GOP Offers Transportation Spending as Jobs Creator

(Reuters)

WASHINGTON -- House Republicans are pitching a six-year transportation construction plan as a major jobs bill that can win bipartisan approval before next year's election, a key GOP lawmaker said Monday.

Even while prospects for enacting President Barack Obama's jobs plan have dimmed, Republican backing has grown for a long-term transportation bill to boost employment. Transportation and road-building industries, especially the beleaguered construction industry, are also pressuring lawmakers to make a multi-year commitment of federal funds. Without that, it becomes difficult for states and private investors to finance large infrastructure projects.

The most significant obstacle to passing the bill was eliminated when GOP leaders recently agreed to keep spending on highway programs at current levels even though gas tax revenues are declining, said Rep. John Mica, chairman of the House Transportation and Infrastructure Committee.

The GOP bill would spend about $285 billion over the six years, but would spur far greater investment in roads, bridges, and transit systems through federal loans and loan guarantees, Mica said at a media briefing.

"This is what we hope will be the core of not just a Republican, but a congressional jobs effort," Mica, R-Fla., told reporters.

Still unclear is where Republicans will find the funds to make up as much as a $100 million shortfall between gas tax and other transportation tax revenues and what they are proposing to spend. House Speaker John Boehner, R-Ohio, suggested last month that royalties from expanding oil and gas development might be one way to find the money, but any proposal along those lines is likely to draw strong opposition from Democrats on environmental grounds.

GOP leaders are exploring a variety of possible funding sources, Mica said.

"We haven't come up with a solution, but we will find a way to fund at least current (spending) levels," he said.

He said his target for passing the bill is March 31, when current authority for highway programs expires.

Last month, Obama announced a $447 billion jobs plan that included new spending on infrastructure, education and aid to state and local governments paid for in part by tax increases on the wealthy. He also asked for $50 billion to immediately put Americans to work building roads, bridges, airport runways and other projects. But efforts to pass the full measure were blocked by Senate Republicans, who see the president's proposal as a second economic stimulus.

That's left Obama and his Democratic allies pushing lawmakers to pass the bill in individual pieces, an uncertain prospect at best.

Historically, highway programs — and, since the 1980s, transit programs as well — have been paid for primarily by gas and diesel taxes that go into a federal trust fund. Every five or six years Congress has passed a long-term plan for spending those funds.

But the last long-term transportation plan expired more than two years ago. Congressional efforts to pass a new plan stalled primarily because lawmakers have been unable to agree on how to pay for the program in the face of declining gas tax revenues. Boosting the gas tax is politically unpalatable to both parties.

Meanwhile, Congress has kept highway and transit programs going through a series of eight short-term extensions.

Earlier this year, House GOP leaders were adamant that any transportation bill be paid for entirely through trust fund revenues to prevent increasing the federal deficit. That would have required cutting spending by about a third.

Since then, "I think everyone came to the understanding we need more money in transportation," Mica said.

Mica's Senate counterpart, Environment and Public Works Committee chairman Barbara Boxer, D-Calif., has proposed a two-year, $109 billion transportation bill. She and Finance Committee Chairman Max Baucus, D-Mont., have been struggling to find an extra $12 billion to meet lawmakers' demands that the bill be fully paid for.

Committee action on the Senate bill is scheduled for early November.

Boxer said she was pleased House Republicans have given up demands that transportation spending be cut by a third.

"Their support for higher funding levels is a very positive thing," Boxer said in an email. "I am confident that (the Senate) will pass a two-year bill which would be fully paid for, and I am very open to a six-year bill as long as it is fully paid for in a way that has bipartisan support and does not cut jobs elsewhere in the economy to pay for transportation."

Mica rejected Obama's proposal to create a $10 billion "infrastructure bank" to spur private sector investment in transportation and other projects of national or regional significance. He said it would take too long and cost too much to set up the bank. Republicans have also said they fear a bank might be vulnerable to political considerations when choosing which projects to fund.

However, both Mica and Boxer are proposing to increase an existing federal program that provides loans and loan guarantees for major transportation projects. The Transportation Infrastructure Finance and Innovation Act program currently spends about $120 million a year; both lawmakers would boost its funding to $1 billion annually.

"There's not that much that separates us on this," Mica said.