Streetsblog Capitol Hill

Congress has already delayed their holiday recess by a week, and members are hoping another delay won’t be necessary. Among the yet-unfinished business: an extension of the payroll tax cut. House Speaker John Boehner plans to hold a vote today on his bill, which marries an extension of the payroll tax cut to the controversial Keystone XL pipeline. While expected to sail through the House, such a partisan bill is unlikely to pass the Senate. Enter Senators Claire McCaskill (D-MO) and Susan Collins (R-ME).

Senators Collins, left, and McCaskill at their press conference. Image: STLtoday

Last week, McCaskill and Collins introduced the ambitiously-named Bipartisan Jobs Creation Act. The bill begins with the payroll tax cut and wraps it in additional tax cuts, deregulation measures, and a $35.8 billion infrastructure investment program. The whole thing would be paid for by eliminating some subsidies for oil companies and by instituting a surtax on millionaires’ income—though exceptions will be made for small business owner-operator “job creators.”

The two senators are generally touting this bill as a tax relief bill first, and a pay-your-fair-share bill second—infrastructure gets third-stringed at best, but the provisions are still worth looking into.

The McCaskill-Collins infrastructure plan [PDF] includes $10 billion to capitalize state infrastructure banks and $25 billion for highways and bridges—just highways and bridges. Out of $25 billion—about half an average year’s transportation spending by the federal government—not a dime goes to transit.

By promoting state infrastructure banks, McCaskill and Collins are throwing their weight behind the Republican vision for infrastructure spending and against the President’s. The President and a number of other prominent figures have advocated to no avail for the creation of a National Infrastructure Bank, and Politico reports that they’ll try again next year—to the familiar tune of $10 billion. Meanwhile, House Transportation Committee Chair John Mica has included support for state infrastructure banks—not a national one—in his reauthorization bill. The senators opted for state I-banks in this case because they are an existing program that could be expanded, while “there is no consensus yet on how to address a National Infrastructure Bank,” according to Senator McCaskill’s press secretary, John LaBombard.

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Two competing versions of a transportation-related job creation bill went down yesterday in the Senate. The first, the Rebuild America Jobs Act (S.1769), was a Democratic proposal, modeled on President Obama’s job creation bill, to invest $50 billion for infrastructure and another $10 billion as seed money to create a new national infrastructure bank.

Bills to put unemployed construction workers back on the job keep going down in Congress.

Given Republican opposition to what they consider a repeat of a failed stimulus – and to an infrastructure bank they say is unnecessary at best and politicized at worst — the failure of the bill is no surprise. The bill garnered a slim majority — 51-49 — but not enough to overcome the threat of a GOP filibuster.

Meanwhile, the Republican proposal would have pushed back many health, safety, and environmental regulations that corporations consider onerous. Defeated in a 47-53 vote, the bill also would have extended SAFETEA-LU for two more years — nearly matching the length and spending levels in the bipartisan EPW proposal — without funding the shortfall such spending would cause to the Highway Trust Fund. The bill wouldn’t have been a “clean” extension of current law, though, since it eliminated the “set-aside” for bike and pedestrian infrastructure, making it the fourth attempt in less than two months by Senate Republicans to eliminate or weaken TE — and the fourth failure.

This morning, the Senate is debating two transportation-related bills: the Rebuild America Jobs Act (S.1769) and the Long-Term Surface Transportation Extension Act (S.1786).

Sen. Hatch makes yet another attempt to "give states the authority" to kill bike/ped spending.

The Rebuild America Jobs Act is a piece of President Obama’s jobs bill that was broken off in hopes that it could pass on its own. It would invest $50 billion on infrastructure projects and another $10 billion in seed money for an infrastructure bank, to be paid for with a 0.7 percent surtax on incomes over $1 million.

Taxing the rich and increasing government spending — now there’s a recipe for some partisan rancor.

So far Democratic Leader Harry Reid and Republican Leader Mitch McConnell have traded barbs that each is just engaged in election-year sloganeering. Reid said 76 percent of the American people approve of the plan to tax the “top two-tenths of one percent.” But McConnell said those 76 percent might change their minds if they knew that “four out of five of those high-income individuals are actually business owners.” They haven’t talked much about the merits of infrastructure investment.

