Congress close to reaching agreement on funding
By: Phil Sneed
The last day of July stands as the deadline for Congress to reach a deal on how to fund the Highway Trust Fund. Money is set to run out at midnight, July 31, according to The Associated Press. The Senate met the deadline one day earlier than anticipated.
All eyes were turned to the Senate after their House counterparts passed a three month extension for funding. Senators hoped to avoid yet another short term band-aid, but with the House already out for summer recess, the Senate seemingly had little choice but to pass the extension by a 91-4 vote tally.
However, the AP reported the upper chamber of Congress did pass a long-term transportation bill. The bill would provide $350 billion in funding over six years while also enacting certain changes to transit, railroad, auto safety and highway programs. There is a catch: the bill only has enough funding for the first three years, if it were to be signed into law. The bill passed with a 65-34 vote tally that signified bipartisan support.
Senator Mitch McConnell said the passing of the bill was was a win for the country. The short-term extension represents the 34th one since 2009.
"The bill would provide $350 billion in funding over six years."
The Highway Trust Fund receives money mainly from the gas tax. Officials have been hesitant to increase the tax and have not done so since 1993, according to The Washington Post. The Senate's bill plans to provide $45 billion to the Fund from revenue increases and spending cuts implemented throughout the federal budget. Approximately $16 billion of funds would come from reducing the dividend rate the government currently pays to some of the country's largest banks.
The bill also sets aside funds to repair major freight transportation corridors, which are likely used during intermodal freight transport. The AP reported funds would start at $1.5 billion for fiscal 2016 and increase to $2.1 billion in 2021.
Can private investment help?
In an opinion article for U.S. News & Report, Jason Gold, said the U.S. needs approximately nine times the $350 billion to get the country's infrastructure up to date. This amounts to spending $124 to $150 billion per year.
As a result, Gold opined that private investment may be able to help fund the shortcomings. He cited multiple positive economic statistics of private investments into public infrastructure. He added that new financial products may make it easier to secure high amounts of investment.
According to McGraw Hill Financial, as much as $7 trillion from around the world can be invested in U.S. infrastructure. It's a significant question to ask, especially as infrastructure deteriorates at a faster rate than at any previous point. The average age of highways and streets in 2013 was 27.7 years. Between 1987 and 2008, the average age increased by 2.8 years. From 2008 to 2013, age has increased 3.4 years. It is not unreasonable to expect infrastructure to continue failing at a high rate due to increasing age.
For now, Congress will have to wait until fall to have further discussion on the six year funding extension. Delays on infrastructure funding may have a negative impact on the trucking industry, especially if roads and bridges continue to fail.