Federal Issues | Transportation & Infrastructure

Transportation and Infrastructure

Congress passes transportation funding reauthorization


The U.S. House voted 372-52 June 29, 2012 to pass a longer-term reauthorization of funding for transportation and infrastructure programs. This was followed by a Senate vote of 74-19 for passage. The transportation and infrastructure funding bill reauthorizes, through the end of fiscal year 2014, the surface transportation programs administered by the Federal-Aid Highway Administration, the Federal Transit Administration, the National Highway Traffic Safety Administration, the Federal Motor Carrier Safety Administration and certain programs administered by the Pipelines and Hazardous Materials Administration.

Other major provisions in the legislation include:

  • Streamlining the environmental review process which speeds the permitting of transportation projects.
  • Requiring “transportation enhancements” such as bike paths and pedestrian safety measures to compete for funding with other transportation programs;
  • Reauthorization of the National Flood Insurance Program (NFIP) through 2017 and increase premiums for some subsidized policies.
  • Reducing mandatory payments to states that have completed certain reclamation projects on land formerly used for mining.
  • Retaining an interest rate of 3.4 percent on all new subsidized student loans until June 30, 2013, and change the interest the federal government pays on behalf of some borrowers who are attending school.
  • Raising additional revenue by increasing the ability of businesses with excess assets in their pension funds to use them for retiree health and life insurance benefits, and by defining businesses that make roll-your-own machines available for consumer use as tobacco manufacturers.

During negotiations, provisions authorizing the Keystone XL oil sands pipeline and loosening regulations on coal ash were dropped.

Congress has approved nine extensions since the last comprehensive transportation plan ended in Sept. 2009, creating uncertainty in the transportation construction industry. “The two-year extension of federal transportation programs is going to provide some certainty for transportation projects across the country and hopefully a much needed boost in construction employment,” says John McClelland, ARA vice president of government affairs. “The increased activity in highway, transit and related construction projects also is likely to provide an increase in opportunities for equipment rental companies to rent more equipment and by extension purchase more equipment and hire more workers. The bipartisan agreement that passed Congress today is a welcome sign which ARA fully supports.”

 ISSUE BRIEF: Transportation & Infrastructure Spending

The most recent multiyear law that authorizes spending on surface transportation programs has expired and these programs are operating under a temporary extension that expires on March 31, 2012. Our nation enjoys one of the world's most efficient transportation systems which provides for the movement of goods and services to market. However, that system is rapidly deteriorating. Already our economy loses billions of dollars every year on wasted fuel, time, and accidents that are caused by poor road, highway and bridge conditions. A long term investment in our transportation infrastructure will pay dividends for decades to come; speeding travel, putting people to work, building our economy and saving lives. The most immediate issue facing reauthorization of a multiyear surface transportation bill is funding.

The United States has been under-investing in its infrastructure for too long. From 2002 to 2008, the economy grew at an average annual rate of 2.4%, while investment in infrastructure fell 1.6 % per year. A multiyear reauthorization of funding for these programs would direct badly needed resources into rebuilding and upgrading our nation's aging infrastructure. It would also create the market certainty needed for state departments of transportation to plan and execute their infrastructure strategies and for companies to rehire laid-off workers, purchase and rent new equipment, while renewing the efficiency of our transportation infrastructure. With equipment rental industry revenues down 25 percent since 2008 and just beginning to recover and construction sector unemployment stubbornly high at 17.1 percent, the multiyear reauthorization of highway and infrastructure programs would be welcome news to this hard-hit sector of the U. S. economy.
Congress has failed to reach an agreement on the reauthorization of the surface transportation programs. The uncertainty and delay only further shrink markets and cost jobs. A fully funded highway bill will put people back to work in good paying jobs, including jobs in construction equipment rental businesses. In fact, 6.4 cents of every dollar invested in highways is used to buy, rent and service equipment. Each dollar spent on equipment generates $3.19 in economic impact as equipment companies and their employees buy goods and services.

The nation’s rental businesses will benefit from additional transportation spending but they will also use the additional revenue they receive to purchase new equipment that will be needed to bring these projects to completion. Thus rental businesses are an integral link in the chain of economic activity that fuels growth and creates jobs.

Action Requested:
ARA supports swift passage of a fully funded, multiyear reauthorization of federal transportation and infrastructure programs.


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