The American people have voted, and come January 3, both branches of the legislature will be led by the Republican party. Given that the current Congress has been one of the least productive in recent history, and that the Republicans picked up seats in the House and Senate in part by bashing the president, it seems unlikely they and the commander-in-chief will come to terms on much. But there is one important thing they can agree on: Our infrastructure is a mess, and together they can do something about it.
Our dams are aging. Water pipes leak and burst. One in four Americans lives within three miles of a hazardous waste site. The aerospace system is overtaxed, inland waterways haven't been worked on in decades, and 45 percent of households lack access to public transit. All told, the country needs $3.6 trillion in investment to bring it all up to par, according to the American Society of Civil Engineers (ASCE). Last year, the organization rated the country's infrastructure as a D+. Improving that grade is about more than fixing potholes and cleaning graffiti off train cars. Good infrastructure is critical to the nation's growth and prosperity.
"It's a big economic risk we're taking by not addressing the issue," says Casey Dinges, the ASCE's managing director of external affairs.
Most Americans never encounter inland waterways or the freight railroad system, but just about everybody uses public roads, which are in such a state of disrepair, they earned a D from the ASCE. The interstate highway system represents 4 percent of American roads and carries 45 percent of freight traffic. The efficiency it provides saves consumers money on everything from shoes to fresh produce, but there's nearly no money to keep it in a decent state, and no longterm plan to provide any. The good news is that there's plenty of consensus on what kind of work needs to be done. "The real hangup here," Dinges says, "is how to pay for it."
The current surface transportation funding bill is the $105 billion Moving Ahead for Progress in the 21st Century Act (MAP-21). It did little to address longterm funding concerns and is set to expire May 31. There are three ways Congress can deal with the highway funding before it runs out, Dinges says. It can do nothing, effectively ending the federal government’s role in road development---an unlikely but not impossible scenario. It can scrounge up the money for another four month patch (roughly $6.5 billion), which would take it to the end of the fiscal year.1 That's been the go to move in recent years, every time the question comes up. Or, it can find a legitimate source of revenue, and instead of kicking the can down a pothole-riddled road, actually put in place a longterm fix.
What’s really needed, Dinges says, is a bill that addresses funding for five or six years. The 18.4 cents per gallon gas tax, the major source of federal funding for highway projects, was set in 1993. It hasn't changed and it's not indexed to inflation, so it’s since lost 35 percent of its purchasing power. It's the main source of cash for the National Highway Trust Fund, and the only reason fund hasn't bottomed out is that it's gotten repeated, emergency transfusions.
“The gas tax made sense in the past,” Dinges says, “and it probably makes sense now, one last time, as a bridge.” There’s good reason to look for a new way to fill the coffers: New passenger cars were, on average, 27 percent more fuel efficient in 2013 than in 1993, so their owners contribute less to the highway fund but do just as much damage to our roads. Raising the gas tax is a straightforward approach, but politically it's a hard sell, especially with conservative-led legislature. But there are other approaches that may be more palatable.
The states are leading the way on this. Last year, Virginia scrapped the model of charging a fee per gallon at the pump, replacing it with a 3.5 percent wholesale tax and a bump in the general sales tax from 5 to 5.3 percent. The idea is that taxing by percentages will keep revenues up despite inflation. Oregon made the bigger move, starting a pilot program to tax miles traveled instead of gas burned. “They’ve had a pretty good experience with it, and that’s a pretty fair way to do it,” Dinges says.
It's easy to think the incoming Congress, led by a Republican party that's staunchly anti-federal spending, won't be the one to come up with a longterm way to increase revenue and spending, but, Dinges says, there are three good reasons to be optimistic:
Gas prices are way down. Americans haven’t paid this little for gas (the national average is $3/gallon) since December 2010. This is the longest running consecutive decline in prices since 2008, according to AAA, and the trend could hold through the winter. That relief could make an increased tax more palatable, Dinges says, and we’d finally have significant funds to make longterm investments.
This Congress has been among the least productive in recent history, and with Congress run by Republicans and the White House by a Democrat, the 114th may deliver more of the same. But the right wing takeover of the Senate could drive more compromise: After last week’s elections, both President Obama and Republican leaders said they will look for common ground. “Now the Republicans have control, they’re gonna want to demonstrate that they can make some things happen and they can work with the White House,” Dinges says.
There’s right wing support for funding infrastructure. The chairmanship of the Senate Committee on the Environment and Public Works is passing to Jim Inhofe (R-OK). He’s staunchly against taking action to rein in climate change, but all for spending on infrastructure—one of the few areas he sees as appropriate for federal intervention. Inhofe is ready to work with outgoing chair Barbara Boxer (D-CA) on a new transportation bill, Politico reports.
The conservative US Chamber of Commerce supports raising the gas tax as “a smart, fair, and achievable way” to meet funding needs:
Longterm federal funding is crucial, Dinges says, because those dollars make up roughly half of all spending on infrastructure, and the current “year to year thing makes it tough on states to plan, and they tend to hold back.”
In July, Obama urged Congress to increase funding for infrastructure projects, and proposed generating $302 billion over four years, partly by closing corporate tax loopholes. That plan went nowhere, but in remarks following the midterm elections, the president said he still wants to make progress: "Traditionally, both parties have been for creating jobs rebuilding our infrastructure -- our roads, bridges, ports, waterways. I think we can hone in on a way to pay for it through tax reform that closes loopholes and makes it more attractive for companies to create jobs here in the United States."
Below the federal level, there’s hope for those who want to see improvements to American infrastructure. In last week’s elections, California voters approved a $7.5 billion bond to increase water storage capacity and deal with droughts. More than 80 percent of Texas voters said yes to a plan to put half the state’s oil and gas revenues into a highway fund. Hawaii, Rhode Island, Wisconsin, and Maryland all voted to augment or protect infrastructure funds.
"Red states and blue states have taken action," Dinges says. Now it's a matter of getting something done in Washington.
1Post updated November 13 at 4:30 EST to correctly describe the length of a potential funding patch.