Note that not all of the big players who lined up behind increased investment and an infrastructure bank favor this bill. Bruce Josten of the U.S. Chamber of Commerce, for instance, said yesterday in a letter to senators [PDF] that the Rebuild America Jobs Act “fails to provide the multi-year funding certainty and fails to establish the policy and program reforms sorely needed to create jobs and support economic growth” and “only continues to delay and frustrate the serious and much needed debate on the sustained long-term investment required to address America’s infrastructure crisis.”

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There’s been a lot of adulation heaped upon the TIFIA loan program lately. Both houses of Congress are ready to increase funding for the program nine times over, from $100 million to $1 billion a year – despite warnings from outside groups that there may not be enough eligible projects to use up all that money.

The Staten Island Ferry has gotten some TIFIA funding. Some say an expanded TIFIA would do everything an infrastructure bank would do, but others say it wouldn't allow for large-scale community planning. Photo: SI Ferry

The TIFIA program has been around since 1998 but money pressures have led to a steep uptick in applications over the past few years. Some have criticized it for its lack of transparency in decision-making and suggested that it might be more effective housed outside of USDOT and functioning independently.

“Is TIFIA the first perfect federal program?”

Nevertheless, Congressional Republicans have thrown their full support behind the program, mainly as a counterweight to the president’s proposed infrastructure bank. Consistent with their desire to limit the growth of the federal bureaucracy, they resist the idea of creating an entirely new entity, even though the bank would be independent from the government, a la the Export-Import Bank.

There are two competing infrastructure bank bills in the Senate and a new one introduced earlier this week in the House. The Senate is planning to vote next week on a bill to spend $50 billion on infrastructure with another $10 billion in seed money for a bank – pieces of President Obama’s jobs bill, which has been dismembered for separate votes. Next week’s bill isn’t expected to pass. Indeed, many members think TIFIA is the way to go.

At a House Transportation Committee hearing earlier this month, nearly every Republican present spoke out in favor of expanding TIFIA instead of creating a new bank. Chair John Mica asked why a bank was needed when “we have a successful example” in TIFIA.

One of the things that the infrastructure bank can do is enter into long-term relationships with people who have decade-plus-long plans. They’re trying to finance a plan. What Washington knows how to do is finance a segment of a project. The current TIFIA process does not allow us to do that.

- Roy Kienitz

Highways and Transit Subcommittee Chair John Duncan (R-TN) went as far as to ask, “Is TIFIA the first perfect federal program?” He noted, “Everyone has had glowing comments about TIFIA, and it’s a program that I support as well.”

Geoffrey Yarema of Nossaman LLP (a law firm specializing in public-private partnerships for infrastructure projects) told Duncan TIFIA wasn’t perfect but that it did have 12 years of solid experience. He suggested it be “right-sized” by adding staff and he wants to “change it from a discretionary decision-making process that has the potential for being politicized – and some would say the reality of being politicized – to a first-come-first-served program.”

That change, however, would eliminate the part of TIFIA reformers like most: The fact that it has the power to encourage innovation and goal-oriented, performance-based strategic transportation planning.

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House Transportation Committee Chair John Mica (R-FL) said this morning that getting permission from Republican leadership to find more revenues to fund the transportation bill was a “major breakthrough” but still won’t say where the money will come from.

Rep. John Mica won't be specific about where additional transportation funding could come from. Photo: 13 News

Mica told an audience at a Washington Post-sponsored forum on transportation that passing yet another extension of the surface transportation reauthorization persuaded leadership that there would not be consensus on a long-term bill until the spending levels were raised. “There wont be a gas tax increase,” Mica said, “but our leadership has asked us to look for other sources of revenue, and we’re on that mission now.”

“Speaker Boehner has really opened the door to us to look for any responsible means” to fund the bill, Mica said, adding that a gas tax increase is still off the table. “There’s also the possibility of doing away with it; adopting something else.” He wouldn’t specify what the replacement fee could be.

Nor would he say what he thinks of a Republican proposal to fund the bill with revenues from new oil drilling except to say, “We’re looking at it. We have some scoring issues. And then we have to make sure we have the votes.”

Mica said he was confident that a long-term bill would pass in March. “Don’t let anybody talk about a two-year transportation bill; that’s criminal,” he said. His counterpart in the Senate, Barbara Boxer, has proposed a two-year bill, but could be willing to go along with a longer-term bill if funding levels were raised.

