Senators, DOT differ on ways to close highway funding gap

| Thursday, February 28, 2008

U.S. senators and DOT Secretary Mary Peters differ on ways to close the gap in the amount raised and the amount spent on surface transportation.

Peters testified Thursday, Feb. 28, before the U.S. Senate Committee on Commerce, Science and Transportation about President Bush’s budget proposal for the U.S. Department of Transportation.

President Bush proposed $39.4 billion for highways and bridges, approximately $1.8 billion or 4.4 percent less than was outlined for 2009 in the transportation funding bill commonly referred to as SAFETEA-LU. Bush signed the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users in 2005.

Sen. Amy Klobuchar, D-MN, said the president’s budget proposal falls short on surface transportation.

“I was disappointed that the president’s budget reduced the Federal Highway Administration’s budget by almost 5 percent,” Klobuchar said.

Peters countered by saying the overall transportation budget of $286.4 billion fulfills the commitments outlined in SAFETEA-LU.

Peters also laid blame on congressional earmarks for weakening federal resources to fix highways, bridges and other infrastructure.

The hearing turned to ways to close the funding gap for surface transportation.

“We absolutely must come together and have discussions about how we close the gap in the future and fund those projects that need to be funded and find new sources of revenue,” Peters said. “I have said before that I am convinced that we cannot depend on the gas tax in the future as we have in the past.”

Peters said later in the hearing that the private sector is in a position to invest $400 billion in U.S. infrastructure should restrictions continue to be lifted.

“I think there are ways to diversify and supplement revenues that we’re collecting today, and one of those is to bring in private-sector participation,” Peters said.

Klobuchar said she would prefer to see the recently announced federal tax cuts rolled back and the money put directly toward transportation.

Sen. Byron Dorgan, D-ND, said the federal priority on surface transportation has taken second place to an expensive war.

“We’re investing in a lot of infrastructure in Iraq and cutting back on infrastructure investment in this country,” Dorgan said.

Sen. John Thune, R-SD, used his comments to promote a proposal called “Build America Bonds,” which he co-sponsored with Sen. Ron Wyden, D-OR, to provide long-term financing separate from the Highway Trust Fund.

The Highway Trust Fund relies on fuel taxes whereas Build America Bonds would tap the bond market.

Dorgan and Thune also promoted the idea of a National Infrastructure Bank, proposed by Sen. Christopher Dodd, D-CT, and Sen. Chuck Hagel, R-NE, in 2007.

The National Infrastructure Bank would offer direct government financing and bonding to projects determined to have federal priority and costing more than $75 million.

Senators said these proposed forms of financing would not replace the Highway Trust Fund, but would add additional avenues for major projects in the federal interest.

– By David Tanner, staff writer
david_tanner@landlinemag.com

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