Given the current polarized climate in the US Congress, the chance that both sides will agree on a long-term transportation bill are slim to none, according to former US Transportation Secretary Ray LaHood.
If a new bill isn’t passed before the current transportation bill expires, it could affect many freight transportation and logistic processes, LaHood said during a recent conference call hosted by the investment firm Stifel Nicolaus.
The current transportation bill is set to expire at the end of September and the Highway Trust Fund will probably run out of funding by the end of August. If that happens, Congress may have to transfer money from the US general fund into the HTF or risk a disruption in the nation’s freight transport system.
Political Friction Blocking Progress
Transportation funding has traditionally always been a political football. The last transportation bill had to be extended 26 times before a new transportation bill was passed. Currently, there are no bills in the transportation committees of either the House or the Senate.
LaHood — who served as President Obama’s transportation secretary for more than four years and currently is Senior Policy Advisor at the global low firm DLA Piper — said that scenario is becoming increasingly likely given the contention between Democrats and Republicans on Capitol Hill.
“The current Congress is not in a mood to pass a multi-year transportation bill and is certainly not in a mood to try and figure out how to fund infrastructure in America,” LaHood said. “The gas tax … needs to be raised and has not been since 1993, when it was raised under President Clinton and a Democratic Congress and with a great deal of debate.”
The nation’s transportation infrastructure already is reeling from a brutal winter, which left many roads and bridges in poor condition.
LaHood said part of the solution was to raise the federal gas tax, but that’s something neither side wants to advocate for fear of offending voters in a mid-term election year.
“The gas tax has been our pot of money used to build the country’s infrastructure and interstate,” LaHood said. “We need to raise it but we can also look at other forms of funding like vehicle miles traveled, tolling, public-private partnerships, the TIFIA loan program or the TIGER progra, which Congress has funded at $500 million. I believe it is going to be difficult to accomplish much legislatively this year, given the abysmal record of Congress addressing big issues.”
Transportation Spending Could Boost Economy
LaHood’s former boss, President Obama, has stated that rebuilding the nation’s transportation infrastructure would help job creation and improve the national economy overall. He has asked for $320 billion to be spent on infrastructure over the next four years.
But LaHood said the White House’s chance of getting that bill passed are not very good right now because every member of the House and many Senators are up for reelection.
“That does not change the fact that we need a multi-year, comprehensively funded transportation bill and voters need to make their case to their elected representatives about it,” he said.