process, saying it could put at risk one of the few policy areas where both Republicans and Democrats agree. 

The comments by Sen. Shelley Moore Capito of West Virginia could foreshadow what will likely be the most insurmountable hurdle to any infrastructure bill: money. The Highway Trust Fund, which is paid for through federal gas taxes, has not sufficed in paying for highway needs, and has required $140 billion in transfers from general revenue since 2008, according to the Tax Policy Center. That fund pays for both highways and transit.

“The strong bipartisan support that exists for a surface transportation reauthorization bill and other infrastructure legislation should not extend to a multi-trillion dollar package that is stocked full with ideologically driven, one-size-fits-all policies that tie the hands of states and communities,” she warned during what will likely be the first of many hearings on infrastructure legislation. 

She added that she felt she needed to make the cautionary comments in light of unspecified statements Senate Budget Chairman Bernie Sanders, I-Vt., made to the media “on the direction the bill may go,” she said.

The collapse of the highway bill would stand in contrast to the five-year, $287 billion measure that the Senate EPW committee approved unanimously in July 2019. That bill, though universally praised in committee, never received a floor vote in the Senate, forcing Congress to extend the current highway law through October 2021.

Since then, the committee leadership has changed hands, with a new chairman, Sen. Thomas R. Carper, D-Del., and Capito both indicating they’d start a new bill from scratch. 

There’s little appetite to increase the 18.3-cent-per-gallon federal tax for gasoline or 24.3-cent tax for diesel and kerosene, even though the rate has not increased since 1993. President Joe Biden has vowed not to increase taxes on those making less than $400,000 a year, and Transportation Secretary Pete Buttigieg, who signaled at his confirmation hearing a willingness to look at all options, later clarified through a spokesman that he was not willing to raise the gas tax.

The tax is rapidly becoming obsolete, Sens. Kevin Cramer, R-N.D., and Lindsey Graham, R-S.C. pointed out during the hearing.

Cramer, noting that the boom of electric vehicle production and revenue stream created by the gas tax “obviously intersect and conflict at some point,” asked witnesses Victoria Sheehan, president of the American Association of State Highway and Transportation Officials, and Michigan Gov. Gretchen Whitmer what they envisioned for a future funding source for highways.

Both witnesses punted, saying Congress would have to make that decision, with Sheehan adding that she doesn’t “envy you the challenging work you have ahead of you to identify a sustainable source of revenue for the Highway Trust Fund.”

'Major societal change'

Graham was blunter, noting General Motors' plan to stop producing gas-powered vehicles by 2035. “That is a major societal change,” he said. “Whatever we do with the trust fund, we need to capture the fact that most cars by the middle of the century, 2050, probably won't run on gasoline. That’ll be good for the environment, but it will certainly require us to put new infrastructure in place and redesign the trust fund.”

Carper, who indicated he wants to mark up the bill no later than Memorial Day, vowed to craft a bill with a sustainable method of paying for it, signaling he’ll support a pilot program that would shift the nation to charging vehicles based on miles traveled rather than through the federal gas tax.

But he cautioned that the committee would need “a bridge or more likely several bridges” to get to a full deployment of a vehicle-miles-traveled fee system. The Senate Finance Committee has jurisdiction over how to pay for the highway bill, which it never took up in the last Congress, and Carper called on that committee — as well as Senate Commerce, which oversees safety, and Senate Banking, which oversees transit — to engage in the process quickly.

Sanders was silent on how to pay for the bill during the hearing, simply emphasizing the need to repair crumbling roads and bridges and arguing an infusion of dollars in federal infrastructure would rejuvenate the economy. “Count me in,” he said, adding “in the very divided political climate in this country I think we can come together at least on this issue.”

Sen. Debbie Stabenow, D-Mich., hinted at a big infrastructure push, asking witnesses what the impact would be of investing the entire $836 billion backlog for highways and bridges and $122 billion in transit. 

“It would create immediate economic stimulus across the country,” Sheehan replied. “Jobs in transportation are good-paying jobs and given the impact of the COVID-19 pandemic, investing in infrastructure will truly help us build back better.”