The trillion-dollar question in Washington is not whether the federal government should play a role in infrastructure development, but where to find the funds.
“Money is the big elephant in the room,” Rep. Nick J. Rahall II, D-W. Va., said at the first Transportation and Infrastructure Committee hearing of the 113th Congress.
No one, not even the most fiscally conservative Republicans, questioned the need to invest in infrastructure, but as Rahall said, “How do we pay for it?”
Panelists testifying at the hearing agreed all revenue options need to be on the table, but most options include politically unpopular words such as “tax” or “toll.”
First up, the federal fuel tax, which U.S. Chamber of Commerce President Thomas J. Donohue stressed is really a user fee for access to U.S. roads, not a “gas tax.”
“This is a user fee that lets us get from place to place and move our goods,” Donohue said. “It’s not a tax on your income; it’s a fee to use the nation’s infrastructure.”
Donohue’s support for higher gasoline and diesel taxes drew a stinging rebuke from Rep. John Mica, R-Fla., T&I member and former committee chairman.
In a statement, Mica accused Donohue of “backsliding” into a “myopic tax and spend agenda,” not something usually attributed to the nation’s leading business lobbyist.
Others expressed surprise. “I stand here in awe seeing Tom Donohue say, ‘tax us,’ ” said Rep. Thomas E. Petri, R-Wis. But Donohue has long advocated raising gas taxes.
“What shippers are looking for is a system that allows them to move their goods in a time-dependable way, whether on rail, on trucks or barges,” Donohue said.
User fees are the most dependable way to ensure that system remains dependable, he argued. “And the holes are getting big enough people are starting to listen.”
Former Pennsylvania Gov. Ed Rendell agreed raising the federal fuel tax — static since 1993 — is a short-term necessity, but wants a longer-term solution.
“We need to start looking at some type of vehicle mileage tax,” Rendell said. “I would envision that four or five years down the road we wouldn’t have a gas tax.”
“I don’t know that I’m ready to go that far yet,” Donohue said, noting that while he agreed with Rendell on many points, he “hasn’t jumped off that bridge.”
Rendell also backed broader tolling, both by states and through public private partnerships. “Lift the ban on states tolling federal highways,” he urged Congress.
Terence M. O’Sullivan, general president of the Laborers’ International Union of North America supported an “all-of-the-above” approach to infrastructure funding.
“At the end of the day, the federal government must lead,” he told the committee. “What we need is a Marshall Plan” to deal with long-term infrastructure needs.
That may be a lot to ask from a government that lumbers from showdown to fiscal showdown, postponing decisions and now facing automatic spending cuts.
New T&I Chairman Bill Shuster, R-Pa., promised to have a plan, including a freight plan, within two years. The biggest step will be determining how to pay for it.
“Where we need some help is coming up with the political will or courage,” Rahall said. “I’m not very optimistic it’s going to come from this institution.”
“We can come to resolution,” Donohue said, “once we make one fundamental decision — that we are going to increase revenue.” That decision is still miles away.