Trump's Highway Plan May Face Same Old Roadblocks In Congress
Just how bad is the state of the nation's highway infrastructure? So bad, tires on FedEx trucks last only half as long as they did 20 years ago, as they deteriorate rapidly from crumbling pavement and get more flats from gaping potholes.
"We're using almost 100 percent more tires to produce the same mileage of transportation," FedEx Chairman and CEO Fred Smith told the U.S. House Transportation and Infrastructure Committee Wednesday. "Why is that? Because the road infrastructure has so many potholes in it, it's tearing up tires faster than before."
In addition, "the cost of congestion is getting worse," Smith continued. "It's preventing time-certain deliveries" for his and other businesses whose growth is dependent upon on-demand orders and rapid, direct-to-consumers delivery.
The House committee is beginning to lay the groundwork for what is expected to be a massive infrastructure proposal from the Trump administration in coming months. The president has said he will spend up to $1 trillion rebuilding the nation's roads, bridges, tunnels and airports but has offered few specifics.
The hearing was intended to outline the vast need for infrastructure improvements and start discussing ways to pay for it; but therein lies the rub. There is almost universal agreement that there's a great list of things in need of repair, whether seaports or airports, railways or waterways. But few in Congress, especially in the majority party, seem willing to back specific taxes or fees to fund infrastructure.
"Finding the money is the 900-pound gorilla in the room," said Republican Rep. Brian Babin of Texas. Democrat Peter DeFazio of Oregon reminded fellow committee members that the Highway Trust Fund is running out of money because the current 18.4 cents per gallon federal gas tax falls far short of funding present needs. DeFazio says the existing highway and transit spending plan already relies on "gimmicks" and "funny money that we'll never see."
The Trump administration has floated a plan to use tax credits to lure private investment in infrastructure projects, but experts say that can work only for projects such as toll roads that will generate a revenue stream to pay off investors. And none of the corporate chief executives testifying before the committee Wednesday said they believe such public-private partnerships could generate anywhere near enough revenue to meet the infrastructure needs.
"We at Federal Express support an increase in the gas tax," said Smith. But he quickly added that his company is rapidly moving toward using more electric, hybrid electric and natural gas fueled vehicles, which would not pay traditional gasoline and diesel taxes. So he says his company would support a tax on vehicle miles traveled, tolls or congestion-based pricing, which would charge all highway users.
Others testifying before the committee, including David MacLennan, CEO of agribusiness giant Cargill; BMW of North America CEO Ludwig Willisch; Mary Andringa, CEO of Iowa-based manufacturer Vermeer Corp.; and AFL-CIO President Richard Trumka, expressed support for increased user fees to pay for fixing up, rebuilding and expanding the nation's infrastructure.
But a coalition called the Alliance for Toll-Free Interstates, which includes the American Trucking Associations and the Owner-Operator Independent Drivers Association, asks committee members to "reject tolling of existing interstates as a financing method." Committee Chairman Bill Shuster, a Republican from Pennsylvania, told The Washington Post this week that adding tolls to existing interstate highways is a political nonstarter.
Such opposition to tolls, combined with "no tax increase" pledges signed by many Republicans, reduces the prospects for any increase in motor fuel taxes, frustrating some Democrats.
DeFazio suggests his proposal for a small increase in the gas tax that is indexed to inflation would have few political consequences. "Gas would go up 2 cents a gallon," he said. "Anybody think they're going to lose their election over that?"
Near the end of the hearing, which lasted more than three hours, Democratic Rep. Dina Titus of Nevada said it ended up sounding like too many hearings in Congress in years past.
"We're having the same conversation," she said. "I keep hearing the same rhetoric without action."