Shipper pressure helps produce late progress on highway bill

Almost 1,000 days after the current federal-aid highway bill expired and nine short-term temporary funding extensions later, Congress was finally making some progress on a longer-term transportation bill.

Thanks in part to heavy last-minute lobbying by the U.S. Chamber of Commerce, as well as other groups including freight transportation shippers, House and Senate conference committee members were furiously at work to produce a multi-year bill before the current funding mechanism expired on June 30.

At press time, Republican leaders in the House and Senate Democratic leaders were expressing some optimism amid reports of some progress on what in the past has been routinely bipartisan legislation. But in the current polarized political climate in Washington, nothing is routine and bipartisan any longer.

Transportation lobbyists involved in the last-minute negotiations said Congressional leaders were making “some progress” on some issues before the June 30 deadline. But they warned there were still many unresolved contentious issues remaining and election year politics could stall the process and result in another short-term, six-month funding extension.
 
“They’re making some progress, finally,” Randy Mullett, senior vice president of government relations for Con-way Inc., a $5 billion transportation company, told LM. “There’s a glimmer of hope. But there’s still a long way to go.”
  
Just before press time, Senate Majority Leader Harry Reid, D-Nev., said talks were progressing and he was somewhat optimistic that an agreement could be reached. Democrats were warning that as many as 3 million construction jobs were hanging in the balance.
  
On the House side, Majority Leader John Boehner, R-Ohio, who earlier was threatening to defer on a longer-term bill until after the November 6 elections, shifted course and was sounding an optimistic note.
     
“House Republicans want to get a highway bill done,” Boehner said. “We just want to make sure it’s a bill that includes real reforms to ensure that taxpayer funds are paying for legitimate projects that support economic activity, not planting more flowers in beautification projects around the country.”

Funding for flower beds is not really the reason Congress has punted on this issue for nearly three years since the last long-term bill expired. Instead, major disputes over transportation funding and non-transportation issues, such as the Keystone XL pipeline construction project, were the major remaining hurdles.
  
Still, transport lobbyists were hailing the late progress on the measure. Janet Kavinoky, executive director of transportation and infrastructure for the U.S. Chamber of Commerce, congratulated House and Senate leaders for making progress finally.
    
“It is time for Congress to pass a transportation reauthorization bill and send it to the president for his signature,” Kavinoky said. “We are increasingly confident that this agreement will include critical reforms that will greatly improve the business of transportation investment in this country.”
  
In addition, the shipper group NASSTRAC issued a statement urging Congress to act now.

“Without efficient trucking service that can accommodate projected future demand for high quality freight transportation, shippers will be forced to devote increasing capital expenditures to inventories and warehousing for safety stock,” NASSTRAC said in a letter to all House-Senate conferees. “The result will be less money to spend on investments, growth and jobs, and higher prices for consumers, as supply chain efficiency declines.”

The question remains how best to pay for that efficiency.
  
The Highway Trust Fund collected $36.9 billion in taxes and interest in 2011, while it sent out $44.3 billion in payments, according to Congressional Budget Office figures. Some $36.7 billion went to highways and $7.6 billion to mass transit.
    
The balance of the trust fund was expected to be $5.5 billion by Sept. 30, the end of fiscal year 2012, compared with $14.3 billion in 2011, according to a March CBO estimate. The main funding mechanism is the federal tax on motor fuels – 18.4 cents on gasoline, 23.4 cents on diesel – which has been unchanged since 1993. There is no appetite on either side of the aisle to raise those taxes in an election year.