Selling Republican Shares Urged by Trucking Group

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Protesters cheer as a group of truckers and their supporters drive past during a demonstration at the World War II Memorial in Washington, DC on October 13, 2013 demanding an end to the federal government shutdown. Close

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Photographer: Jewel Samad/AFP via Getty Images

Protesters cheer as a group of truckers and their supporters drive past during a demonstration at the World War II Memorial in Washington, DC on October 13, 2013 demanding an end to the federal government shutdown.

The largest U.S. trucking association is vowing to reconsider its support for Republicans after last week’s debt-limit standoff in Washington, escalating a feud between industry groups and the small-government Tea Party movement.

“If I was your political broker, my advice would be that you sell your Republican shares and buy the Democrats,” Bill Graves, the chief executive officer of the American Trucking Associations, said at the group’s annual convention in Orlando, Florida.

Business, he said, must weigh its relationship with Republicans who threaten to “burn the house down” and who take positions that are “foolish, ill-advised, reckless and detrimental” to the U.S. economy.

His remarks underscore growing frustration over the difficulty in passing what once were bipartisan bills on such government basics as maintaining the interstate highway system. They echo similar impatience expressed by the U.S. Chamber of Commerce, National Retail Federation, and other business leaders after House Republicans on Oct. 16 yielded in a showdown with President Barack Obama over funding the new health-care law that produced a 16-day partial government shutdown.

The rift between the business community and the Republican Party could carry political consequences as some industry leaders consider challenging candidates in primaries and others look to shift donations.

Photographer: Andrew Harrer/Bloomberg

American Trucking Associations Chief Executive Officer Bill Graves said, “If I was your political broker, my advice would be that you sell your Republican shares and buy the Democrats.” Close

American Trucking Associations Chief Executive Officer Bill Graves said, “If I was your... Read More

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Photographer: Andrew Harrer/Bloomberg

American Trucking Associations Chief Executive Officer Bill Graves said, “If I was your political broker, my advice would be that you sell your Republican shares and buy the Democrats.”

Political Donations

The Arlington, Virginia-based American Trucking Associations’ political action committee contributed $724,500 to federal candidates in the 2012 elections, with 78 percent of that going to Republicans, according to the nonpartisan Center for Responsive Politics.

“All of this is about consuming resources in a family fight as opposed to taking the fight to the other guy,” said Dirk Van Dongen, president of the Washington-based National Association of Wholesaler-Distributors, in a reference to the intraparty battle. Van Dongen also is a Republican donor.

While many of the business leaders share the Tea Party’s dislike for the Affordable Care Act, the tactics employed by lawmakers, including bringing the nation to the brink of a default on its debts, exposed a divide in priorities that’s playing out on other issues important to commerce.

A revision of immigration laws to allow for more skilled-worker visas is languishing, while a reauthorization of the Export-Import bank, which provides loans and loan guarantees to foreign firms to buy U.S.-made products, last year was passed at the last minute. Both were caught in the ideological tugs-of-war in Congress over the size and reach of the federal government.

Highway Bill

For Graves, the fight is over increasing a federal gas tax to finance projects in a highway bill.

“Our No. 1 issue is getting a package of infrastructure investment,” he said in an interview. “We know we can’t rely on the general fund to keep saving the Highway Trust Fund. We know how expensive tolls are. We know the answer is a fuels tax. That’s a fairly straightforward conversation to have with a member.”

Yet in 2012, the highway bill became so mired in the Republican-controlled House because of its price tag and the tax issue that the chamber couldn’t pass it through the normally united Transportation and Infrastructure Committee. A two-year compromise was hammered out, without a tax increase and four years shorter than the typical highway measure.

Ray LaHood, who served as U.S. Transportation secretary from January 2009 until June of this year, said the two-year law offers “no certainty at all for anybody to do long-term planning.”

‘Chintzy Bill’

“It was a chintzy bill that does not provide the revenue to do what needs to be done to get America back to being No. 1, and to provide long-term certainty to people who build roads and bridges and other infrastructure,” said LaHood, a former Illinois Republican representative.

When the debate is rejoined next year, he said, there probably will be 30 or 40 Republicans in the House who will block a longer-term measure, forcing a one-year extension.

“The business community is fed up with the inaction of Congress when it comes to infrastructure,” he said. “The business community knows that America has fallen way, way behind. There’s a long, long list of bridges that need to be replaced or repaired. There’s a long, long list of roads that need to be fixed up.”

Traffic Upswing

Road transportation accounts for 16 percent of gross domestic product and 60 percent of all U.S. spending on transportation, according to a 2012 analysis by the American Road & Transportation Builders Association. In 2007, trucks handled more than 39 percent of all U.S. freight-ton miles, up from 35.7 percent in 1993.

“A very significant portion of the cost of U.S. goods is directly related to the cost of highway transport,” the report concluded. “To improve U.S. competitiveness, a high-quality national highway and bridge network is essential.”

According to the U.S. Department of Transportation, highways in poor condition cost users as much as 25 percent to 30 percent more per mile. Every 1 percent increase in highway-user costs adds about $15 billion to the nation’s total highway bill, including increased vehicle depreciation and maintenance, fuel, oil, and tire consumption, the ARTBA study noted.

Bruce Josten, the Chamber of Commerce’s executive vice president, said yesterday that his group, the largest business lobby in the nation, has worked unsuccessfully for years with the AFL-CIO, the country’s biggest labor union association, to reach consensus on a higher gas tax. The problem is “far, far bigger” than the Tea Party, he said.

Belly Up

“Everybody in town -- the administration, the Republican Party and the Democratic Party -- refuses to belly up to the reality that you need to fund infrastructure. We and the unions and others have been calling for more than a decade to raise the user fee,” said Josten, at a breakfast sponsored by the Christian Science Monitor.

The last time Congress successfully moved a highway measure was in June 2012. The two-year law was dubbed the Moving Ahead for Progress in the 21st Century Act, or MAP-21.

After failing to get a version of the legislation out of committee and onto the House floor, Speaker John Boehner, an Ohio Republican, appointed conferees to negotiate a final measure with the Senate.

Roadblocks also had to be overcome in the Senate. The bill’s advocates fought off amendments that would have ended the federal highway program and sent all gas-tax receipts to the states.

Gas Tax

The 18.4-cent-per-gallon gas tax that finances the Highway Trust Fund was last raised as part of a budget deal signed by President Bill Clinton in 1993. It would take another 10 cents per gallon to bring the trust fund back to solvency, according to the American Association of State Highway and Transportation Officials.

Because of shortfalls and the failure of Congress to boost the gas tax, the government last year transferred $18.8 billion of general taxpayer money to meet the identified highway, bridge and transit construction needs.

Business groups in general are “really frustrated and disappointed” by their allies in the Republican Party, Patrick Griffin, an adjunct professor of government at American University, said in a phone interview. Griffin was also an assistant to the president for legislative affairs during the Clinton administration. “They have a lot of irons in the fire” and they have to engage Republicans and Democrats, he said.

David French, senior vice president for government relations at the National Retail Federation, said “all parties go through shaking-out periods” where different points of view compete.

“If at the end of this process we could have in the Republican Party the grassroots energy of the Tea Party with the long-range focus of the business community working together instead of at odds, I think it’d be a stronger party,” French said.

To contact the reporters on this story: Laura Litvan in Washington at llitvan@bloomberg.net; Jeff Plungis in Washington at jplungis@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net

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