July 14, 2014 11:53 pm

White House backs Republican highway plan

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The White House has thrown its weight behind a Republican-led proposal to avert a highway crisis by finding new sources of money to refill a rapidly depleting federal construction fund.

The Obama administration, which has warned that it would have to start cutting road and bridge financing next month, said on Monday that it backed a funding bill moving through the Republican-controlled House of Representatives.

The bill would inject as much as $11bn into the Highway Trust Fund – which disburses money to state governments – by making changes to companies’ pension contributions, customs fees and by redirecting other funds.

The Obama administration had been pushing for a long-term, six-year patch for the highway fund using tax revenue derived from the repatriation of international earnings by US multinationals, a plan deeply unpopular with big business.

Its announcement on Monday signalled that it was willing to settle now for a less ambitious plan that will simply push the deadline for the next “highway cliff” away from the busy summer construction season and beyond November’s midterm elections.

“This legislation would provide for continuity of funding for the [fund] during the height of the summer construction season and keep Americans at work repairing the nation’s crumbling roads, bridges and transit systems,” the White House said.

The bill is opposed by the Club for Growth, a conservative group that is loosely allied with the Tea Party movement. A similar bill is advancing in the Democratic-controlled Senate.

The federal programme for highways and bridges finances 6,000 construction projects around the US.

This legislation would provide for continuity of funding . . . during the height of the summer construction season and keep Americans at work repairing the nation’s crumbling roads, bridges and transit systems

- The White House

It has traditionally been funded by a national petrol tax of 18.4 cents per gallon. But that is not indexed to inflation and has not been lifted in more than 20 years. The revenue it generates has also been depleted by improved fuel efficiency and the fact Americans are driving less than they used to.

The White House stressed that the House proposal provided only a “short-term fix” to the problem. “It does not address the continued need to pass a long-term authorisation bill that creates jobs and provides certainty for cities, states and businesses,” it said.

The bill came from Dave Camp, who is the House’s main tax writer as chairman of the chamber’s Ways and Means committee. The House is expected to vote on it this week.

In a message sent on Monday, the Club for Growth urged legislators to oppose the proposal. “This bill uses budget gimmicks and fee increases to bail out a wasteful and inefficient programme that shouldn’t even exist. If House leaders were serious about fiscal responsibility, they should promote comprehensive reforms that will prevent a future bailout from occurring,” it said.

It said members of Congress should consider sponsoring an alternative bill that would reduce the federal gas tax and devolve most transportation authority to state governments.

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