WASHINGTON (Feb. 28, 2014) — President Barack Obama and House Ways and Means Committee Chairman Dave Camp, R-Mich, have laid out proposals to shore up the federal Highway Trust Fund, the source of funding for the nation's transportation infrastructure that is in danger of running dry this summer.
Mr. Obama presented his vision, an elaborate, $302 billion four-year plan, during a Feb. 26 speech at the Union Depot train station in St. Paul, Minn., while Mr. Camp released a released a tax-reform plan the same day that included a $126.5 billion provision to fund highway and infrastructure investment.
Mr. Obama's plan is designed to provide a quick fix for the Highway Trust Fund, which is expected to run out of money this summer during the peak season to build and repair U.S. roads and bridges, and also succeed the previous two-year transportation bill that expires Nov. 1.
A key part of Mr. Obama's transportation funding plan is a one-time, $150 billion payment from pro-growth business tax reform to be dedicated specifically to fund surface transportation programs and infrastructure investment.
"This amount is sufficient to not only fill the current funding gap in the Highway Trust Fund, but increase surface transportation investment over current projected levels by nearly $90 billion over the next four years," the White House said in a press release.
Mr. Obama is committed to working with Congress on a bipartisan basis to achieve passage of a four-year transportation reauthorization bill this year, the White House added.
Mr. Camp's transportation funding recommendations are part of a larger tax reform plan he said would create up to 1.8 million private sector jobs and increase the Gross Domestic Product by up to $3.4 trillion.
The Camp plan would dedicate $126.5 billion to fully fund the Highway Trust Fund and the projects it supports for the next eight years, according to a House Ways and Means press release.
The plan would also create a new individual and corporate tax rate structure, allow larger standard deductions and child tax credits, allow simpler taxation of investment income and repeal the Alternative Minimum Tax, Ways and Means said.
Under the Camp plan, roughly 95 percent of tax filers would get the lowest possible tax rate by simply claiming the standard deduction, without itemizing, the committee said.
Both the Obama and Camp proposals contain promising aspects, but it's too soon to say whether either has a chance of being enacted, or what they would do in practice, according to Roy Littlefield, executive vice president of the Tire Industry Association.
"I like the fact that the president asked for a four-year bill, and I like it that he doesn't seem to be asking for tax hikes for gas or tread rubber," Mr. Littlefield said. "But once again he's telling Congress, 'This is what I want — you work it out.' That's how Obamacare got screwed up."
As for the Camp plan, it too contains some promising features, Mr. Littlefield said. But it would also mean the end of LIFO — the "Last In, First Out" accounting method for tax and expensing purposes — and that would be a big problem for small business owners, he said.
"We now have Camp, Obama and (Senate Finance Committee Chairman Max) Baucus all saying they want to repeal LIFO," he said.
The American Trucking Associations (ATA) said it appreciated that both the Obama administration and Congress acknowledge the need for fast action on highway funding.
"While a sustainable source of long-term funding would be preferable, given the apparent reluctance to embrace traditional, user-funded revenue streams, ATA is prepared to keep an open mind when looking at financing options for the Highway Trust Fund," said ATA President and CEO Bill Graves.
What education did you have for your first job in the industry?
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8% (13 votes)
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8% (13 votes)
|Total votes: 169|