Washington Talks Infrastructure: Will This Time Be Different?
It's become an annual rite of spring in Washington. Cherry blossoms bloom and congressional fancy turns to infrastructure. 2019 is no exception with smiling bipartisan faces on the White House lawn pointing to a $2 trillion investment. But, is it real? Will it fade into the inevitable sultry summer of hot partisanship and gridlock?
A question well worth ponding as we embark on another Infrastructure Week: Will this time be different?
To answer, we probably have to start by recalling that there isn't really one infrastructure bill that we're talking about. We actually have three significant legislative debates unfolding on infrastructure at the same time. There's the annual appropriations process, the looming reauthorization of the current federal surface transportation legislation (the FAST Act), and the effort to enact a separate and broader infrastructure bill. Each has different aspects and prospects. All demand our attention and advocacy.
Ask many on Capitol Hill about the infrastructure bill and they will tell you that they passed not one but two, referring to the past two spending bills for transportation and housing. The claim has some merit. Funding for core infrastructure programs rose, in some instances significantly, in the past two funding packages. Overall domestic spending and infrastructure program spending specifically reached levels not seen in a decade since the Obama era stimulus.
This was enabled by a two-year spending deal brokered by then-Speaker Paul Ryan and Sen. Patty Murray (D-Wash.) that raised and set caps on defense and domestic spending for two years. This allowed congressional appropriators to provide needed boosts to infrastructure programs.
This happened in spite of budgets from the Trump administration called for eliminating funding for many of these same programs. The Trump approach was to call for slashing existing program funding and replacing it with a mix of financing and private investment tools. Congress was able to swiftly agree on rejecting that approach.
As we enter a new appropriations season, many, but not all, of those dynamics remain in place. The Trump administration again proposed a "dead on arrival" budget with many program eliminations. Transportation alone would see a 22 percent cut under the budget. At the same time, leaders on Capitol Hill can again use the Transportation-Housing and Urban Development (THUD) funding bill as a vehicle for boosting funding.
Promise and Peril in Appropriations
But, critically, this time around there is no agreement on those overall spending levels. That leaves the Democratic House and Republican Senate working from different spending allocations and a White House that may be spoiling for another government shutdown fight. To make things even trickier, there's also the return of both the debt ceiling and sequestration that could complicate negotiations this fall.
So, promise and peril in appropriations for infrastructure advocates this year with the opportunity to build on recent gains that boost the impact of proven programs like HOME, CDBG, BUILD (formerly TIGER), and New Starts but also threats of a politically motivated October impasse that shutters the government again or deep mandatory cuts with the return of budget caps.
Given the political and fiscal challenges facing funding decisions, advocacy during the appropriations process is critical. Appropriators on Capitol Hill are already at work with subcommittees poised to begin marking up bills in the coming weeks. APA has urged lawmakers to support infrastructure investment by building on the progress made over the last two budget cycles.
Specifically, APA has called on THUD appropriators to provide at least $3.8 billion for CDBG, $1.5 billion for HOME, $150 million for Choice Neighborhoods, $1 billion for BUILD, and $3 billion for transit capital investment grants.
FAST Act Reauthorization
The law covering federal transportation programs, the FAST Act, is set to expire in September 2020. That may seem a long way off in today's news cycle, but work is already well underway on this critical bill. The reauthorization will set key transportation planning policy, shape the operation of vital programs, and provide funding levels and formulas for most transportation programs. Renewal of the FAST Act could become the vehicle for many provisions being debated as part of a separate infrastructure bill.
Committee work on reauthorization has already begun and will continue through the summer. One of the main committees with jurisdiction over the legislation, the Senate Environment and Public Works Committee, has announced bipartisan plans to vote on a bill before the August recess.
To influence the policy provisions of the legislation, a number of separate bills, so-called "marker bills," are being introduced. For example, Sens. Ben Cardin (D-Md.) and Roger Wicker (R-Miss.) have proposed legislation to expand and improve the Transportation Alternatives Programs (TAP) that supports a range of biking and walking projects. Rep. Earl Blumenauer (D-Ore.) has a bill to create a research clearinghouse on planning for autonomous vehicles (AVs).
Other bills touching on topics such as AVs, resiliency, and safety and vision zero are likely. The reauthorization will also present an opportunity to refine federal transportation planning requirements and performance measures. APA is working with legislators and partner organizations on these efforts to influence the policies that will make their way into the final legislation.
To influence the reauthorization debate, APA has enacted a new surface transportation policy guide, which will soon be shared widely with members. The guide outlines policy ideas focused on several key themes: data for equitable and effective decisions, public transportation, safety and vision zero, project development, rural and suburban transportation, energy and climate, AVs, and freight.
