May 25, 2011 / 9:01 PM / 6 years ago

Obama's transportation plan to shrink in the Senate

4 Min Read

WASHINGTON (Reuters) - President Barack Obama's sweeping spending plan for roads, rail and bridges is shrinking as it travels through Congress.

In the next two weeks, the Senate will begin considering legislation to authorize about $339 billion over six years for transportation, Environment and Public Works Committee Chair Barbara Boxer told reporters on Wednesday.

That is less than two-thirds of the $556 billion package Obama proposed in February.

"We said to them: If you can show us the money, we're happy to look at it," Boxer said about talks with the administration on Obama's proposal. "But right now there isn't any."

The Senate is considering a stand-alone bill to create a national infrastructure bank, which Obama has pushed since his presidential campaign, with an appropriation of $5 billion a year.

Obama's initiative to spend $53 billion on high-speed rail will be taken up in separate legislation, Boxer said.

A single question has loomed over lawmakers since the last $285 billion, five-year authorization expired in 2009: how will the country pay for transportation projects?

But Boxer's committee will not have to answer it as the task to find revenues falls to the Finance Committee.

The gap between sources of funding for transportation infrastructure and the spending levels needed to maintain and improve it is at least $134 billion, a team of experts led by the University of Virginia found last year.

The largest revenue source for highways is the gasoline tax, which has remained at 18.4 cents per gallon for nearly two decades. Obama has said the tax should not be raised during rocky economic times. Meanwhile, growing reliance on public transportation and more fuel-efficient cars has caused collections of the tax to decline.

Tensions around the issue grew when Republicans took control of the House after the November elections on pledges to cut spending. Democrats maintained control of the Senate.

For nearly two years, states have relied on patchwork extension bills to cover their costs, making it difficult for them to plan longer-term projects.

"We are encouraged that the Senate is moving forward toward enactment of a surface transportation bill," John Horsley, executive director of the American Association of State Highway and Transportation Officials, said in a statement, on Wednesday.

Boxer said the bill would take current levels of funding, adjust for inflation, and then put an additional $1 billion per year toward a transportation financing program that gives direct loans, loan guarantees and lines of credit to projects with dedicated revenue streams.

The program, known as TIFIA, would also be expanded to lend to rural projects.

Boxer has been working with Oklahoma Senator James Inhofe, the highest ranking Republican on the public works committee, along with Democrat Max Baucus and Republican David Vitter in an effort to build bipartisan consensus on a plan.

She hopes the bill will be marked up and ready for the entire Senate to debate before the July 4 recess.

The House of Representatives has yet to introduce its corresponding legislation, and frictions could emerge.

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