DOT Secretary Foxx sends transportation bill to Congress

Earlier today, United States Department of Transportation (DOT) Secretary Anthony Foxx sent a long-term transportation bill, entitled, the GROW AMERICA (Generating Renewal, Opportunity, and Work with Accelerated Mobility, Efficiency, and Rebuilding of Infrastructure and Communities throughout America) Act, to Congress for consideration.

This bill is being released during a challenging time on the federal transportation front, as the clock continues to tick on the soon-to-be-expiring MAP-21, the current bill set to expire at the end of September and the depleting resources of the Highway Trust Fund, the primary source of federal transportation funding.

DOT officials said that this bill reflects the White House’s vision for a four-year surface transportation reauthorization bill that would create millions of jobs and lay the foundation for long-term competitiveness, rebuilding crumbling roads and bridges while providing much-needed certainty for local and state governments and addressing the country’s future needs.

And Secretary Foxx added in a statement that “Failing to act before the Highway Trust Fund runs out is unacceptable – and unaffordable. This proposal offers the kind of job creation and certainty that the American people want and deserve. I have been pleased to see that members of both parties are already working together to solve these challenges, and I look forward to continuing our discussion and to supporting and building on the good work that’s already been done.”

Myriad components of the GROW AMERICA Act dovetail a plan rolled out by Foxx and President Obama in February, which was a four-year, $302 billion bill dubbed the “Vision for 21st Century Infrastructure” and would be paid for, in part, by using $150 billion in one-time transition revenue from pro-growth business tax reform “to address the funding crisis facing our surface transportation programs and increase infrastructure investment. This amount is sufficient to not only fill the current funding gap in the Highway Trust Fund (HTF), but increase surface transportation investment over current projected levels by nearly $90 billion over the next four years, the White House said in February.

Other components of the GROW AMERICA Act that have garnered bipartisan support in the past include:
-Addressing the shortfall in the Highway Trust Fund and providing an additional $87 billion to address the nation’s backlog of deficient bridges and aging transit systems;
-Creating millions of new jobs to ensure America’s future competitiveness;
-Increasing safety across all modes of surface transportation, including increasing the civil penalties the National Highway Traffic Safety Administration (NHTSA) can levy against automakers who fail to act quickly on vehicle recalls;
-Providing certainty to state and local governments that must engage in long-term planning;
-Reducing project approval and permitting timelines while delivering better outcomes for communities and the environment;
-Bolstering efficient and reliable freight networks to support trade and economic growth; and
-Creating incentives to better align planning and investment decisions to comprehensively address regional economic needs while strengthening local decision-making

In letters to House Speaker John Boehner (R-Ohio) and Senate Majority Leader (Harry Reid, Secretary Foxx said that the White House endorses serious, bipartisan efforts in Congress to address the near-term crisis regarding the pending expiration of Highway Trust Fund revenues and related lack of funding certainty to build and repair critical transportation infrastructure projects needed to move people, energy, and freight.

To that point, the GROW AMERICA Act, like February’s “Vision for 21st Century Infrastructure,” is a four-year, $302 billion reauthorization that Foxx said would allow state and local governments to effectively plan and execute transformative transportation projects that improve U.S. competitiveness and provide for an $87 billion increase over current spending from the Highway Trust Fund in addition to the aforementioned components.

Of notable interest to supply chain and freight transportation stakeholders in the bill is a proposal for $10 billion over four years focused on a dedicated freight funding program for a multimodal freight grant program for railways, highways, and ports projects, which Foxx said in his letter address the greatest needs for the efficient movement of goods.

“This proposal incudes significant incentive grant opportunities, as well as competitive discretionary grants to encourage coordinated investment in freight infrastructure,” wrote Foxx. “Shippers, representatives from truck, rail, and other industries, and representatives from associated labor organizations will have meaningful seats at the table in directing these investments.”

The called for $302 billion for this bill––with transportation funding, long viewed as a thorn in the name of legislative progress over the years––is subject to the Statutory Pay-As-You-Go (PAYGO) Act which would account for $70.1 billion from 2015-2024 and to pay for it the White House is proposing to supplement current revenues to the new Transportation Trust Fund with the one-time savings generated from transitioning to a new business tax system that is simpler and more efficient.

Foxx explained that the transition to this system will generate temporary revenue by taking into account the $1 trillion-$2 trillion of untaxed foreign earnings that U.S. companies have accumulated overseas, repealing the LIFO inventory method and reforming accelerated depreciation. He also noted that the President’s FY 2015 Budget includes $150 billion allowance for these one-time savings, which the White House is proposing to use for the Highway Trust Fund shortfall and offset the costs of the bill.

Despite this ambitious agenda, some industry stakeholders are pessimistic when it comes to the prospects of a badly-needed long-term bill coming to fruition. The reasons for this vary, but a proven funding mechanism is the missing link to a long-term bill, according to many shippers and carriers.

Leadership at the American Trucking Associations (ATA) was largely underwhelmed by myriad components of the GROW AMERICA Act.

“President Obama has talked more about the need to address our critical infrastructure deficit than any president in the past 20 years,” ATA President and CEO Bill Graves said in a statement. “While the President’s plan supports a growing program, we cannot help but be very disappointed in much of the plan his administration has put forward. Any proposal that moves away from a user fee funded transportation system is not going to be acceptable to the American trucking industry, period. Furthermore, we have real questions about the viability of the administration’s plan to use one-time proceeds from an unspecified and unlikely to pass corporate tax reform idea, along with inefficient highway tolling or private capital financing,” Graves said. “The focus must be on real, long-term funding answers rather than repeatedly looking for the proverbial ‘nickels in the couch cushions.”