While the policy provisions of reauthorization are vitally important, that is unlikely to be the focus of the debate on the legislation. Much like the separate infrastructure bill, the main obstacle will be money. The reauthorization will set formula funding levels but that funding is dependent on resolving long-standing problems with a sustainable revenue source.
Federal Gas Tax Funding
For decades, the federal gas tax has been the foundation for transportation spending. However, the gas tax has not been increased since the Clinton administration. The levy is simply not sufficient to fund the reauthorization. In fact, the Congressional Budget Office has projected the gas tax funded Highway Trust Fund will be insolvent by 2021, just one year into a new authorization.
This crisis has been looming for years. Recent reauthorizations have required Congress to find other general fund revenues to supplement the gas tax. Politically acceptable options for further general fund revenues are dwindling. This reauthorization cycle may well be the moment Capitol Hill is forced to come to terms with the funding dilemma at the heart of the infrastructure issue — raise the gas tax or find a replacement or see investment decline.
One approach that is increasingly referenced is the idea of a gas tax hike as a temporary bridge to a different funding mechanism altogether. A gas tax increase could be eventually replaced by other approaches, such as a vehicle miles traveled levy, dynamic pricing schemes, or a carbon tax.
The Trump administration has long touted a shift to more private funding. While private funding is unlikely to be sufficient replacement, it is true that the new or expanded financing tools will almost certainly be part of the mix. Proposals for boosting existing tools like the TIFIA loan guarantee program, raising the cap on Private Activity Bonds, creating new bonds, and restoring advance refunding of municipal bonds have all attracted bipartisan interest.
APA's Funding Positions
APA's forthcoming surface transportation policy guide makes our position on transportation funding clear. APA's plan calls for:
- Raising the federal gas tax
- Replacing the gas tax with a more sustainable levy over time
- Expanding performance measures in plans to meaningfully guide funding
- Boosting current formula programs while expanding local and regional funding control
- Increasing discretionary grant program funding in the budget;
- Improving the role of financing tools
The same funding issues that will make FAST Act reauthorization difficult are also at the heart of the infrastructure bill debate. Most everyone agrees on the need but consensus on funding has been elusive. And, everyday closer to the 2020 campaign season makes agreement that much harder. The realities of the political calendar are a big reason why the new Democratic majority in the House wants to move quickly. House Transportation and Infrastructure Committee Chairman Peter DeFazio (D-Ore.) aims to have a bill out of his committee this summer.
Finding agreement on funding for an infrastructure bill will be complicated not only by impending elections, but also by dynamics of the appropriations debate that will be unfolding at the same time this fall. President Trump and congressional Democrats appear to have landed on a goal of a $2 trillion package covering a range of infrastructure from schools and parks to broadband and transportation. In a letter to President Trump, Democrats placed some conditions on their support, including new federal funding and provisions addressing climate change and resiliency. But, agreement on an amount will be far easier than agreement on how to get there.
Senate Republican leaders have already sounded a note of skepticism. The Senate will almost certainly wait to see what comes out of the House. Democrats seem poised to put forward their initial bid on the House floor in the late summer or early fall. In terms of timing, that means it will be debated alongside new fiscal year funding. The approach from the White House is hard to predict, but presidential political cover would likely be essential for Hill Republicans to agree to any tax hike.
More and Better Investment Needed
Of course from a planning perspective, how an infusion of federal funding would be spent is as important as the amount of funding. As APA has long maintained in its infrastructure advocacy, the nation needs not only more investment but better investment.
APA has outlined key principles that should drive any infrastructure bill. These have been communicated to leaders in the Administration and Capitol Hill. On funding, APA rejects the idea of eliminating existing federal support in hopes of finding new private replacement dollars. Any deal should include new net federal dollars for infrastructure and a long-term sustainable revenue source. The new transportation policy guide, noted above, discusses how to do that.
On policy, APA has argued for a package that:
- Invests in a range of modes and types of infrastructure
- Recognizes the critical need for co-benefits and location considerations
- Prioritizes repair and safety; improves resiliency
- Reflects good local and regional planning
- Assists communities with a future that is likely autonomous, connected, electric, and shared
- Expands access, equity and opportunity for all
A new bill demands good planning and a new vision for investment be central.
From the outset of the Trump administration, interest in infrastructure has been high. But, rhetoric has outstripped results. The outlook is little improved this time around of overcoming all the obstacles facing a new infrastructure package. At the same time, advocacy on the issue will play a key role in the future of the "must do"items of annual appropriations and next year's FAST Act reauthorization. With a new infrastructure week upon us, the need for stepped-up advocacy is more important than ever.
Top image: New York City subway train and its supporting infrastructure. Pixabay photo.