On April 6, members of the Coalition for America’s Gateways and Trade Corridors (CAGTC) met virtually for the association’s 2021 Annual Meeting to hear from federal policymakers and industry insiders. The topics du jour, of course, were the imminent surface transportation reauthorization and the Biden-Harris Administration’s American Jobs Plan.

Paul Hubler, CAGTC Board Chairman and Director of Government & Community Relations for the San Gabriel Valley Council of Governments and Alameda Corridor-East Project, kicked off the meeting by remarking upon the goods movement industry’s critical importance during the COVID-19 pandemic. Despite major supply chain disruptions, the freight sector rose to the occasion to meet consumer demands and deliver essential goods. He emphasized that this year’s surface transportation reauthorization and economic recovery legislation offer unprecedented opportunities for investment in multimodal freight infrastructure. As these ambitious proposals advance, CAGTC looks forward to continuing its work with Congress and the Biden-Harris Administration by advocating for robust federal investment in our national freight infrastructure system.

Christopher Coes, Acting Assistant Secretary for Transportation Policy for the U.S. Department of Transportation, spoke to members about the Biden-Harris Administration’s recently unveiled American Jobs Plan. He said that “investing in infrastructure, particularly freight infrastructure, is critical for America to have sustainable economic growth,” stressing that the Administration’s proposal seeks to both rebuild the nation’s infrastructure and create millions of good-paying jobs.  Coes also noted that securing the domestic supply chain, protecting vulnerable populations, mitigating the effects of climate change, and ensuring equal access to discretionary grant programs are top priorities for Secretary of Transportation Pete Buttigieg. He added that USDOT hopes to collaborate with other federal agencies to accomplish the Administration’s infrastructure policy priorities. Finally, Coes told CAGTC members that as USDOT works with lawmakers to develop legislative language, the Department welcomes input from freight stakeholders.

Next, Senate staff provided an “off the record” perspective on key themes and objectives for inclusion in a forthcoming surface transportation reauthorization proposal. Following remarks, CAGTC members raised questions on a variety of topics, including discretionary grant programs and prospects for Highway Trust Fund solvency.

Closing out the meeting, Jeff Davis, Senior Fellow with the Eno Center for Transportation and Editor of Eno Transportation Weekly, provided the group with a detailed analysis of the American Jobs Plan. He discussed the complex relationship among the infrastructure proposals Congress is likely to consider this year – which include the American Jobs Plan, FAST Act reauthorization, and fiscal year 2022 appropriations. Davis also spoke about several issues not addressed in the White House’s outline, such as questions related to state and local matching shares, megaprojects, earmarks, and the timeline for spending.

During the meeting, CAGTC also conducted its annual Board elections, electing two new industry leaders and re-electing four. Fran Inman, Senior Vice President of Majestic Realty Co., and Ray Traynor, Chief Planning & Innovation Officer of the San Diego Association of Governments, both longtime CAGTC members, were elected to serve their first term on the Board. Those reelected to serve another term are: Erin Aleman, Executive Director of the Chicago Metropolitan Agency for Planning; Paul Anderson, President & CEO of Port Tampa Bay; Shant Boyajian, Partner at Nossaman LLP; and Rachel Vandenberg, Senior Vice President of Dewberry. Read CAGTC’s press release here.

Consistent with his campaign promise to develop a plan to “Build Back Better,” President Joe Biden in late March announced the American Jobs Plan and Made in America Tax Plan, proposing a $2.3 trillion investment to support job creation and a wide range of infrastructure improvements. In addition to existing federal funding and programs, the Biden-Harris Administration urges Congress to provide $571 billion for transportation infrastructure, including: $115 billion to improve roads and bridges; $80 billion to support passenger and freight rail; $17 billion for inland waterways, coastal ports, land ports of entry, and ferries; $20 billion for highway safety improvements; and $44 billion to accelerate “transformative projects” through research and competitive grant programs. The American Jobs Plan also addresses the Biden-Harris Administration’s climate and equity priorities, directing funds to vehicle electrification and initiatives to assist vulnerable communities.

The Biden-Harris Administration’s proposal outlines proposed investments made over the next five to eight years, offset by tax reforms intended to pay for these investments within the next 15 years. The Made in America Tax Plan proposes to increase the corporate tax rate from 21 percent to 28 percent along with several other provisions to disincentivize the offshoring of jobs overseas and ensure large corporations “are paying their fair share.”

The Administration is working with Members of Congress to craft legislation based on the American Jobs Plan. Though the President has stressed that he hopes to pass an infrastructure bill with bipartisan support, lawmakers on both sides of the aisle have voiced opposition to aspects of the American Jobs Plan. Republicans in Congress have taken issue with the plan’s overall price tag, climate provisions, and corporate tax increases. Several GOP lawmakers have also objected to the proposed investments in areas that have traditionally not been considered infrastructure, such as caregiving services and schools. Senate Minority Leader McConnell (R-KY) said of the American Jobs Plan, “It’s called infrastructure, but inside the Trojan horse is going to be more borrowed money and massive tax increases on all the productive parts of our economy.” Progressive Democrats argue that the plan does not go far enough to combat climate change, while moderates from states with high tax rates, such as New York, New Jersey, and Connecticut,  oppose any changes to the tax code without a repeal of the state and local tax (SALT) cap. Democrats also have disparate views on the corporate tax rate, with Sen. Sanders (I-VT) advocating for a 35 percent rate and Sen. Manchin (D-WV) indicating that he supports a more modest increase to 25 percent.

