Obama Proposal Doubles Federal Highway Spending, Taxes Offshore Funds
With about two months left before funding runs out, the Department of Transportation sent President Obama’s $80 billion per year transportation proposal to Congress Monday.
The GROW AMERICA Act would provide $478 billion for transportation projects over six years, almost doubling annual federal transportation spending from its current level of $50 billion, according to a DOT press release.
To pay for the increased spending, the Obama proposal envisions supplementing gas tax revenues with “a one-time 14 percent transition tax on the up to $2 trillion of untaxed foreign earnings that U.S. companies have accumulated overseas,” otherwise known as a repatriation holiday. (RELATED: Repatriation Funding Won’t Fix Highway Funding Shortfall, Critics Say)
Currently, the 18.4 cents-per-gallon federal gas tax, which is supposed to finance transportation spending, only covers about $34 billion, forcing Congress to shore up the Highway Trust Fund from general revenues.
“It is unclear how much attention the plan will receive on Capitol Hill,” according to an article in Transport Topics, which noted that Republicans are already working on a long-term funding proposal of their own.
Over six years, the plan would provide “$317 billion to invest in our nation’s highway system and road safety,” as well as “$115 billion to invest in transit systems and expand transportation options,” such as light rail, streetcars, and buses, a DOT fact sheet claims. (RELATED: Mike Lee Would Send Highway Funds to the States)
Most of the remaining funds—a little over $46 billion—would be spent on “a multi-modal freight program that strengthens America’s exports and trade,” as well as various high-speed rail projects that the DOT predicts, “will provide 80 percent of Americans with convenient access to a high-performance passenger rail system within 25 years.”
Transportation Secretary Anthony Foxx expressed optimism about the plan’s chances in Congress, saying, “It is clear to me that transportation is still a bipartisan issue, and I am really encouraged to see members of both parties working to get something done.” (RELATED: Rep. Delaney Seeks Bipartisan Support for Highway Funding Bill)
Most Republicans have been resistant to raising the gas tax to pay for transportation projects, and although some GOP lawmakers, including Sen. Rand Paul, have indicated a willingness to consider using a repatriation holiday to finance a long-term highway bill, others claim the revenue from such a holiday would likely fall far short of projections.
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