Mica also reiterated his support for state infrastructure banks, saying he prefers them to a national bank. He said the way Washington works is: “the biggest gorillas get the most bananas.” Instead of having big guys compete for big loans from a big national bank, he said, “the best way to prioritize projects is to have them evolve from local level, get local and state participation, and then assist them.”

Transportation Secretary Ray LaHood also addressed the Washington Post gathering. He said he was confident that, despite current gridlock, there was enough pressure on Congress to create jobs that they’ll pass some form of transportation bill this year.

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Tuesday night, the Senate blocked a vote on the president’s jobs plan. As had been forecast, Republicans voted unanimously against the plan, and they weren’t alone: Two Democrats joined them – Sens. Jon Tester of Montana and Ben Nelson of Nebraska. Now it’s on to Plan B, which involves breaking up the bill into pieces to be voted on separately.

Sen. Schumer's plan to salvage the jobs bill wouldn't resuscitate plans for $50 billion in transportation spending. Photo: AP

New York Sen. Chuck Schumer has proposed narrowing the bill down to two parts – one favored by Democrats, the other by Republicans. Under the plan, an infrastructure bank would be created in the model endorsed by the president and the Kerry-Hutchison BUILD Act. In exchange, there would be a tax holiday for corporations to bring back to the U.S. profits they made overseas.

Obama’s bill had also called for a $50 billion investment in transportation infrastructure, and that appears to be dead as the Senate pursues Schumer’s plan. The House had dismissed the transportation component long ago, with Republican leadership saying they might hold a vote on the pieces of the bill that appeal to them (surprise — stimulus spending isn’t one of them). Meanwhile, some insiders say that Republicans in the House are getting serious about passing a transportation reauthorization before March 31 so that they can show that they, too, are serious about job creation.

Of course, the path they seem to be setting out on involves paying for a higher level of transportation spending with oil drilling, a proposal that’s sure to run up against massive Democratic opposition and possibly even a presidential veto.

And many think that not much is going to happen on any of this until the super committee comes back with its proposals for deficit reduction before Thanksgiving.

Back to the Schumer jobs plan: We’ve written a lot, and will be writing more, about the pros and cons of an infrastructure bank. But what about this idea of repatriating overseas profits?

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Last week, three Washington heavy-hitters brought a new contribution to the debate over a national infrastructure bank: They said we already have one.

Mark Alderman of the Obama-Biden transition team, former U.S. Senator Evan Bayh, and Howard Schweitzer, former vice president of the Export-Import Bank co-wrote an op-ed for the Washington Post saying that the Export-Import Bank was already authorized and organized to do exactly what an infrastructure bank is supposed to do:

Is this what you had in mind, I-bank proponents? It's the Export-Import Bank -- but some experts believe it could serve the same function as a national infrastructure bank. Photo: GSA

Many of those pushing for an infrastructure bank say that public-private partnerships are part of the solution. This basic concept combines private capital with some form of public support to finance large projects. That is the Export-Import Bank’s bread and butter. Put another way, the United States already has a bank that knows how to balance investor return with lender (i.e., taxpayer) protection — often a major stumbling block to public-private deals.

They go on to say, “A newly expanded Export-Import Bank could facilitate private-sector investment in projects such as repairing roads and bridges, modernizing the energy grid, and maintaining our dams and levees — creating jobs while rebuilding the country.”

It’s a compelling argument, especially in the face of skepticism about creating a new quasi-government entity, especially in a political environment suspicious of Big Government. Some fear an I-bank will be too much like Fannie Mae and Freddie Mac; some would rather just stick with the TIFIA loan program; others want to encourage state infrastructure banks instead of a big national one. If making a few tweaks to an existing structure could yield the same benefits as a national infrastructure bank, isn’t that easier?

The Ex-Im bank has a similar financial model to the Kerry-Hutchison I-bank proposal (which the president has adopted) and a similar governing structure – an independent, though government-owned, corporation. Even better, the Ex-Im Bank makes money for the U.S., depositing money into the Treasury, not taking it.

“The Ex-Im bank already has some of that staff in place and an established history of success, fiscal responsibility, and a low risk to taxpayers,” said bank expert Scott Thomasson of the Progressive Policy Institute. “And there actually is a window to expand the mandate of the Ex-Im Bank if there is political support to do that.”

