‘Every day is freight day,’ industry leaders tell Washington power brokers
On the eve of President Barack Obama’s FY 2014 budget release, freight interests in the Nation’s Capital on Tuesday were telling policy leaders that it’s never too early to be thinking about the next multi-year highway bill—and, more importantly, how to pay for it.
“It’s springtime in Washington—anything is possible,” quipped Rep. Tom Petri, R-Wis., chairman, of the Highways & Transit subcommittee of the House Transportation & Infrastructure Committee. Petri, a powerful 18-term member of the House, was nearly bubbly in his support of a multi-year transportation bill to replace MAP-21 which expires next year.
Rep. Petri told more than 100 members of the Coalition for America’s Gateways and Trade Corridors (CAGTC) coalition that his goal for is to pass a “robust” highway bill by the time the current Congress finishes its work at the end of 2014.
“We face a number of challenges, but the need is great,” Petri told CAGTC members whose motto for lobbying Washington this year is “Every Day is Freight Day.”
Perhaps a more apropos slogan next year could be: “Freight Will Be Late” without a long-overdue fuel tax increase.
“There are a lot of ideas how there,” Rep. Petri said. “The question is resources. How do we allocate them and do it as efficiently as possible?”
Rep. Petri then addressed what he called the “gorilla in the room”—how to pay for it? The federal tax has fuel hasn’t been raised in 20 years. But powerful industry interests such as the U.S. Chamber of Commerce and the American Trucking Associations are all but begging Washington to raise that tax. They and others recognize, as Rep. Petri said, “The existing approach is basically broken.”
As currently constructed, the Highway Trust Fund takes in about $40 billion in revenue every year—but spends about $50 billion. By the time the next bailout comes next year, the HTF has siphoned more than $50 billion in revenue from the general U.S. treasury to keep highways and bridges somewhat maintained.
This current system of borrowing from Peter to pay Paul “is not fiscally or politically sustainable,” said keynote speaker Polly Trottenberg, Department of Transportation Under Secretary for Policy. “There is a growing sense we really need to do something about this crisis.”
President Obama has already proposed a $50 billion “Fix-it-First” infrastructure improvement program, but its chances of passing the Republican-led House are iffy. As Trottenberg said, “Clearly we’re going to need a larger political consensus to tackle the funding problem.”
Trottenberg, a veteran Washington hand, then predicted that the most politically expeditious way to raise the fuel tax would be as part of a larger budget bill that might include targeted tax breaks as well as revenue enhancers, as taxes are called in Washington-speak.
She recalled the atmosphere back in 1993 when President Bill Clinton last raised the federal motor tax on fuels—now 18.4 cents on gasoline and 23.4 cents on diesel. She said that tax increase was part of what Trottenberg called “a behind-the-scenes” bill that include other revenue adjustments. She predicted that perhaps that would be the solution next year as well.
“We haven’t in 20 years had a stand-alone tax bill (on fuels) to fund highways,” Trottenberg said. “No one can see the politics of that. But as part of a larger tax bill? That’s potentially where a deal could come.”
The key question is when? Short answer: nobody knows. “That’s wayyyyy above my pay grade,” Trottenberg quipped.
Meanwhile at DOT, Trottenberg said the feds continue to take a “multimodal” approach to freight, trying to emphasize rail, intermodal and ports as much as highways. Under MAP-21, the DOT is charged with developing a national freight strategy that officials say will include all modes, not just trucking.
The agency must come up with an initial designation of a 27,000-mile “primary freight network” that will not be all highways. It will include such areas as intermodal connectors and infrastructure for the nation’s new energy exploration areas to serve the natural gas fracking industry.
“We’re making progress,” Rep. Petri told the CAGTC group. “Doing things on a (bipartisan) basis makes success more likely.
Mortimer Downey, CAGTC chairman and a former DOT Deputy Secretary, noted the fact that CAGTC drew a record number of industry stakeholders from around the nation to lobby Congress “underscores the message to both Congress and the administration that a growing economy demands federal leadership and commitment to building the infrastructure that will keep our American businesses successful in the world market place.”
