Congress looks to punt on new highway bill funding, kicking problem into 2021

Like seemingly everything else in Washington, Republicans and Democrats are light years apart in negotiations over a new five-year federal highway spending bill, and seem likely to kick the problem into 2021.

That inaction—on what was once considered a so-called “must-pass” piece of legislation—is frustrating to leading trucking executives and others who rely on a modern American infrastructure network of interstate highways, bridges, ports and airports.

“We have to get some progress on an infrastructure package that makes sense and modernizes our network for logistics companies and trucking companies,” Derek Leathers, vice chairman, president and CEO at Werner Enterprises, the nation’s sixth-largest truckload carrier, told LM. Both sides (Republicans and Democrats) ought to be able to rally around this, but we are not making progress. That keeps me up at night.” 

Like most top trucking executives, Leathers said it was “more likely than not” that no decision will be made before the November elections. He said such lack of political will is unfortunate and detrimental to logistics operations.

“It’s a decision nobody seems to want to take before the election,” Leathers added. “People are dying for Congress to act, not inaction. People want bold choices. But clearly it takes political will for that. That’s tough to muster in an election year.”

At press time, the House and Senate appeared far apart on how to move forward on a bill that would replace the five-year FAST Act that was scheduled to expire on Sept 30.

The Senate Environment and Public Works Committee in July 2019 unanimously passed a $287 billion, five-year surface transportation bill. But three other Republican-led Senate committees — Commerce, Science and Transportation, Banking, Housing and Urban Affairs, and Finance — have sat on it and failed to act.

The Democratic-led House passed a five-year, $494 billion bill on July 20 without any Republican support. Senate Republicans have shown no interest in compromise on that measure.

The office of Rep. Sam Graves, R-Mo., the ranking member of the House Transportation and Infrastructure Committee, has signaled an extension was all but inevitable.

Basically, Congress seems intent on passing a continuing resolution at current funding levels to assure that state departments of transportation are continuing to receive federal highway funds to assure continuation of projects already started.

After the election that will decide who controls Congress and the White House, look for the new Congress to start work on a bipartisan surface transportation bill that can be signed into law by either President Donald Trump or former Vice President Joe Biden.

Some highway lobbyists are saying congressional inaction at this time might not be the worst thing to occur. That’s because the pandemic could become deeply transformative, as more Americans work from home and changing commuting patterns could be permanent. It might not be necessary to fund mass transit at the levels it was and it could make building some new highways unnecessary, lobbyists say.

“We’re skating to where the puck used to be,” says Randy Mullett, a veteran transportation consultant who has provided input on many past highway bills. “But there are so many unknowns I am not so sure we’re skating to where the puck will be. It’s the silly season on steroids. This one is really weird.”

Typically, federal spending on infrastructure is important because of the amount of state transportation budgets that revolve around infrastructure. While the need for funding is still there, where that money is spent could be vastly different this time, Mullett said.

“I am kind of happy they haven’t reached a deal so far,” Mullett said. “Everything so far is pretty much what we’ve always done with the assumption that people travel as much as they used to. But that may not be the case going forward.”

Clearly, however, COVID-19 has strapped state DOT finances. As people have curtailed commuting, state gas taxes have plummeted.

The stress on state highway budgets is palpable. South Carolina reported that because people are driving less during the COVID-19 pandemic, SCDOT has lost $49 million in gas tax fees since the first of the year. Similar stories are reported by state DOTs around the country.

The Federal Highway Administration reported traffic on U.S. roads in June 2020 was 13% below the 2019 levels. That’s a bounce from the COVID-lockdown peak of 40.2% down in April, which rebounded to 25.7% in May, the FHWA said.

In July, the American Association of State Highway and Transportation Officials called for $37 billion to help state DOTs navigate the crisis. The House bill that passed in May included $15 billion. The Senate measure is quiet on that subject.

What specifically happens with the federal highway bill will depend on who wins the presidential election. But it may depend more on who controls the Senate. If the Democrats control the Senate and do away with the filibuster rule so bills can pass with simple majority votes, they could really run through a lot of ancillary spending under the guise of infrastructure. Stay tuned.

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