(Updates with state funding provision starting in 12th paragraph.)
July 6 (Bloomberg) -- Barbara Boxer, the California Democrat who chairs the Senate public works committee, said she will propose a two-year, $109 billion bill to pay for U.S. highway and other construction projects.
The House version of the bill will call for $35 billion a year in spending over six years, John Mica, the Florida Republican who chairs the House transportation committee, said.
Their competing proposals, described in separate briefings for reporters in Washington today, set the stage for a debate on how to fund infrastructure projects at a time when Republicans want to reduce government spending, and the Highway Trust Fund, which pays for highway and mass transit projects, is on course to become insolvent next year.
“A two-year bill is a recipe for bankrupting the trust fund,” Mica said.
The Senate committee wanted a six-year bill and plans to propose the shorter measure to maintain existing funding levels, Boxer said today. The two-year bill needs $12 billion in additional funding to reach the $109 billion total, she said.
Money for the Senate bill could be moved from defense spending, Boxer said.
“We spend $12 billion a month in Iraq and Afghanistan,” Boxer said. “All we are looking for here is $12 billion over two years.”
‘Cards Dealt Me’
The House adopted a resolution in April that limits the amount of money spent on transportation projects to what is in the Highway Trust Fund. The transportation committee’s proposal had to stay within those parameters, Mica said.
“I have to live with the cards dealt me,” Mica said.
The House resolution results in a 36 percent reduction in transportation spending, Boxer said. That cut would cause the loss of 500,000 highway jobs and an additional 100,000 transit jobs, she said.
“Unless the committee acts to change it, that cut becomes very real,” Boxer said.
The House transportation committee proposal would send an unspecified amount of money from the highway fund to the states for use in infrastructure banks, Mica said. The money would be allocated by formula in a way similar to how Highway Trust funds are allocated, he said.
If a state didn’t have an infrastructure bank it couldn’t receive money, and any unused money would be sent back to the trust fund, he said.
More details of the proposal will be unveiled in Washington tomorrow, he said.
President Barack Obama has proposed a $556 billion, six- year transportation plan without saying how he would pay for it. House Budget Committee Chairman Paul Ryan has proposed $167.9 billion over the same period and restricting spending to what the Highway Trust Fund receives in fuel taxes.
Mica has said he is opposed to any bill less than six years in length and has said in jest that he would “beat up” anyone who suggests a shorter term. He said today that his bill will limit spending to estimated revenue of the trust fund supplemented by expanding a Department of Transportation loan program and public-private partnerships.
The Highway Trust Fund faces insolvency next year after six years of declining balances, according to the Congressional Budget Office. Obama and Republicans have ruled out a gas-tax increase and have suggested making up the shortfall by attracting more private-sector funding.
Congress has added $34.5 billion to the trust fund from the general fund since 2008 because incoming revenue couldn’t pay for existing projects. The federal gasoline tax was last raised in 1993 and stands at 18.4 cents a gallon. The decline results from improvements in vehicle fuel-efficiency and not adjusting the tax for inflation.
The U.S. Chamber of Commerce, which is the largest business-lobbying group and opposes most tax increases, and Obama’s federal deficit commission have backed a 15-cent-a- gallon fuel-tax increase.
Congress passed its last long-term highway funding legislation in 2005. Funding has continued through a series of extensions.
--Editors: Bernard Kohn, Michael Shepard
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