Senators began exploring ways to pay for President Trump’s $1 trillion infrastructure package on Wednesday, taking up the biggest question hanging over his ambitious plans.
Panelists and lawmakers at a Senate Appropriations subcommittee hearing seemed to agree that it’s going to take a wide variety of funding tools to deliver on the kind of massive investments Trump has promised.
“When I first heard the president’s plan for a $1 trillion infrastructure investment, I was extremely excited. But I started thinking about the financing, and the fact no one was really talking in specific terms,” said Sen. Susan Collins (R-Maine), who chairs the subcommittee on transportation, housing and urban development.
“It’s my hope that this hearing today will help advance the dialogue as we move forward on what could well be one of the few bipartisan activities of this Congress.”
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The hearing came the same day as a scheduled infrastructure meeting at the White House expected to include Transportation Secretary Elaine Chao, Energy Secretary Rick Perry and business leaders such as Tesla CEO Elon Musk.
One of Trump’s chief campaign pledges was to repair U.S. roads, bridges and airports — an effort he says will create jobs and boost the economy.
In an address to Congress last month, Trump reiterated his commitment and called on Congress to move a $1 trillion infrastructure proposal that would be “financed through both public and private capital.”
But the details of his plan — and how it would be paid for — have yet to be written. Coming up with a palatable way to offset that much spending will likely be the legislation’s biggest hurdle on Capitol Hill, where transportation funding has typically given conservatives heartburn and where long-term solutions have long been elusive.
Transportation leaders representing businesses, airports and highways told senators on Wednesday that there isn’t a silver bullet to solve the funding challenge.
“There is no one solution that’s going to solve all these funding and financing needs,” said Edward Mortimer, executive director for transportation infrastructure at the U.S. Chamber of Commerce. “We want communities to have a toolkit of options.”
The American Association of State Highway Transportation Officials presented lawmakers with a “matrix” of 35 different ways to fund surface transportation needs.
Some of the options include charging fees based on the number of miles a vehicle travels, increasing existing sales and tires taxes, reallocating revenue from the Harbor Maintenance Trust Fund, and imposing a driver’s license surcharge.
“There are pluses and minuses to all these approaches,” said Beth Osborne, senior policy adviser for Transportation for America.
But the funding source was most consistently highlighted was raising the federal gasoline tax or at least indexing it to inflation. Revenue from the gas tax is deposited into the Highway Trust Fund.
Raising the tax, which hasn’t been done in over 20 years, is generally considered a nonstarter among Republicans.
Transportation leaders pointed out that an increasing number of red states have opted to increase their state gas taxes and that no lawmaker has lost their seat over it.
“We understand this is politically the most challenging, but we are committed to making sure this is addressed this year,” Mortimer said. “It comes down to political courage.”
For airports, the favored funding solution is lifting the federal cap on passenger fees, according Todd Hauptli, president and CEO of the American Association of Airport Executives.
The current limit on the passenger facility charge, which airports charge passengers to help pay for facility upgrades, is $4.50.
“This is the single biggest bang for the infrastructure buck, with the least impact on the federal budget,” Hauptli said.
Private financing, the funding method preferred by conservatives, was also brought up at the hearing. Offering tax credits to private investors was the cornerstone of a $1 trillion proposal that Trump floated on the campaign trail.
Sen. John Hoeven (R-N.D.) pointed to his bill that would expand the availability of tax-exempt bonds and create a new tax credit for state and local governments trying to pay for large construction projects, which transportation leaders agreed should be on the table.
But lawmakers and witnesses both emphasized that private financing represents just one part of the overall solution and should not replace core federal funding. Critics have long complained that the private sector model doesn’t benefit projects that don’t come with a built-in revenue stream.
“That’s not going to help rural America at all,” said Sen. Patrick Leahy (D-Vt.), ranking member on the full committee.
Transportation leaders also discussed how they want to see infrastructure dollars flow through states and cities. They advocated for stabilizing the Highway Trust Fund and boosting money for existing federal grant programs, such as Transportation Investment Generating Economic Recovery (TIGER) grants.
“This program is very popular with local and state governments and transportation agencies across the country because of its wide-ranging eligibility: it can fund everything from ports to rails to transit to highways,” Osborne said.
“Since the loss of earmarks, this is one of the only programs that allows local and country governments to directly access federal funds.”
But Collins warned that she “fully” expects to see TIGER grants slashed in the president’s proposed budget.
And Sen. Jack Reed (D-R.I.), ranking member on the subcommittee, said he was “deeply concerned” that Trump is reportedly considering massive budget cuts.
“If we adhere to the steep budget cuts that the administration is contemplating for nondefense discretionary spending, it would be impossible to sustain even today’s funding levels for critical infrastructure programs,” Reed said.
“If we’re going to make progress, we need to do more. Much more.”