House transportation plan tied to controversial revenue sources

November 17, 2011
By Stephen Lee Davis

An emerging House proposal for a multi-year transportation bill, highlighted at a press conference today by Speaker John Boehner, is already raising strong concerns due to the stated intent to fund the massive shortfall in gas tax revenues for transportation through controversial increases in oil drilling and speculative energy exploration.

It’s encouraging to hear House leaders say they intend to move forward with adopting a multiyear investment plan for transportation infrastructure that moves away from a 30 percent cut and toward full funding. But attaching the transportation bill to deeply contentious drilling proposals could lead to partisan gridlock and sidetrack long overdue transportation legislation — a stark contrast to the transportation bill marked up in the Senate just last week with a unanimous bipartisan vote.

While the Speaker’s press conference this morning was very short on details about the length or price of the bill, they did make it clear that their intent is to try and cover the shortfall in the Highway Trust Fund through expanded oil drilling and exploration. That plan would certainly face immediate opposition from Democrats and moderates in the House and Senate.

There are serious questions, however about the amount of funding that could be raised over the next five years through this approach. As Sen. James Inhofe — the Republican co-sponsor of the Senate’s bipartisan bill – has noted, it is unlikely drilling-related revenues would come close to closing the existing transportation funding gap, and would not be available for several years. (New oil drilling could bring in perhaps a billion dollars over the life of the energy bills, and not for several years, according to recent scoring by the Congressional Budget Office. The shortfall is well over $50 billion over the life of this bill.)

In his response, Sen. Inhofe made it clear that expecting new oil drilling revenues to pay for an immediate multi-year transportation bill isn’t a realistic funding solution for this bill.

“While Speaker Boehner’s idea may be a long-term revenue source for transportation infrastructure,” Inhofe said, “we need to focus on the immediate problem of how we will fund a multi-year highway bill. …If this is how the House is able to move the bill forward then I applaud them. But we need money now for transportation; we can’t afford to wait.”

Calling the transportation bill an “important Republican jobs initiative”, Rep. John L. Mica (R-FL), chairman of the House Transportation and Infrastructure Committee, offered his priorities for authorization in a statement:

“It is my hope to mark up in the coming weeks a solid blueprint for the future of America’s transportation that will do the following: significantly streamline the process for projects by cutting red tape and unnecessary federal paperwork; consolidate duplicative federal transportation programs; provide flexibility, authority and responsibility to states and local governments to move transportation projects forward; and increase the ability to leverage financial resources and encourage more private sector participation in building infrastructure.”

Transportation for America has long advocated for the idea of tying the bill to an “oil fee” in the past. Our proposal was quite different, though, designed to ensure that any additional revenue from a fee on oil would increase the efficiency of the transportation system and help give people expanded options that can reduce the nation’s oil dependency. This idea received majority support from the public in a poll of ours, and two-thirds of those polled supported if it came with a cut in the tax at the pump.

Because details of the bill have not been released, it’s unknown whether any new revenue would be applied to a sound investment strategy. We look forward to an opportunity to review the draft legislation and will continue to work with transportation leaders in the House and Senate to see that a bill gets enacted as soon as possible.

The American Energy & Infrastructure Jobs Act will be H.R 7, a number reserved for one of the Speaker’s bills, when it moves sometime before the end of the year, according to the timeline presented today.