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Foxx pushes business tax reform; CBO says plan falls short

The CBO says Obama’s plan is at least $100 billion short of where it needs to be.

The Trucker News Services

5/14/2014

A one-time tax change related to U.S. companies’ overseas earnings is the most feasible way to provide the additional funding needed to rebuild aging highways and mass transit systems, Transportation Secretary Anthony Foxx said.

Other ideas being considered are falling flat and time is running out to replenish the Highway Trust Fund this year, Foxx said at a Bloomberg Government event in Washington today. Proposals to increase the 18.4-cent-per-gallon gas tax or other fees on drivers can’t clear Congress anytime soon, Foxx said, Bloomberg reported.

According to a DOT spokesman, President Barack Obama’s proposed four-year, $302 billion bill would include “addressing the $1 trillion to $2 trillion of untaxed foreign earnings that U.S. companies have accumulated overseas” and reforming “accelerated depreciation,” among other things.

He told The Trucker that the president’s 2015 budget will include “a $150 billion allowance for these one-time savings, which it proposes to use to fill the Highway Trust Fund shortfall and help pay for this four-year transportation proposal.”

The “one-time savings” are not a long-term fix, and the Congressional Budget Office (CBO) says even if the president’s plan is approved highway funds will come up short again in a few years.

The CBO says Obama’s plan is at least $100 billion short of where it needs to be.

And, the above-mentioned business tax reforms on “trillions” accumulated overseas have not been approved, or even voted on.

Seeking to accelerate the debate, Obama is scheduled to travel tomorrow to New York to discuss U.S. infrastructure needs near the 58-year-old Tappan Zee Bridge, which was designed to last just 50 years and is scheduled for a $3.9 billion replacement.

A Senate panel yesterday unveiled bipartisan legislation that would authorize six years of U.S. highway programs, acting with construction projects at risk of slowing months before the November congressional elections.

The bill drafted by Senate Environment and Public Works Committee Chairman Barbara Boxer and other members would provide the same amount of money each year as in the current two-year, $105 billion legislation expiring in September, plus inflation.

It has no funding, however, leaving it up to the Senate Finance Committee.

House Transportation and Infrastructure Committee Chairman Bill Shuster, a Pennsylvania Republican, has yet to advance a companion proposal in that chamber. The Senate committee plans to complete work on its measure this week.

Companies including Caterpillar Inc., United Parcel Service Inc. and Honeywell International Inc. are pushing for a long-term bill, after a 2012 drive on legislation collapsed in a dispute over funding and resulted in the current two-year law that expires at the end of September, according to Bloomberg.

House Ways and Means Committee Chairman Dave Camp, a Michigan Republican, joins Obama in advocating overseas earnings as a source of revenue to fund infrastructure. Yet his counterpart in the Senate, Finance Committee Chairman Ron Wyden, an Oregon Democrat, said he favors a gas-tax increase and also wants to examine ideas that include resurrecting the Build America Bonds program created under Obama’s 2009 economic stimulus measure.

Senator Orrin Hatch of Utah, the finance committee’s top Republican, said he wants to see a method of financing that retains the current user-pays approach and said he also wants to

The Transportation Department has said the Highway Trust Fund is projected to dip below the critical level of $4 billion as soon as July. That could cause a slowdown in reimbursements to states and a halt in some construction work. It’s on track to fall below $1 billion by October, he has said.

As many as 700,000 jobs would be lost over a year as the trust fund starts to reach the point where it can’t pay its bills, and that about 112,000 roadway projects and 5,600 transit projects could be delayed or halted, according to the Obama administration.

“The moment is dire,” Foxx said. The trust fund “is quickly running toward insolvency.”

Both Wyden and Camp say they’re seeking a long-term funding solution, while also considering some kind of stopgap patch to buy more time this year. In the past, that’s been accomplished with a short-term infusion from the government’s general fund.

Business groups and labor unions are stepping up their own efforts starting this week, Bloomberg reported. Most of those organizations favor a boost in the gasoline tax to finance a long-term highway bill, even though lawmakers in both chambers say that can’t clear Congress in an election year.

The Laborers International Union of North America yesterday announced a $1 million expenditure on billboards and radio and online ads in Pennsylvania, Ohio and Michigan. All three states have some of the nation’s oldest, crumbling roads and bridges, said Terry O’Sullivan, LIUNA’s general president.

“Another short-term patch simply duct-taping the roads and bridges we drive on must be off the table,” O’Sullivan said at a news conference yesterday.

The U.S. Chamber of Commerce and the National Association of Manufacturers will bring small-business owners to Washington in early June to lobby for a long-term measure, said Janet Kavinoky, the chamber’s top transportation lobbyist.

Another group, Building America’s Future, has developed a mobile-phone application that allows people stuck in traffic to choose a message of complaint from a drop-down menu to send to their lawmakers as they wait for the gridlock to clear. The app, “I’m Stuck,” will be expanded as an offering to more users in coming months, said Marcia Hale, the president of the group that is led by former Pennsylvania Governor Ed Rendell and former Transportation Secretary Ray LaHood.

The Trucker staff can be reached to comment on this article at editor@thetrucker.com.

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