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DeFazio Sends Letter to Trump, Offers Three Solutions to Invest in American Infrastructure

Feb 7, 2017
Letters

February 7, 2017

 

The Honorable Donald J. Trump

The President

The White House

Washington, DC  20500

 

Dear Mr. President:

 

As you consider legislative proposals for your first 100 days, I offer three simple solutions that could be a critical part of your commitment to invest $1 trillion in infrastructure, without increasing the size of the budget deficit. These Investing in America initiatives will better enable U.S. businesses to export goods, level the playing field with our foreign competitors, and create and sustain family-wage jobs in the United States.

First, the A Penny for Progress proposal provides more than $500 billion in infrastructure investment to improve the conditions of our Nation’s highways, bridges, and public transit systems, address the Federal underinvestment which has caused the current state-of-good-repair backlog, and address future highway and transit needs through fiscal year (FY) 2030. According to the U.S. Department of Transportation,[1] the Nation faces a $926 billion backlog of unmet capital investment needs for highways, bridges, and transit systems over the next 20 years. The A Penny for Progress proposal provides the necessary funding to address the shortfall in the Highway Trust Fund and make substantial improvements to our surface transportation system through FY 2030. This additional Federal funding ($20.3 billion per year) represents an approximately 35 percent increase over current surface transportation funding levels.

To finance the additional investment, the A Penny for Progress proposal authorizes the U.S. Department of Treasury to issue 30-year Invest in America Bonds annually, through 2030. Each bond will be repaid at the end of its 30-year term, using revenues from indexing the gasoline and diesel user fees beginning in 2017. Indexation will likely increase the gas and diesel user fees by approximately 1 cent per year, and the increase will be capped at no more than 1.5 cents annually.

Second, the Unlocking the Harbor Maintenance Trust Fund proposal provides more than $27 billion for our Nation’s coastal and inland harbors over the next decade without raising one more dime in taxes. The U.S. Army Corps of Engineers (Corps) estimates that full channels at the Nation’s 59 busiest ports are available less than 35 percent of the time. With the opening of the expanded Panama Canal in June 2016, larger container ships will increasingly call on East and Gulf Coast ports, and the dredging needs of our ports will continue to grow.

At the same time, the Harbor Maintenance Trust Fund collects far more revenues from shippers than Congress has appropriated to the Corps to maintain our harbors.[2] Currently, approximately $9 billion in already collected tax revenues sits idle in the Harbor Maintenance Trust Fund in the U.S. Treasury. As a result, shippers continue to honor their commitment to pay for promised maintenance activities that the Federal Government then fails to carry out.

The Unlocking the Harbor Maintenance Trust Fund proposal provides the necessary funding to dredge all Federal commercial harbors to their fully authorized widths and depths, and maintain these harbors for the next decade. To finance the identified backlog in critical harbor projects, the proposal uses the funds collected through the existing Harbor Maintenance Tax for their intended purposes, instead of using the funds to hide the size of the budget deficit. 

Finally, I urge you to increase or remove the passenger facility charge (PFC) cap for airport development. The PFC, which is statutorily authorized but locally collected, generates revenue for safety-critical and expansion projects that will restore aging airports to their former glory—not to mention help them keep up with increasing demand—without increasing Americans’ tax burden. The Federal Aviation Administration (FAA) has identified a need for $32.5 billion in Federal airport improvement projects over the next five years. That’s $6.5 billion per year—essentially double current funding for airport grants.

Despite a chorus of airports telling us of the billions of dollars in unmet capital needs each year, Congress has increased the cap on the PFC just once—in 2000—since Congress created the PFC in 1990. If Congress were to raise the current cap on PFCs, it would create new revenue to invest in large airports and free up additional Federal funding to help smaller airports. For example, if we increased the PFC cap by $4.00 (from the current limit of $4.50 to $8.50), airports’ PFC revenue would almost double, from $3 billion per year currently to about $5.7 billion per year. That additional revenue would go a long way toward addressing the $32.5 billion in airport needs identified by FAA, and help airports keep pace with increasing demand. Early in your campaign you cited our Nation’s airports, which are bursting at the seams, as a prime example of the need for meaningful investment in infrastructure. Increasing or uncapping the PFC would help make good on that commitment.

In recognition of our common desire to increase Federal investment in our Nation’s infrastructure, I urge you to consider these three simple solutions. I am developing legislation to implement each of these proposals and look forward to working with you and members of your administration to develop an Investing in America initiative that will prepare our Nation’s infrastructure for the demands of the 21st century.

 

Thank you for your consideration.

 

Sincerely,

 

 

 

PETER DeFAZIO

Ranking Member

                                                    

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[1] The U.S. Department of Transportation 2015 Conditions and Performance Report. Available at: http://www.fhwa.dot.gov/policy/2015cpr/

[2] In 1986, Congress enacted the Harbor Maintenance Tax to recover the operation and maintenance dredging costs for commercial ports from maritime shippers. The Harbor Maintenance Tax is directly levied on importers and domestic shippers using coastal or inland ports as a 0.125 percent ad valorem tax on the value of imported cargo (e.g., $1.25 per $1,000 value). These tax revenues are deposited into a Harbor Maintenance Trust Fund within the U.S. Treasury from which Congress appropriates funds to the Corps for harbor dredging The Harbor Maintenance Tax initially applied to both imported and exported goods; however, the U.S. Supreme Court unanimously held that imposition of the tax on exported goods was a violation of the Export Clause of the U.S. Constitution. United States v. United States Shoe Corp., 523 U.S. 360 (1998).