Congress will try next week to stave off the exhaustion of the national fund that pays for roads and bridges.
Both chambers are set to hold hearings on the highway trust fund, which would run out of money by the end of July if Congress doesn’t find more funding for it.
The hearings called by Sen. Orrin Hatch, R-Utah, and Rep. Paul Ryan, R-Wis., in the Senate Finance and House Ways and Means committees likely will focus on examining long-term solutions to the problem of funding highway infrastructure.
The trust fund, financed by the gasoline tax, has required numerous bailouts from general revenues in recent years, as inflation has chipped into the value of the 18.4-cents-a-gallon tax and Americans have turned to more fuel-efficient cars.
Top lawmakers have said that closing the long-term funding mismatch is a priority. House Minority Leader Nancy Pelosi hinted on Friday, after scuttling a trade bill sought by President Obama, that a “robust highway bill” would be the price of her support.
A short-term patch, intended to buy a few more months for the trust fund, is the more likely outcome.
“I think we’ll probably kick the can down the road again,” Sen. Rob Portman, R-Ohio, said Wednesday.
At this point, a short-term reauthorization, possibly funded through some form of budget gimmickry, is most likely because there is little time left for a broader measure before the end of July.
But there is hope among lawmakers that later in the year there could be an agreement on a longer-term patch, if not an outright solution.
Some lawmakers have suggested plans that would eliminate recurring shortfalls.
Sens. Bob Corker, R-Tenn., and Chris Murphy, D-Conn., have suggested raising the gas tax by 12 cents and indexing it to inflation, a maneuver that experts say would close the long-term funding gap.
Sen. Mike Lee, R-Utah, with Rep. Ron DeSantis, R-Fla., last week introduced legislation that would cut the gas tax to 3.7 percent over five years, and move authority for road projects to the states. “The federal government’s Highway Trust Fund is broke and another year of band-aid funding is not going to fix it,” Lee said.
But with Republicans firmly opposed to raising the gas tax and the federal government unlikely for now to give up its control over highway spending, a more likely possibility that Congress is mulling is tying reauthorization of highway programs and replenishment of the trust fund to international tax reform.
U.S. corporations have roughly $2 trillion in earnings overseas that will not be taxed until they are repatriated. Key lawmakers on both sides of the aisle have expressed interest in changing the international tax code and taxing those earnings, likely at a much lower rate than the current 35 percent, to fund infrastructure.
“Deemed repatriation” and taxation of those earnings in the context of a long-term reform would be “definitely better than doing this one year at a time, but not as good as actually closing the gap” in highway funding, said Marc Goldwein, senior vice president at the Committee for a Responsible Federal Budget.
Over 10 years, roughly $175 billion would be needed to meet the needs of the trust fund, according to the Senate Budget Committee.
“In Washington, both sides of the aisle, both sides of the Capitol and both ends of Pennsylvania Avenue, everybody’s talking about a long-term bill,” House Transportation Committee Chairman Bill Shuster, R-Penn., said Tuesday at an event at Georgia Tech.
