President Barack Obama will announce in St. Paul, Minnesota, on Wednesday a $302 billion plan to create jobs by fixing the nation’s crumbling roads and bridges, but the proposal, which relies on tax reform for funding, is expected to fall flat in Congress.
Congress faces a Sept. 30 deadline to renew federal funding for transportation programs, a deadline that has made state governors concerned about planning projects that typically run through September and into the fall months.
Obama’s four-year plan relies on revenues raised by ending some tax breaks to free up $150 billion for transportation. That would only happen through corporate tax reform, a political long shot ahead of November midterm elections.
Democratic Senator Barbara Boxer, head of the committee that oversees work on the highway bill, said on Wednesday that Obama’s plan was not likely to pass Congress.
“I think it’s good, but I don’t hold out hope for it,” Boxer told a conference of state transportation officials in Washington.
Boxer said the biggest hurdle for getting a highway bill through Congress would be getting an agreement on funding. “It’s the pay-for that is the sticky wicket,” she said.
The top tax-writing committee in the Republican-led House of Representatives is slated to unveil draft legislation to reform taxes on Wednesday, but any proposed changes to the tax code are widely expected to be shelved.
Senate Republican Leader Mitch McConnell told reporters on Tuesday “I have no hope for that happening this year,” blaming the gridlock on Democrats seeking tax increases.
The White House said Obama is open to alternatives.
“While the president will show how to fully pay for his proposal in this way, he will also make clear that he is open to ideas and wants to work with Congress in a bipartisan way to get this done,” the White House said in a statement.
Obama is set to give a speech on the issue at 3:05 p.m. EST (2005 GMT) after touring an operations and maintenance center for Metro Transit, the system of buses, light rail and commuter trains serving the Minneapolis-St. Paul “Twin Cities” region.
Obama has long called for using savings from tax reform to replenish the Highway Trust Fund, which relies on an 18.4-cents-a-gallon tax on gasoline to pay for the federal share of spending on roads.
The gas tax, which raises about $35 billion a year, has not been raised in two decades, and the trust fund has fallen short of needs. Transportation Secretary Anthony Foxx said the fund could run out of money as soon as August.
The U.S. Chamber of Commerce and the AFL-CIO labor federation have proposed increasing the fuel tax, but Republicans in Congress are averse to tax hikes.
In St. Paul, Obama also will launch a competition for $600 million in grants for transportation projects through a program that leverages funds from the private sector and state and local governments. The spending has already been approved by Congress.
It is the sixth round of grants for the program, called Transportation Investment Generating Economic Recovery (TIGER), which so far has given $3.5 billion to 270 projects.
The White House said this round of grants will give priority to “projects that make it easier for Americans to get to jobs, school, and other opportunities, promote neighborhood revitalization and business expansion, and reconnect neighborhoods that are unnaturally divided by physical barriers such as highways and railroads.”