President Barack Obama on Wednesday will call for a four-year, $302 billion transportation bill to replace the law that expires at the end of September, while repeating his pitch for tax reform to fill some of that gap.
The White House didn’t say whether Obama will offer a full reauthorization proposal — for the first time in his presidency — or simply a “vision.” But he has been clear recently that he wants to use money from overhauling corporate taxes to make up for chronic shortfalls in the Highway Trust Fund’s gasoline tax revenues.
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On paper, the bill’s annual price tag would be a 38 percent boost over the anemic $109 billion, two-year highway and transit bill that Congress enacted in 2012. But the true increase over current spending would be considerably smaller: The Congressional Budget Office has said it would take $279 billion over four years just to keep up with current demands.
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Still, after Obama has made dozens of infrastructure speeches that left transportation boosters feeling disappointed, the one he makes Wednesday afternoon in St. Paul, Minn., should be a breath of fresh air.
Obama will propose using $150 billion in “one-time transition revenue from pro-growth business tax reform” to help shore up the next transportation bill, the White House said. It didn’t detail what the reform would consist of.
“This vision will show how we can invest in the things we need to grow and create jobs by closing unfair tax loopholes, lowering tax rates, and making the system more fair,” a document distributed by the White House read.
It added: “While the President will show how to fully pay for his proposal in this way, he will also make clear that he is open to ideas and wants to work with Congress in a bipartisan way to get this done.”
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Obama’s speech comes on the same day that House Ways and Means Chairman Dave Camp (R-Mich.) plans to release a corporate tax overhaul draft that would dedicate a portion of revenues to the transportation bill. It also arrives less than a week before the president is expected to unveil his budget proposal for the next fiscal year, amid signs that the administration is turning away from past years’ obsessions with deficit-cutting “grand bargains” and instead will hammer its messages about jobs and economic growth.
Camp’s proposal, according to aides, would designate between $120 billion and $125 billion to supplement the Highway Trust Fund while cutting corporate tax rates to 25 percent from 35 percent.
His proposals and Obama’s suggest at least some coalescing around the idea of again using one-time revenues to fill holes in the highway and transit fund. But achieving a large corporate tax overhaul – especially before the current transportation law expires Sept. 30 – will be a tough lift.
The Highway Trust Fund could need a rescue even sooner. Transportation Secretary Anthony Foxx has said the fund is on track to “bounce checks” beginning in August.
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And though transportation boosters will be glad to see some movement toward putting together another transportation bill, many have been disappointed with proposals focused on making one-time revenue patches instead of a more permanent fix. Potential long-term solutions such as increasing the gasoline tax or charging drivers based on the miles they drive are considered political nonstarters in the current climate.
Also on Wednesday, Obama will announce the opening of a new round of DOT’s TIGER grants, making $600 million available for projects nationwide.
The new round of competitive grants will place an emphasis on “transformative” projects that will have “significant impact on the nation or a region,” expand job access and increase economic opportunities, or catalyze economic development, the White House said.
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