The White House distanced itself from a proposal to sell reserved oil that has been stockpiled to prevent an energy crisis to help pay for transportation projects.
Lawmakers are facing a July 31 deadline for the expiration of current infrastructure funding, and senators are looking at a package of roughly $80 billion in offsets that includes revenue from sales of oil that is currently stored in the Strategic Petroleum Reserve (SPR).
The White House has endorsed a smaller package of $8 billion that relies on $3 billion worth of savings from Transportation Security Administration fees and $5 billion in tax compliance measures to fund road projects through Dec. 18 that has been passed by the House.
{mosads}White House Press Secretary Josh Earnest distanced the administration from the oil aspect of the emerging Senate proposal, however.
“Well at the risk of unintentionally suggesting to some people who are closely watching the energy markets that this may be telegraphing a decision about a sale, I don’t have a specific comment on that,” Earnest said.
“I will just say as a general matter that we have indicated in a written statement our support for the five-month extension that the House considered last week and approved, primarily as a mechanism for buying time to reach an agreement on a longer-term highway funding bill,” he continued. “We have expressed our frustration at the repeated short-term extensions that we believe are entirely inconsistent with the best interests of our economy and the best interests of maintaining a modern infrastructure. So we believe a serious long-term investment is needed in our infrastructure.”
Earnest said the White House supports the Senate’s goal of getting to a longer transportation funding measure, but he said the president would prefer his proposal to use revenue from taxing overseas profits to pay for the bill.
“The president has put forward his own specific proposal, the Grow America Act, that wouldn’t just ensure that we are funding our infrastructure over the long term…and above the current level, because there is so much built-up maintenance that’s required of our infrastructure in this country, and we’re hopeful that Congress will make a commitment similar to the one that we have proposed,” he said.
The Department of Transportation has warned that its Highway Trust Fund will dip below a mandatory critical level of $4 billion at the end of the month. The agency has said crossing that threshold will necessitate a cutback on payments to state and local governments.
Congress has been grappling since 2005 with a transportation funding shortfall that is estimated to be about $16 billion per year, and lawmakers have not passed a transportation bill that lasts longer than two years during that span.
The 18.4-cents-per-gallon federal gas tax has been the main source of transportation funding for decades, but the tax has not been increased since 1993 and more fuel-efficient cars have sapped its buying power. The federal government typically spends about $50 billion per year on transportation projects, but the gas tax only brings in approximately $34 billion annually.
The Obama administration has proposed a measure that calls for spending $478 billion over the next six years on the nation’s roads and bridges, but lawmakers have largely ignored the suggestion.
The Obama plan, known as the GROW AMERICA Act, would supplement gas tax revenue with a process known as “repatriation,” which would tax corporate profits being held overseas at a 14 percent rate.
Earnest said Monday “the proposal that the administration put forward is one that’s entirely paid for. So it’s one that is fiscally responsible.”
Republicans have said they are open to the president’s repatriation idea, but they have said the taxes should be collected at a lower rate and on a voluntary basis in the form of a “tax holiday” for companies that return profits to domestic banks.
Other transportation advocates are pushing for a gas tax increase to pay for a long-term transportation bill, but Republican lawmakers have ruled out a tax hike.
The nonpartisan Congressional Budget Office has estimated it will take about $100 billion, in addition to the gas tax revenue, to pay for a six-year transportation bill.