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Tags: Senate | Highway | jobs | Republicans | Democrats

Senate’s Highway Bill Promises to Create Some Jobs, Kill Others

Thursday, 15 March 2012 06:26 AM EDT

WASHINGTON — Washington lawmakers of both political parties worked together — at least for a day — and passed a bill business groups said is vital to the U.S. economy.

Yet the Senate’s 74-22 bipartisan vote to approve a $109 billion surface transportation plan belied the difficulties ahead as a more divided House takes over the debate with 16 days left until the current highway law expires.

“Our nation’s neglected transportation system has created bottlenecks and inefficiencies that are getting worse every day,” said David French, the National Retail Federation’s senior vice president for government relations. “As bad as things are, they will only get worse if Congress misses the deadline we face.”

Spokesmen for construction trade groups and companies including Caterpillar Inc., the largest construction and mining equipment maker, said they will be pressing the House to act by March 31. The federal government’s authorization to pay for highway construction and collect an 18.4 cent per gallon gas tax to pay for it will expire on that date.

“We believe that investing in our nation’s infrastructure will help keep America competitive in the global economy over the long run and will help drive employment in the near term, both of which are positive,” said Jim Dugan, a Caterpillar spokesman.

When House leaders tried to bring a different bill to the floor last month, majority Republicans were so divided over how to pay for projects and whether mass transit should keep getting money from U.S. gasoline taxes that it wasn’t taken to a vote.

Officials in state capitals were assessing a last-minute change in the Senate bill on Wednesday that could hamper efforts to use private financing to build more roads in their states. That part of the measure was “a vote for the crumbling of America,” Indiana Gov. Mitch Daniels said.

“It elevates a big-government ideology over a practical need to build our roads, bridges and other infrastructure,” the Republican Daneils said. “It is a backward and senseless proposal, and we’ll urge the House to put it directly in the wastebasket of bad ideas.”

A provision written by Sen. Jeff Bingaman, a New Mexico Democrat, discourages states from leasing roads to private operators, combining with other parts of the bill that limit tax breaks for companies such as Macquarie Infrastructure Co. that operate highways for states.

In 2006, Indiana leased its turnpike for 75 years to Macquarie and Cintra, a unit of Madrid-based Ferrovial SA, in the largest U.S. public-private road lease deal to date.

Virginia Transportation Secretary Sean Connaughton called the provision a “job killer” that runs against U.S. law and exposes states to delay, uncertainty and potential litigation.

“Due to the economy, we are getting a lot of projects moving due to the lower prices,” Connaughton said. “The Senate action will stop cold those projects and their associated jobs.”

Paula Chirhart, a spokeswoman for Macquarie Group Ltd., declined to comment.

The U.S. Chamber of Commerce, the largest business lobbying group in Washington, worked to get a highway bill passed while trying to defeat the Bingaman proposal.

The measure will have an “unnecessary chilling effect” on private investment that will disproportionately harm high-growth states like Nevada, North Carolina and Texas, Alex Herrgott, the chamber’s director of transportation and infrastructure, wrote in a March 12 note to Senate offices.

“The enormity of infrastructure needs allow that there will be room for any and all legitimate funding sources,” said Paul Yarossi, president of Kansas City-based HNTB Holdings Ltd. “New and innovative ways to deliver transportation systems can coexist with the traditional methods of delivery.”

At the Capitol on Wednesday, Democrats and Republicans in the Senate celebrated a moment of bipartisanship. Sen. Barbara Boxer, the California Democrat who championed the bill, said it would preserve 1.8 million jobs and create another 1 million.

Sen. James Inhofe, an Oklahoma Republican, said conservatives should be big spenders in only two areas: transportation and national defense.

“This is the kind of bill that’s easy to demagogue,” Inhofe said of Republican colleagues criticizing the legislation’s price tag. “But it will go down as one of the most significant pieces of legislation this year.”

The White House budget released in February proposed $476 billion over six years on surface transportation, with an immediate $50 billion this year.

“Maintaining a world-class infrastructure system is critical to creating an economy built to last,” White House spokesman Jay Carney said. The Senate bill “keeps Americans at work maintaining our nation’s vital infrastructure and provides states and localities the certainty they need to plan ahead.”

The most recent comprehensive surface-transportation bill, passed in 2005, allocated about $286 billion over six years. Highway programs have operated at the same spending levels since 2009.

“Presidents, Republicans and Democrats have always said you can’t have a thriving economy if you can’t move goods and you can’t move people, and you can’t do it efficiently,” Boxer said.

© Copyright 2023 Bloomberg News. All rights reserved.

Thursday, 15 March 2012 06:26 AM
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