When President Donald Trump took office at the beginning of last year, the new administration made lofty promises about infrastructure investments. Trump’s transition team had put together an ambitious plan to rebuild roads and bridges around the country to help provide a foundation for the economy of the future. Since then, little progress has been made. At the Republican Congressional retreat at the Greenbrier Resort this week, the members again discussed the future of infrastructure reform. Underlying the issue is a critical question of funding for the Highway Trust Fund.
“We have a trillion dollar, trillion dollar plus problem in this country with infrastructure,” said Rep. Bill Shuster (R, Pa.), chairman of the House Committee on Transportation and Infrastructure. “We haven’t invested in it and we have an opportunity with this president, who is a builder, to address the issue.”
Transportation infrastructure has become an increasingly important issue around the country as interstate shipping continues to grow. Many of the retreat attendees noticed the steady truck traffic on Interstate 81 heading into Greenbrier.
“If you look at night it looks like a railway,” he said of the highway, “because all you can see is trucks, thousands and thousands of trucks.”
In some ways, projects like this should be easy winners of bipartisan support. Interstate 81 passes through six states and 18 Congressional districts. Even so, passing a major infrastructure plan is not a sure bet.
Heading out of their meetings, Republicans stressed that moving forward on infrastructure would require bipartisan support. In order to get this support, it is crucial that Republicans find adequate funding for their proposal. Shuster called the gas tax and the Highway Trust Fund the “elephant in the room” for the infrastructure plan.
“It’s efficient, it’s understandable, and it goes 100 percent to its intended purpose,” he said of the tax. For this reason, many people support the structure of the gas tax, which functions like a user fee for roads. With the exception of some brief changes in the 1990s, gas tax revenues are set aside for transportation spending.
Even so, it isn’t likely to be enough to cover build up on the scale that Republicans are discussing.
Under current projections, the Highway Trust Fund will run out of money in the fall of 2020. This means that the $1.5 trillion needed to fund Trump’s ambitious infrastructure plan will need to come from an alternative source. After their success in passing tax reform at the end of 2017, few in Congress will relish the idea of raising any sort of taxes, even something like the fuel tax, which has not seen increases in 25 years. Today the revenue it raises is nowhere near enough to cover the cost of maintaining America’s roads. The rise of electric cars introduces another variable: they drive on roads, but pay no gas taxes.
Fuel taxes are not the only source of money for the Highway Trust Fund, though. Money also passes into the fund through transfers from the general revenue fund. For several years, these transfers were reduced under sequestration rules.
Increasingly, the Highway Trust Fund has been spent on projects that aren’t explicitly roads and bridges. In 2009, Senator John McCain (R, Ariz.) and then-Senator Tom Coburn (R, Okla.), wrote to criticize Congress for using the fund to pay for pet projects. The senators highlighted tens of billions of dollars in highway money spent on bike paths, youth conservation programs, and beautification projects.
Watchdog groups say that as much as 25 percent of the money spent out of the Highway Trust Fund goes to non-highway projects of very limited, regional impact. Whether Congress will go after these transit earmarks as they grapple with the infrastructure bill remains to be seen.
What is more clear is the desire to follow tax reform with a major proposal to get the country building again. America’s infrastructure, on the whole, is in good shape. For the transportation needs of the future, it is undersized and Republicans in Congress say that the time to build is now.
“If you look at the history of this country, you see three great builders: Lincoln who built the transcontinental railroad, Roosevelt, who built the Panama Canal, and Eisenhower, who built the Highway Trust Fund and the Interstate Highway System,” he said. “They come along about every 50 years. We are now about 60 years in and we have a president who is a builder.”