Replacing the FAST ACT and Other Efforts to Modernize America’s Infrastructure
The Fixing America’s Surface Transportation (FAST) Act is expiring and a one-year extension is almost certain. There are currently parallel tracks of legislation being put forth in the two chambers. The Senate is more focused on a more traditional highway bill, while House Democrats are pursuing a broader infrastructure package. In both chambers, there is a third track of existing legislation that could potentially move as part of an infrastructure package or on some other legislative vehicle. The recent release of the White House’s budget proposal for fiscal 2021 has provided an emphasis on President Trump’s infrastructure priorities within the legislative conversation.
Senate: “America’s Transportation Infrastructure Act of 2019 (S.2302)”
Senate Majority Leader Mitch McConnell (R-KY) has named a highway reauthorization bill as one of three top priorities in his post-impeachment agenda. To that end, the Senate Committee on Environment and Public Works (EPW) unanimously reported last July “America’s Transportation Infrastructure Act of 2019 (S.2302).” The bill would authorize $287 billion over five years for surface transportation programs and would be the largest highway reauthorization legislation in history.
President Trump urged Congress to move forward with this legislation during his State of the Union address on February 4. The question remains how, or whether, to finance this measure. Raising the gas tax, which has not been done since 1993, has been suggested. While, Senate Finance Chairman Chuck Grassley (R-IA) and others have been hesitant to support the idea, he and EPW Chair John Barrasso (R-WY) have asked the Joint Committee on Taxation to score the revenue impacts of a new fee on electric vehicles, a truck tax, and indexing the gas tax to inflation.
Senate EPW is said to be working overtime to have the highway reauthorization bill ready to go ahead of the August recess. Some believe it will be paired with a reauthorization of the Water Resources Development Act (WRDA) and other related measures. Following what has become a biennial practice in recent years, WRDA was last reauthorized in October 2018 and included 30 projects related to water resources. A 2020 WRDA bill would potentially cover 52 such projects, as recommended by the Army’s chief of engineers Lt. Gen. Todd Semonite. The 17 additional projects have been valued at $9 billion. The House is also focused on approving a WRDA counterpart.
House: “Moving Forward Framework”
House Democrats, led by Transportation and Infrastructure Committee Chair Peter DeFazio (D-OR), Energy and Commerce Committee Chair Frank Pallone (D-NJ), and Ways and Means Committee Chair Richie Neal (D-MA) released a framework for a 5-year, $760 billion infrastructure investment on January 29. Entitled “Moving America and the Environment Forward: Funding Our Roads, Transit, Rail, Aviation, Broadband, Wastewater and Drinking Water Infrastructure,” the broad policy package seeks to bring critical infrastructure into the 21st century. The framework envisions addressing a variety of urgent needs, including maintenance backlogs, safer street designs, net zero emissions in transportation, and increased resilience. From climate change and clean water, to resilience and broadband deployment, House Democratic leadership has made clear their proposal is not just about roads and bridges.
The “Moving Forward Framework” would bolster the federal role in helping communities implement infrastructure that is “smarter, safer, and made to last.” It is composed of existing highway, transit, and water legislation that Congress passes on a more regular basis, as well as new provisions regarding broadband, climate change, and some language on school construction. Speaker Nancy Pelosi (D-CA) has indicated House Democrats will wait until March to unveil corresponding legislative text. A markup will hopefully come before Memorial Day.
Provisions within House Democrats’ framework reflect the "Senate Democrats' Jobs & Infrastructure Plan for America's Workers” put forth by Senate Minority Leader Chuck Schumer (D-NY) in 2018. That plan would have invested $1.022 trillion over ten years to modernize infrastructure and create jobs. It sought to address clean water, clean energy, broadband deployment, and school construction, as well as ensure the solvency of the Highway Trust Fund. The 2018 Senate plan proposed paying for these investments in part by closing the carried interest loophole and raising the corporate tax rate to 25 percent.
During a special House Democratic caucus meeting ahead of the framework’s rollout, Speaker Pelosi expressed her hopes for an “Eisenhower moment” that would bring the parties together on this key issue. Following the unveiling, Rep. DeFazio similarly referred to President Dwight Eisenhower’s groundbreaking infrastructure legacy and expressed his desire to rebuild crumbling infrastructure that has remained unchanged for 75 years.
