Policy: Economy

The tricky politics of infrastructure spending

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Politics,White House,Brian Hughes,Taxes,Barack Obama,PennAve,Economy,Budgets and Deficits,Spending,Infrastructure

Republicans and Democrats agree: The nation's aging roads, bridges and broader infrastructure network are a mess.

But with the more than $50-billion-a-year Highway Trust Fund expected to run out of money by September, that’s where the agreement ends in a political showdown with major economic consequences.

How to raise money for transportation spending is among the top items on Congress' to-do list before the November midterm elections, and the White House this week started a new campaign to paint Republicans as out of touch on the issue.

As President Obama spoke Wednesday at New York's Tappan Zee Bridge -- one of the nation's most vivid aging roadways -- his message was obvious: The GOP will pay a heavy political price if it blocks his infrastructure push.

“Since when are the Republicans in Congress against Ronald Reagan?" Obama said, highlighting the investments made by the former GOP president on roads and infrastructure funding. Obama is pushing a four-year, $302 billion transportation bill to be funded by closing corporate tax loopholes and adjusting other business taxes.

Republican leaders, including Senate Minority Leader Mitch McConnell, R-Ky., and House Majority Leader Eric Cantor, R-Va., have discussed the need to fix infrastructure spending. But the party has yet to unite behind a concrete plan, and the issue is particularly vexing for conservatives in the GOP-controlled lower chamber.

Traffic, for both parties, is public enemy No.1. And neither side wants to be seen as responsible for halted transportation projects and an estimated 700,000 lost jobs if a deal is not reached.

“That’s like the population of Tampa and St. Louis combined,” Obama said Wednesday in New York.

But Republicans, wary of Obama’s price tag for transportation spending — and with conservatives quick to remind them of the president’s $800 billion stimulus project — have little incentive to approve anything that seems like a tax increase.

But it’s not as simple as Republican versus Democrat. The issue largely swings on the state of infrastructure in an individual lawmaker’s district.

The Senate Environment and Public Works Committee, led by Sen. Barbara Boxer, D-Calif., put forward a proposal this week that would keep in place highway funding for six years at current rates plus inflation.

Highlighting the committee's work, Sen. David Vitter, R-La., focused on the local benefits of the bill.

He pointed out Louisiana “currently ranks 10th in the nation in the most deficient bridges” and that the legislation would prioritize “major projects like I-49 South and LA 1.”

But the Boxer proposal leaves a litany of funding questions.

“Who pays for it is the key here,” said Republican strategist Ron Bonjean. “People in Nebraska aren't necessarily going to want to fund bridge and road improvements in another part of the country.

“The biggest hurdle they have is whether or not Congress would be able to pass a tax increase in this type of climate,” he added.

Conservatives are already raising concerns about how the money in the Boxer bill would be spent.

“The bill would continue to divert federal gas taxes paid by motorists to fund purely local programs and activities that have no relationship to road and bridge improvements,” said Emily Goff, a transportation and infrastructure policy analyst at the conservative Heritage Foundation.

“It continues Congress’ habit of increasing spending when the money is not there, which is one reason why the balance in the Highway Trust Fund is nearly depleted,” she added.

The Congressional Budget Office estimates that the federal gas tax, now 18.4 cents per gallon, would need to increase by 10 to 15 cents a gallon to maintain the current pace of infrastructure spending. Otherwise, lawmakers would need to identify billions of dollars in additional spending on transportation.

Many political observers assume lawmakers will rally behind a short-term fix, basically punting the issue until after the midterms.

Intertwined in the infrastructure debate, however, is the review of the Keystone XL pipeline. Republicans accused Obama of being disingenuous in pushing for infrastructure projects while delaying a pipeline that could carry oil from Canada to the Gulf Coast.

“It’s a real challenge to listen to the president talk about reforming the permitting system,” McConnell said, “when he’s been sitting on the permit for the country’s largest shovel-ready infrastructure program.”

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Brian Hughes

White House Correspondent
The Washington Examiner