After 10 years and 35 extensions of other extensions, both the Senate and House have passed infrastructure bills. This week, committees from both chambers are conferencing on a reconciliation of the two bills. The last extension expires this Friday, and the predictions are that a completed bill will be on President Obama’s desk by Thanksgiving (even though it may take another extension to get there).The bills are similar in that they both provide for about $300 billion in programs that will address highway and bridge issues. (President Obama had asked for $428 billion.) The major issue in both is that while the terms of the two pieces of legislature are six years, funding is provided for only three. This almost guarantee another funding crisis at the end of three years; but at least it is a start.

Once again, both the House and Senate rejected amendments to increase the fuel tax. While this is the most logical solution to the funding problem, it has also been the most unpopular among legislators. The tax has not been increased since 1993, and is not indexed to inflation. Combined with the better gas mileage of newer automobiles, this has resulted in a shortfall of over $70 billion since 2008. This stonewalling of a tax increase however, is not likely to change in the foreseeable future.

Because of the similarity of the two bills, the conferencing should go quickly, although some of the fund raising methods are a little quirky. For example, one provision assumes that $9.1 billion can be raised by selling oil form the strategic reserves for $89 per barrel. Since this is about twice the current price, don’t look for a long line of buyers.

Another assumes another $5 billion can come from the IRS use of private bill collectors to collect back taxes. Since that didn’t work the last time they tried it, it is not likely to work this time. (The use of private bill collectors is not likely to add warmth and sensitivity to the process either.)

As with other major pieces of major legislature, we are likely to see a number of amendments totally unrelated to highway funding. It will be interesting to see what they are. One we know about is the provision to restart the Export-Import Bank which is included in both bills. Another will require the DOT to stop the publication of the safety ratings of truck and bus companies. Industry leaders say they are flawed and unfair, but safety organizations are strongly opposed to the elimination of their publication.

Certainly, the legislation is not perfect. It underfunds the problems, the availability of the funding is a big issue, and there are other shortcomings, as well. But finally, Congress did something; and anything is better than what we have been enduring. The U.S. currently ranks 28th in the world for infrastructure spending. If you live in Washington, DC, you spend 82 hours annually in traffic delays, 80 hours in Los Angeles, and 61 in Chicago.


Written By: Clifford F. Lynch