Finding the Funding
Democrats have refrained from identifying a funding source for their infrastructure plans, awaiting meaningful input from the Trump Administration. Rep. Neal, whose committee has jurisdiction over infrastructure finance, has routinely engaged with Treasury Secretary Steven Mnuchin about moving an infrastructure package that is broader than the highway bill reauthorization envisioned in the Senate. They have also discussed possible funding sources. Rep. Neal is open to reintroducing Build America Bonds, tax-advantaged municipal bonds introduced in the 2009 stimulus package, to pay for new infrastructure projects. Republicans, consistent with President Trump’s 2018 infrastructure plan, have urged the importance of state, local, and private investment, such as public-private partnerships, over increased federal funding.
Further compounding the need to act, the Highway Trust Fund is insufficiently fed by the federal gas tax and will become exhausted in 2022. Some are considering the possibility of using the Airport and Airway Trust Fund, the Inland Waterways Trust Fund, and the Harbor Maintenance Trust Fund to help finance federal infrastructure projects.
Funding from a federal gas tax hike is not off the table, but many in leadership are not keen on the idea. Rep. DeFazio is exploring the idea of Build America Bonds to circumvent this outcome. A paper from the Joint Committee on Taxation suggested a mileage-based tax system, and Rep. Sam Graves (R-MO) and others have endorsed the idea of a vehicle miles traveled (VMT) fee. Other funding ideas include an infrastructure bank, tolling, and public-private partnerships.
Assuming a broad infrastructure package will also include infrastructure projects, it is worth noting there was recently a boost in the New Market Tax Credits program from $3.5 billion to $5 billion. The program has previously provided incentives for electrification projects in low-income areas. If it is proposed as a funding source for the “Moving Forward Framework,” that could mean a larger electrification component to the package than expected.
Despite House Democrats’ willingness to allow earmarks in the fiscal 2021 appropriations bill to pay for infrastructure, Senate Republicans are reluctant to lift their indefinite ban placed on such provisions last year. The decision was recently made to table discussions about earmark revival until the 117th Congress is in session.
Rep. DeFazio and Rep. Abby Finkenauer (D-IA) requested the Government Accountability Office (GAO) investigate fund swapping programs and how they impact local infrastructure projects. Fund swapping enables states to exchange federal funds for state dollars to shirk federal requirements. The findings of this investigation could have a notable impact on determining a viable source of funding for any infrastructure plan coming out of the House.
Moving Forward with Existing Legislation
The Senate surface transportation legislation has 33 existing bills associated with it. The House framework does not directly mention any bills, but is based upon existing, introduced, and proposed legislation.
Whether transportation-specific or related to infrastructure in a broader sense, there are a number of Senate and House bills that span multiple committee jurisdictions that could be incorporated into the highway reauthorization bill or a broader infrastructure package, attached to some other legislative vehicle, or considered as standalone measures to achieve infrastructure goals. Below is a sampling of just some bills that may be part of the infrastructure discussion moving forward.
Transportation
H.R. 5700: Resilient Highways Act
This bill was introduced by Rep. Andy Kim (D-NJ), on January 29, 2020 in the House Transportation & Infrastructure Committee. It was subsequently referred to the Subcommittee on Highways and Transit. The bill would amend Title 23 of the U.S. Code to ensure Federal-aid highways and bridges are more resilient.
H.R.5571: Revamping American Infrastructure Act of 2020
This bill was introduced by Rep. Mark Meadows (R-NC) on January 10, 2020, and was referred to the Subcommittee on Railroads, Pipelines, and Hazardous Materials. It is intended to facilitate the use of performance-based standards issued by the Department of Transportation (DOT).
House Transportation and Infrastructure Committee Republicans’ Infrastructure Principles:
Republicans in the House Transportation and Infrastructure Committee have released infrastructure principles, including on permit streamlining. Additionally, Rep. Graves has stressed the need for flexibility for state infrastructure needs and a focus on rural infrastructure. House Majority Leader Steny Hoyer (D-MD) has signaled a willingness to honor these Republican priorities. However, the GOP principles make no mention of addressing climate change. The inclusion of such provisions could be non-negotiable for Democrats.
Climate Change
H.R.5117: Rebuilding Our Communities by Keeping Aggregates Sustainable (ROCKS) Act
This bill was introduced by Rep. Greg Stanton (D-AZ) on November 18, 2019 and referred to the Subcommittee on Water Resources and Environment. It would require the Secretary of Transportation to establish a working group to conduct a study on the regulatory and legislative improvements necessary to preserve access to certain construction materials and reduce the costs and environmental impacts of infrastructure projects.
