Obama Budget Features Proposed $478-Billion Transport Bill
President Obama’s nearly $4-trillion budget proposal for fiscal year 2016 has a picture of a bridge on its cover, reflecting one of the main elements inside the book: substantial spending on infrastructure, especially the initial year's $478-billion, six-year surface-transportation bill.
Along with the ambitious transportation proposal, the budget request, sent to Congress on Feb. 2, contains a mix of recommended boosts and cutbacks in other major construction accounts.
Leading Republicans, who now control both houses of Congress, blasted the overall Obama budget and said they would develop their own spending blueprint, with different priorities.
One point that has drawn bipartisan support is the need for a multi-year surface-transportation bill, preferably before a current short extension lapses on May 31.
The Obama administration rolled out a $302-billion, four-year transportation proposal in February 2014, but it gained no traction on Capitol Hill.
This time, the White House has put an even larger infrastructure plan on the table. Of the envisioned $478-billion, six-year total, the Federal Highway Administration would get $317 billion and Federal Transit Administration would receive $114.6 billion.
According to Dept. of Transportation figures, the biggest gains by far would come in the plan’s first year. Surface-transportation programs would soar by 40%, to $55.2 billion, in 2016, then rise modestly in each of the next five years, reaching $82.3 billion in 2021.
Looking at key line items, FHWA’s 2016 highway obligation ceiling would vault 24%, to $50.1 billion, and FTA’s spending would climb 68%, to $18.2 billion—both record amounts.
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The plan also proposes a federal infrastructure bank; new taxable America Fast Forward Bonds, similar to the now-expired Build America Bonds, and tax-exempt Qualified Public Infrastructure Bonds, aimed at public-private ventures.
The administration has floated all those proposals before, with the idea for public infrastructure bonds unveiled about two weeks ago.
Construction and transportation organization officials were pleased to see the plan. Stephen Sandherr, Associated General Contractors of America CEO, said in a statement, “The president’s budget proposal opens the door to a healthy debate about the best way to finance our long-term infrastructure needs.”
Pete Ruane, American Road & Transportation Builders Association CEO, said, “Passage of a robust, six-year transportation investment proposal as envisioned by the president would send the right signal to states planning new projects and to private-sector companies contemplating whether to hire workers and make capital investment decisions.”
Bud Wright, American Association of State Highway and Transportation Officials executive director, also praised the proposal but noted, “We know the hardest conversations will involve how to fund infrastructure investments.”
Obama proposes to pay for the increased surface-transportation increases via a onetime 14% “transition toll” on the estimated $1 trillion to $2 trillion in U.S. companies’ untaxed foreign earnings. The plan is more detailed than the one the administration proposed last year.
The Treasury Dept. estimates the 14% tax would raise $248.3 billion over the next five years.
Jeff Zients, director of the White House National Economic Council, said at a press briefing that the 14% tax "is not a one-off proposal but part of a broader set of corporate tax changes. He also said the tax "is very different than a repatriation holiday, which we believe is bad policy."
Ruane called on Obama and Congress “to check political expediency at the door and work together to quickly find a permanent funding solution for the nation’s transportation networks.”
Michael Melaniphy, American Public Transportation Association CEO, said, “The time has come to act.”
