By Russell Berman - 03/04/14 06:00 AM EST
Speaker John BoehnerJohn BoehnerHouse GOP faces dilemma on spending bills Overnight Finance: Puerto Rico bill clears panel | IRS chief vows to finish term | Bill would require nominees to release tax returns Overnight Defense: Pentagon chief fears sequestration's return MORE (R-Ohio) won’t revive his 2011 proposal to use oil drilling revenue for infrastructure when the House takes up a new highway bill later this year, lawmakers and aides say.
Members of both parties are desperately searching for a revenue source to plug a shortfall in the Highway Trust Fund, which could run out of money as early as August, a month before the full transportation bill expires. The highway bill was one of several topics discussed last week during an Oval Office meeting between Boehner and President Obama, who unveiled his own $302 billion infrastructure proposal later that day.
“We’ve got to find a funding mechanism to fund our infrastructure needs,” Boehner said last week. “And so the hunt has been underway for the last year and half to find a funding source. I wish I could report we’ve found it, but we haven’t.”
The proposal that the Speaker embraced in the last Congress would have authorized expanded oil and gas production, and used the revenue to supplement the gas tax in paying for infrastructure projects. But a Congressional Budget Office study found the idea wouldn’t generate enough money, and Boehner couldn’t overcome objections from both conservative and centrist Republicans to pass a five-year, $260 billion highway bill out of the House in 2012.
Congress ultimately approved a two-year highway bill that closely resembled a bipartisan Senate proposal. That reauthorization expires at the end of September, but the Highway Trust Fund might run dry before then.
“We have a different problem than we’ve ever had before,” said Rep. Peter DeFazio (D-Ore.), a senior Democrat on the House Transportation subcommittee on Highways and Transit. “I don’t know what the way is out of this box, but there seems to be growing recognition that, come late this fiscal year, we are going to have a huge problem on our hands.”
Boehner brought up his earlier proposal on Monday in an interview with the Cincinnati Enquirer, his hometown newspaper, but a House GOP leadership aide confirmed that he would not be pushing the conference to adopt it, as he did two years ago.
“While revenue is clearly the sticking point, that proposal is not being considered,” the aide said.
Multiple lawmakers on the Transportation Committee said the drilling-for-infrastructure plan had not been discussed in early talks on a new highway bill.
Since getting rebuffed by the rank and file in his efforts to strike a deficit deal with Obama and enact his vision for infrastructure funding, Boehner avoided getting too far ahead of his conference on policy, preferring to let ideas gather momentum within the party before endorsing them.
Boehner dismissed a suggestion that Congress would need to “bail out” the trust fund. And across the aisle, senior Democrats are warning their allies that an increase in the gas tax, which some advocates are pressing for, wouldn’t pass a Republican House.
“I’m going to be very honest with you,” Sen. Barbara Boxer (D-Calif.), chairwoman of the Senate Environment and Public Works Committee, told a conference of highway administrators last week. “I don’t see support for raising the gas tax, and there’s absolutely no way we’re going to cut spending, so there’s going to have to be a creative way to fund this in reality.”
Boxer said she hopes to mark up a highway bill in committee in April.
Rep. Bill Shuster (R-Pa.), chairman of the House Transportation and Infrastructure Committee, has said he wants to advance legislation by late spring or summer. He has ruled out raising the gas tax or switching to a levy of vehicle miles traveled, a spokesman said.
Yet lawmakers are already warning that states are making preparations to slow down work this summer on long-term infrastructure projects out of concerns that the federal spigot will be shut off.
“There’s likely to be some kind of crisis that hopefully will focus people’s minds on whether they want to continue investing in transportation and at what level,” said Rep. Tom Petri (R-Wis.), chairman of the highway subcommittee.
While the full Transportation Committee authorizes highway and public transit programs, the tax-writing Ways and Means Committee is responsible for figuring out how to pay for them. The gas tax has served as the chief funding source for the Highway Trust Fund, but it has not been increased for two decades and hasn’t kept up with spending needs.
Senior members of both parties were heartened last week when Obama and Rep. Dave Camp (R-Mich.), chairman of the Ways and Means Committee, each offered proposals to use money generated from closing corporate tax loopholes to solidify the Highway Trust Fund.
Obama’s four-year, $302 billion plan would cover the fund’s immediate shortfall and use $150 billion in revenue generated from corporate tax reform to boost infrastructure spending. Camp is proposing to direct $126.5 billion in revenue from a one-time tax on multinational corporations’ offshore income.
But Camp’s offer comes in the context of a much broader tax overhaul seeking to reduce individual and business rates, which is not expected to be enacted this year. In a brief interview, he suggested he did not want to see pieces of the plan picked out and passed piecemeal.
“Everything I’m doing is part of the whole package,” he said. “I wouldn’t look at it any other way right now.”
The House GOP leadership aide said the problem with Obama’s proposal is that it involves only corporate and not individual tax reform, which Republicans say would leave small businesses behind.
Yet among Republican backers of infrastructure spending, Camp might face pressure to pull out his proposal for bolstering the trust fund from the rest of his tax reform package.
Rep. Reid Ribble (R-Wis.), a member of the Transportation Committee, said he wanted to take a closer look at Camp’s plan and voiced general support for using tax revenue to pay for infrastructure.
“Republicans are more inclined to allow revenue to go up, when it goes to a specific trust fund, rather than when it just goes into the general fund, where it can help grow government,” Ribble said.
Keith Laing contributed.
--This report was updated on March 5 at 8:18 a.m. to correct Rep. Peter DeFazio's position on the subcommittee.