There’s not a lot of interest on Capitol Hill yet about this idea, but it could become the compromise that saves the whole I-bank concept. For now, some say, politicians that have been on the forefront of the bank idea would rather stick with their own idea (which they can then take credit for).

Rep. Rosa Delauro (D-CT) has been the primary Congressional champion of an infrastructure bank for the past 17 years. At an event yesterday sponsored by PPI, Delauro admitted that while the Ex-Im Bank was an interesting model, “Yes, I am wedded to an infrastructure bank.”

Sen. Mark Warner, an original cosponsor of the Kerry-Hutchison BUILD Act, gave a similarly cautious welcome to the Ex-Im Bank proposal. “I’ve not given that enough thought, but I think it’s something that ought to be examined,” he said yesterday. He did say that he and his cohorts have always thought of the Ex-Im Bank as a far closer model for the infrastructure bank than Fannie and Freddie.

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Congressional insiders say that House Majority Leader Eric Cantor is refusing to hold an ”all or nothing” vote on President Obama’s jobs bill. Cantor says he’ll bring “elements” of the bill to the floor but not the whole bill.

Eric Cantor still thinks tax cuts create more jobs than, you know, job creation. Photo: Chip Somodevilla/Getty Images

It’s pretty clear which elements Cantor approves of. He expressed his preferences soon after the president unveiled his $447 billion job-creation proposal, which includes $50 billion for infrastructure investment — something Obama’s been pushing for (though not always pushing very hard) since Labor Day of last year.

“Over half, I think, of the total dollar amount is so-called stimulus spending,” Cantor told reporter Brian Beutler soon after Obama announced his jobs plan. “We’ve been there, done that. The country cannot afford more spending like the stimulus bill.”

The Washington Monthly’s Steve Benen responded:

A little more than half of the American Jobs Act is made up of tax cuts. Cantor, at least today, didn’t reflexively rule out these provisions.

Instead, what Cantor disapproves of are the parts of the proposal most likely to create jobs — infrastructure investments, job training, unemployment aid, and assistance to states to prevent public-sector layoffs. It’s as if the oft-confused Majority Leader looked at the plan, found the measures that would have the great[est] impact to improve the economy, and immediately rejected them.

A Republican version of the jobs bill would almost certainly eliminate the infrastructure bank, which Obama proposed as part of the jobs bill. House Transportation Committee Chair John Mica immediately repudiated this idea, saying, “Unfortunately, a National Infrastructure Bank run by Washington bureaucrats requiring Washington approval and Washington red tape is moving in the wrong direction.” He preferred his own plan of encouraging states to set up their own banks.

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In a Rose Garden speech this morning, President Obama soundly rejected Republicans’ push to address the deficit exclusively through spending cuts with no tax increases. He was responding to House Speaker John Boehner, who said last week that tax increases were “off the table.” The outcome of the current deficit-cutting fight could have significant implications for transportation-related proposals like the national infrastructure bank, which Obama included in his recently-unveiled American Jobs Act.

President Obama said he won't accept spending cuts without tax increases. Photo: Chip Somodevilla/Getty Images

In a speech last Thursday, Boehner ruled out any form of tax increase as the deficit reduction “super committee” decides how to meet its mandate. “When it comes to producing savings to reach its $1.5 trillion deficit reduction target, the Joint Select Committee has only one option,” he said, “spending cuts and entitlement reform.”

President Obama went to the mat this morning for a different approach to cutting the deficit. He presented his own plan, which includes some spending cuts and policy changes to Medicare and Medicaid, in addition to other programs. But the centerpiece is the elimination of corporate tax loopholes and of tax cuts for the wealthy.

“I will veto any bill that changes benefits for those who rely on Medicare but does not raise serious revenues by asking the wealthiest Americans or biggest corporations to pay their fair share,” Obama said. “We are not going to have a one-sided deal that hurts the folks that are most vulnerable.”

There are many plans on the table right now, both to increase spending and to cut it. The president released his deficit reduction plan, in part, to explain how to pay for his job creation bill, which includes $50 billion for transportation infrastructure and $10 to capitalize a national infrastructure bank.

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More information when we get it.