March 27, 2015

From Government & Policy

Carl Winfield

Infrastructure Funding Amendment Fails in US Senate

An amendment to include USD 478bn in new infrastructure spending over the next six years was defeated in the US Senate on 24 March.

The amendment, proposed by Sen. Bernie Sanders (D-Vt.), was to have been included in a proposed FY16 budget. The legislation was defeated by 52 to 45. The vote was largely split down party lines.

Sanders said that many republicans and democrats agree that the US’ infrastructure must be improved, in a speech before the Senate Budget Committee. He noted that the parties disagree on the means by which to do it.

“Some of my colleagues on the republican side will say ‘We’re looking at tax reform,’ and maybe it will happen but maybe it won’t happen,” Sanders said. “Their idea of dealing with the deficit is to cut, cut, cut.”

Sen. Dean Heller (R-Nevada), the amendment’s co-sponsor, did not respond to requests for comments.

Ad hoc tax reform

Some observers have maintained that republican senators may have balked at Sanders’ attempt to impose tax reform on the body.

“The amendment was proposed by Senator Bernie Sanders, and called for USD 478bn in new spending over six years, without increasing the deficit,” Marcus Lemon, a partner at Polsinelli, told InfraAmericas. “However, it would be through a large tax increase on businesses by altering corporate tax law in an ad hoc manner.”

Lemon noted that it is likely the GOP would have preferred to deal with tax reform as a comprehensive, long-term package, rather than have a piece of tax reform imposed unilaterally. He added that some Senate republicans are considering potential deficit-neutral solutions which do not involve raising taxes, including or allowing states to take on more oversight and fiscal responsibility for the national highway system; further relaxing the restrictions on tolling; facilitating private investment in infrastructure by increasing the size and scope of programs like TIFIA and PABs; and the possibility of reallocating existing fiscal spending from a non-priority area over to transportation.

Lemon further noted that, while the amendment has not passed, it is plausible that Congress will pass a continuing resolution or temporary fix which could extend until October 2015 or until 2017.

“It’s not uncommon to see multiple extensions,” he said.