New House Transportation Head Defends U.S. Highway Role

House Transportation and Infrastructure Committee Chairman Bill Shuster used his first hearing to head off fellow Republicans who support paring the U.S. highway program and sending more money to the states.

The Pennsylvania congressman said the U.S. interstate highway system Republican President Dwight Eisenhower started in the 1950s “allowed massive economic growth for two generations.”

“An efficient national transportation network allows businesses to lower their costs,” said Shuster, who took charge of the transportation panel in the new Congress that began last month. “It allows American businesses to be competitive in a global marketplace.”

Congress is implementing a two-year plan for building highways, bridges and mass transit, and Shuster has said a top priority for his committee is finding enough money to pay for more. He may face opposition from some Republicans who oppose higher taxes, favor a smaller federal government and say states can build highways more quickly and for less money.

Former Pennsylvania Governor Edward Rendell, co-chairman of Building America’s Future, an advocacy group favoring more government funding for transportation, water systems and the electrical grid, said the U.S. spends about 1.7 percent of its gross domestic product on transportation, compared with 9 percent in China and 4 percent in Canada.

U.S. spending in inflation-adjusted dollars is at the same level as 1968, when the economy was far smaller, said Rendell, a Democrat. New York Mayor Michael Bloomberg, founder and owner of Bloomberg News parent Bloomberg LP, is another of the group’s co-chairmen.

Higher Taxes

Across town, the U.S. Chamber of Commerce held its first-ever infrastructure summit, which brought together executives from companies including Cargill Inc., JetBlue Airways Corp. and American Electric Power Co. to advocate for more spending.

U.S. companies realize they need the transportation system to stay globally competitive, and they’re willing to pay for it, said Thomas Donohue, chief executive officer of the Chamber, the world’s largest business federation.

“We are willing to provide the one thing this problem needs the most: money,” Donohue said, citing support among shippers and truckers for higher fuel taxes.

Gasoline Tax

The simplest, most straightforward way to fix the Highway Trust Fund is to raise the 18.4 cents-per-gallon federal gasoline tax, Donohue said. That levy was last raised in 1993, during the administration of Bill Clinton.

A rise in the gasoline tax was the Chamber’s position over the past two years, when the idea failed to win support in the House, the Senate or with President Barack Obama’s administration.

In his State of the Union speech yesterday, Obama renewed a proposal to spend $50 billion for “urgent” infrastructure repairs. Republican lawmakers in November rejected the plan during negotiations on averting year-end tax increases and spending. It was at least the fourth time since that 2010 Obama had proposed an immediate $50 billion for infrastructure, including his budget proposals for the 2012 and 2013 fiscal years.

Before it's here, it's on the Bloomberg Terminal.