DOT Secretary LaHood on the highway bill: “There’s a consensus on what the needs are”

If the tax-adverse Congress can figure out how to pay for it, the stalled highway bill in Washington will pass at adequate funding levels to meet some of the nation’s dire infrastructure needs.

That’s the word from Department of Transportation Secretary Ray H. LaHood, who told LM in an exclusive interview that the “big dilemma” in passing the stalled transport measure is how to pay for it.
 
“I think that there’s a consensus in Congress on what the needs are in America,” La Hood said. “Everybody knows where the bad roads are. Everybody knows where the bad bridges that need to be fixed. So I think there’s a pretty good consensus on what needs to be done.”

LaHood, a former seven-term Republican Congressman from Illinois LaHood who announced this week he plans to step down from his position at the conclusion of his term in 2012, said finding ways to pay for it remains the stumbling block. But he noted as a former member of the House Transportation and Infrastructure Committee that panel passed two transportation bills with more than 380 votes in the House over 80 votes in the Senate.
             
“Transportation has always been bipartisan,” LaHood said. “There are no Republican or Democratic bridges. There are Democratic or Republican roads. There just aren’t. There’s Americans who know how to build infrastructure, who know how to build American infrastructure. And so I think if the Congress can figure the pay for they can pass a long term bill.”
             
Although trucking interests have favored an increase in the federal fuel tax—currently 18.4 cents a gallon on gasoline, 23.4 cents on diesel, unchanged since 1993—LaHood all but ruled that out as a method for paying for what is likely to be a six-year measure.

Since the old highway bill expired two years ago, the nation’s infrastructure needs are being paid for by a series of short-term funding measures at about the level of $51 billion annually. Critics said the nation needs to at least double that level of spending, but the Republican-controlled House seems unlikely to increase spending past current levels.

House Republicans recently dropped their threat to back spending cuts of up to 30 percent below current spending levels. But House Speaker John Boehner, R-Ohio, recently told the Economic Club of Washington that he sees a link between highway spending and domestic oil production.

“I’m not opposed to responsible spending to repair and improve infrastructure,” Boehner said. “But if we want to do it in a way that truly supports long-term economic growth and job creation, let’s link the next highway bill to an expansion of American-made energy production.”

LaHood all but ruled out raising the fuel tax to pay for highway improvements.

“With 9 percent unemployment, with so many people out of work, with a very bad economy, the President feels like it’s not the time to be raising gasoline taxes,” LaHood said. “Because some people can little afford to buy a gallon of gasoline. There are a lot of people out of work. A lot of families are hurting, and the President has said we shouldn’t be raising the gasoline tax. There are some other ways to do it.”

Specifically, the President has proposed pay for his $440 billion American Jobs Act by increasing taxes on wealthy Americans. “He’s offered the pay for that. And some that of that would be raising taxes on people who make a lot of money or who have a lot of money,” LaHood said.
         
The Transportation Secretary also favors the idea of an infrastructure bank. In the American Jobs Act, there is $10 billion in seed money for such an idea, which LaHood said would leverage billions of dollars in private investment to help spur and pay for infrastructure improvements.

The federal fuel tax will remain a component of this highway bill and in the future, LaHood said. It just may someday not be the largest component, as various other measures (tolls, vehicle-mile tax, congestion pricing, for instance) take over.

“I think first of all we’re always going to have the gas tax [but] we’re opposed to raising the gas tax right now in a lousy economy,” LaHood said. “So we use that as our base and then we begin to work with Congress on ways we can come up with additional funding. Rather than me listing three or four things, what I’d rather do is sit in a room with my former colleagues and talk to them about ways that we can pay for the things that we know need to be done.”

Given LaHood’s powerful personality and his past history with his former House colleagues don’t bet against this happy warrior.