H.R.5709: Climate Resilient Communities Act
This bill was introduced by Rep. Joe Neguse (D-CO) on January 30, 2020, and was referred to the Subcommittee on Economic Development, Public Buildings, and Emergency Management. It would require the Comptroller General to evaluate and issue a report on the structural and economic impacts of climate resiliency at the Federal Emergency Management Agency, including recommendations on how to improve the building codes and standards that the Agency uses to prepare for climate change and address resiliency in housing, public buildings, and infrastructure such as roads and bridges.
Broadband Deployment
H.R. 2741: Leading Infrastructure for Tomorrow’s America (LIFT America) Act
This bill was introduced by Rep. Frank Pallone (D-NJ) on May 15, 2019 in the House Energy & Commerce Committee. It was referred to the Subcommittee for Indigenous Peoples of the United States on June 4, 2019. The bill would provide $40 billion over five years to deploy and secure resilient broadband in communities nationwide. Additionally, the bill includes provisions related to drinking water infrastructure, clean energy infrastructure, EPA Brownfields redevelopment grants, and healthcare infrastructure.
H.R. 4229: Broadband Deployment Accuracy and Technological Availability Act
This bill was introduced by Rep. David Loebsack (D-IA) on September 6, 2019 in the House Energy & Commerce Committee. It was read twice in the Senate and placed on the Senate Legislative Calendar under General Orders. The bill would change the way the Federal Communications Commission (FCC) collects, verifies, and reports broadband data. It would also require measures for greater accuracy of broadband maps to improve the quality and completeness of deployment.
House Task Force on Rural Broadband:
Led by House Majority Whip James Clyburn (D-SC), the Rural Broadband Task Force launched in May 2019 to advocate the inclusion of broadband funding in any infrastructure package. Members of the task force, who hail primarily from rural districts, are considering a discussion draft and plan to meet the week after the Presidents Day recess. Draft legislation is expected to be shared for stakeholder input in late February.
Smart Cities
H.R. 2636 / S.1398: Smart Cities and Communities Act of 2019
This bill was introduced in the House by Rep. Suzan DelBene (D-WA) on May 9, 2019 and was referred to the Energy & Commerce Committee. It was subsequently referred to the Subcommittee on Consumer Protection and Commerce on May 10, 2019. Companion legislation was introduced in the Senate on May 9, 2019, by Sen. Maria Cantwell (D-WA) in the Committee on Commerce, Science, and Transportation. The bill would promote the use of smart technologies and systems in communities.
White House Infrastructure Priorities
The Trump Administration released its FY21 budget proposal on February 10. It calls for $1 trillion for infrastructure over ten years, offset from proposed mandatory spending, as well as a topline for DOT of $21.6 billion, a 13 percent cut from current funding. President Trump generally supports S.2302, so the budget reflects spending levels in that legislation. Any remaining funding for infrastructure would come from public-private partnerships, as well as state and local coffers. Cuts in other areas of the budget would reportedly contribute to replenishing the Highway Trust Fund.
Congress has, on multiple occasions, rejected offsets from other programs as a funding source. As mentioned above, Chairman Neal and Secretary Mnuchin recently discussed financing as part of their larger infrastructure conversation. President Trump and Secretary Mnuchin are in favor of issuing 50-or 100-year Treasury bonds to private investors as a source of funding. Democrats are less inclined to encourage private investment and believe federal spending should be the primary funding source for infrastructure. Conversations between Rep. Neal and Secretary Mnuchin are ongoing.
Passing an infrastructure package during his first 100 days in office was a 2016 campaign promise for President Trump. Part of this campaign pledge included the possibility of leveraging private investment in the form of government issued bonds. In 2018, he proposed a $1.5 trillion infrastructure bill that faced bipartisan opposition in Congress. Some Republicans considered it too costly, while some Democrats were concerned it relied too much on state, local, and private funding sources and did not allocate enough federal dollars to projects. The bill was intended to build federal partnerships with state and local counterparts, and to streamline the lengthy permitting process.
Conclusion: More than Roads and Bridges
Infrastructure is viewed as an urgent bipartisan challenge in need of a solution, though finding a mutually acceptable resolution in an increasingly political time leading up to the November elections will prove tricky.
As a result, the FAST Act is likely to receive at least a one-year extension; this is not out of the ordinary, as surface transportation measures are often repeatedly extended before they are officially reauthorized. In the meantime, House and Senate committees of jurisdiction will each work on infrastructure issues within their respective chambers.
The Trump Administration is expected to continue engaging with leading House Democrats on infrastructure issues and will likely continue to support the Senate highway bill reauthorization to fulfill a long-awaited 2016 campaign promise ahead of the 2020 election. Ultimately, efforts made now may lay the groundwork for a broader infrastructure deal that might unfold post-2020.