The very, very long-awaited Fixing America’s Surface Transportation, Act, — also known as fast and the Highway Bill — was drafted by lawmakers in the House of Representatives and the Senate, who unveiled the US$305 billion measure to fund highways and mass-transit projects Tuesday in Washington, DC.
The US Senate on Thursday overwhelmingly approved the bill that would fund America’s roads, bridges, and mass-transit systems and revive the charter of the US Export-Import Bank.
The institution passed a fully funded five-year plan for surface transportation reauthorization with $US10.8 billion in grants for freight projects.
FAST specifically funds a freight-specific competitive grant program, the Nationally Significant Freight and Highway Projects Program, to the tune of some US$4.5 billion over the next five years, and a freight formula program, the National Highway Freight Program, at US$6.3 billion over the same five years.
US Highway Bill Drafted
The US bill outline federal spending for highway, transit and rail, it also includes a provision to revive the Export-Import Bank. The export-promoting bank’s charter expired last summer after conservatives successfully lobbied against the agency as “corporate welfare” that promoted “crony capitalism.” The new charter would be renewed through September 2019.
Lawmakers in both chambers generally praised the bill’s policy but criticized so-called budget gimmicks negotiators used to offset costs.
Six Year US Infrastructure Spending Plan
For years, lawmakers have been looking for new and lasting means to support the cash-strapped Highway Trust Fund. Congress hasn’t passed a highway bill that covers more than two years since 2005. Instead, funding has been allocated in small bursts in a series of stopgap measures.
The taxes on gasoline and diesel continues to be the primary contributor to the fund. Fuel taxes, however, haven’t been raised since 1993 and Americans’ recent proclivity for driving fewer miles and operating more fuel-efficient cars has only contributed to a crippling shortfall. Today, the federal government typically spends about US$50 billion each year on transportation projects, while the gas tax annually nets only US$34 billion to cover those costs.
FAST, however, would not only provide long-term funding, but actual funding mechanisms. Negotiators said they were compelled to begrudgingly include some schemes that were less than desirable, including one plan to pull roughly a billion dollars from the Federal Reserve, another to use revenue from a customs fee levied on airline and cruise passengers and another to sell oil from the nation’s emergency stockpile.
US Import-Export Bank Revived
The legislation returns the EXIM Bank to operation over conservative opposition that allowed its charter to expire on June 30. The agency, which helps US companies with foreign competitors, would have its charter renewed through September 30, 2019, but with a lower lending limit and other reforms.
Boeing, EXIM’s biggest beneficiary, and General Electric have warned that the loss of agency support could cause them to move manufacturing jobs out of the United States. Ethiopian Airlines also expressed concern in September about its ability to take delivery on Boeing jets without EXIM support.
To avoid higher taxes, the bill’s authors opted for a series of controversial measures including a transfer from the Federal Reserve’s surplus funds, an increase in customs fees and a requirement for the Internal Revenue Service to use private tax collection agencies.
The measures would leave the Highway Trust Fund with US$10 billion at the end of 2020, according to the nonpartisan Congressional Budget Office.
A number of add-on provisions in the legislation were the subject of intensive lobbying by the transportation industry and safety advocates.
The measure also includes funding for ferries and establishes the first-ever grant program guaranteeing financing for large-scale freight projects—money that could help loosen a freight bottleneck in Chicago or construct a rail-freight tunnel in New York Harbor.
The total price tag includes funds that have been authorized but not appropriated, such as roughly $8 billion for Amtrak.
Responding to a wave of deadly auto-safety defects, the package would increase the maximum civil penalty for motor-safety violations to US$105 million per incident from US$35 million and give whistleblowers an incentive to report defects by allowing them to receive at least 10 per cent of monetary penalties for cases exceeding US$1 million, depending on the kind of information shared with authorities.
National Highway Traffic Safety Administration funds also would increase, with almost $1 billion for safety programs over five years.
The biggest chunk of the bill’s contracting authority is $281 billion over five years for the Highway Trust Fund for roads, bridges, mass transit and other programs. It also includes more than $12.2 billion for capital investment grants, $10.36 billion for freight and rail-related projects, $980 million for National Highway Traffic Safety Administration vehicle safety provisions and hundreds of millions of dollars for other projects or agencies, including emergency preparedness.
Other aspects of the bill reflect several regional victories. It would keep in place a program that distributes shares of mass-transit funding for seven high-density Northeast states, including New York and New Jersey
The White House said on Friday President Barack Obama will sign the highway bill as soon as it arrives from Capitol Hill
“It’s not a perfect bill,” said White House spokesman Josh Earnest, adding that the bill is a compromise between Republicans and Democrats.
Obama will sign the bill, said White House spokesman Josh Earnest, who on Wednesday called the measure a “real step forward.”
André Albinati and Paul Moen are principals at Earnscliffe Strategy Group and former senior advisors to the Chrétien and Martin governments.
Change in US Law: 2014
A change in US trade law last year has made it easier for companies to show they’ve been injured by imports, sparking a number of disputes in paper products and steel, said Caitlin Webber, a Washington-based Bloomberg Intelligence analyst.
US industries typically file these types of complaints as a “last resort” when they feel they can’t otherwise compete in the market, Webber said.
“That’s what the industry wanted when they were lobbying for this,” Webber said in a November 13 interview. “They would say it’s more fair, an accurate reflection of the company’s position.”