Congress Finally Has a Highway Bill. It Wouldn't Fix Anything.

The bill contains policy certainty for states, but Congress has no solution for how to fund it.

National Journal

With just over a month left before transportation programs are set to expire, the Senate has a bill on the table that would set state spending levels for roads and bridges all the way out to 2021.

On the surface, this appears to grant states some certainty after having watched Washington plan highways through a string of last-minute, short-term extensions. But while the bill would direct states on how to spend their highway dollars and sets new policy on matters like environmental reviews and a backlog of funding for freight facilities, it doesn't do anything to actually provide the dollars that states will have to spend.

The Senate Environment and Public Works Committee released a bipartisan bill Tuesday that would offer six years of highway and transit policy for state transportation agencies. Delivering the actual funding for that policy, however, depends on the Finance Committee coming up with new revenue to supplement the fading federal gas tax, and there, lawmakers still haven't reached an agreement.

The "Developing a Reliable and Innovative Vision for the Economy Act," or DRIVE Act, is scheduled to be marked up Wednesday, and with support from Environment and Public Works Chairman James Inhofe and ranking member Barbara Boxer, is expected to pass easily.

Sponsors and supporters applauded the bill for finally offering the kind of stability that states want after years of stopgap measures on highway funding. Congress passed a 27-month funding bill in 2012 and has since been keeping the spigot open through a series of short-term extensions. This week's bill would even give states some extra money, setting levels at about 3 percent more per year than previous levels, for a total funding level of between $260 and $270 billion over six years.

But it's all rhetoric without a financing plan to pad the depleted Highway Trust Fund. That plan would have to come from the Finance Committee, and there, lawmakers are far apart.

Highway programs are currently funded through the 18.4-cent federal gas tax, but raising it is a political nonstarter, and it hasn't been indexed to inflation. That's left the trust fund facing bankruptcy without an injection of cash or a permanent source of revenue, and there's no guarantee that anything the Finance Committee comes up with will match up with the desired policy.

"I doubt that we'll get to six years; it's going to be pretty hard to do that. I'm just hoping for multi-years," said Finance Committee Chairman Orrin Hatch Tuesday. "We've got to find the funding one way or the other, and if we can't find it for a six-year bill, then clearly we've got to reduce" the bill.

The latest short-term extension extended funding out to July 31, giving Congress until the end of next month to pass some type of legislation or else leave states without transportation dollars during peak construction season. Democrats have been hammering Republican leadership for weeks to do something, saying in a press conference last week that they want a long-term deal by mid-July.

"If they don't meet this timetable, it will be very hard for us to do another short-term extension," said Sen. Chuck Schumer of New York, laying out a 45-day timeline at a press conference last Thursday.

Lawmakers are well aware of that pressure—and they're hoping that having some actual programs on the table will make it harder for anyone to turn down a long-term bill. "The clock is ticking," said Boxer, a California Democrat, tossing the ball back to the Finance Committee. "There are three other committees, and both sides of the aisle, and they have to do their part as well. "¦ I think we need to do even more, but what a wonderful start this is."

The Banking and Commerce committees both contribute language to the Senate transportation bill, although the bulk of it comes from EPW. No other committee has come out with its own bill, which could collectively add as much as $90 billion to the final total.

Sen. Thomas Carper of Delaware, who sits on both EPW and the Finance Committee, had a more colorful illustration for the problem. "As important as this legislation is "¦ the other thing that's important is we have the ability to fill up the tank of this beautiful vehicle that's represented in this legislation," Carper said. "We can make this trip a whole lot faster and a whole lot smoother, and by doing that we can really drive this economy."

The funding issue has loomed over transportation for years as the federal gas tax has brought in increasingly diminishing returns. The last long-term bill that passed in 2012 was funded with the dregs of the Highway Trust Fund and a series of funding gimmicks, punting a decision on how to finance programs long-term.

Congress has transferred $62 billion in general revenue to supplement the gas tax, and the Congressional Budget Office has projected that it would take an $11 billion transfer next year to keep programs at current levels.

Boxer has put her clout behind a repatriation proposal that would bring in companies' overseas profits to pad the Highway Trust Fund, but Inhofe has dismissed the idea as a one-time fix for a long-term problem. Speaking Tuesday, Hatch said he was not behind that idea.

And while the Senate has tried to lean hard into a long-term solution, the House seems resigned to moving another short-term bill. Ways and Means chairman Paul Ryan has said he's against raising the gas tax, but at a hearing last week he offered no alternative solutions.

It's a series of hurdles that would seem insurmountable, especially with just five weeks left before the end of July. So what makes this time different? Simple pressure, said Inhofe.

"When this House and Senate start doing the proper thing and prioritizing, this jumps way out in front," said the Oklahoma Republican. "That's what happened in the 27-month bill [in 2012], and that's going to happen again."