Given Republicans’ staunch opposition to the size and scope of the American Jobs Plan, it appears unlikely, in its currently proposed form, to garner the ten GOP votes required to break a filibuster. Democrats may seek to sidestep the filibuster and pass the bill through budget reconciliation, which requires only a simple 51-vote majority. The Senate Parliamentarian recently determined that the Senate budget rules allow Congress to use the reconciliation process multiple times during one fiscal year. Nonetheless, there are limitations on the provisions that can be included in reconciliation bills. Transfers from the General Fund of the Treasury to the Highway Trust Fund and earmarks, for example, would likely violate Senate rules. Multiple Senate Democrats, including Senate Majority Leader Schumer (D-NY) and Sen. Coons (D-DE), have predicted that Democrats will rely on reconciliation to pass elements of the Administration’s proposal. However, achieving unanimous support for tax legislation from Senate Democrats, particularly moderates, could prove challenging.

Senate Republicans, led by Environment and Public Works Ranking Member Capito (R-WV), released a $568 billion counterproposal to the American Jobs Plan on April 22. The smaller, more targeted package is focused primarily on what is considered “traditional” transportation infrastructure, allocating $299 billion for roads and bridges, $62 billion for transit, $20 billion for rail, $44 billion for airports, $7 billion for water ports, and $13 billion for transportation safety agencies. The Republican framework also includes funding for broadband, drinking water and wastewater infrastructure, and water storage. In contrast to the Biden-Harris Administration’s package, the Republican proposal includes current baseline funding levels in its recommended surface transportation investments. The proposed funding sources also differ, with Senate Republicans calling for improving the solvency of the Highway Trust Fund, rather than corporate tax increases. The proposal calls for user fees that account for electric vehicle drivers to ensure all road users contribute to HTF revenue, though further details have not yet been announced. Republicans also suggest unused funds from COVID relief legislation be repurposed for infrastructure investments. Ranking Member Capito emphasized that Republicans are willing to compromise, stating, “I think we see this as an offer that is on the table and deserves a response.”

On April 23, the House Problem Solvers Caucus (PSC) released a framework to improve the nation’s infrastructure. Established in 2017, the PSC  is a group of 58 lawmakers – equally divided between Republicans and Democrats – that promotes bipartisan cooperation on key policy issues. The group is led by Co-Chairs Rep. Gottheimer (D-NJ) and Rep. Fitzpatrick (R-PA). The document was developed by the PSC’s Infrastructure Working Group, co-chaired by Rep. Lamb (D-PA) and Rep. Katko (R-NY), with input from industry and governmental stakeholders. According to the framework, the PSC created its Infrastructure Working Group to foster dialogue on the backlog of deferred maintenance in the United States and the need for significant infrastructure investment.

The report, titled “Rebuilding America’s Infrastructure,” offers policy solutions to rebuild and invest in American highways, roads and bridges, transit and railways, ports and airports, water and sewer systems, energy systems and the power grid, and broadband and communications networks. The framework highlights areas of bipartisan agreement on transportation and infrastructure issues. Consensus priorities include providing stable, long-term funding for infrastructure, encouraging Public Private Partnerships, ensuring that rural communities have opportunities to compete successfully for funding, and expediting project completion without compromising on environmental and safety protections.

In the report, the PSC offers several key recommendations that align with CAGTC’s policy priorities. For example, the report urges Congress to increase funding eligibility for multimodal infrastructure, noting the FAST Act requires that 90 percent of INFRA Grant program and Freight Formula Program funding must be spent on highways, roads, and bridges, and suggests altering these programs to enable the selection of more multimodal projects. The group also points to recommendations made by the Government Accountability Office (GAO) to ensure that competitive federal grant programs are administered in line with Congressional intent and that funding is awarded transparently. Additionally, the report calls on Congress to invest in highway, transit, and freight projects of regional and national significance that cannot otherwise be funded through existing discretionary programs.

Other proposed financing reforms include raising the private activity bond state volume cap for all infrastructure categories, increasing Transportation Infrastructure Finance and Innovation Act (TIFIA) program funding, incentivizing use of the Railroad Rehabilitation and Improvement Financing (RRIF) program, and appropriating the authorized funds for the Regional Infrastructure Accelerator (RIF) Demonstration Program.

Finally, the report recommends imposing alternative user fees in order to stabilize Highway Trust Fund (HTF) solvency and ensure that the costs of maintaining and constructing transportation infrastructure are distributed equitably among the system’s users. To address declining HTF revenue, the Caucus proposes a handful of revenue mechanisms, such as implementing electric and hybrid vehicle fees (and funding additional pilot project testing for mileage-based user fees). It also encourages Congress to consider a user fee based on the value of truck freight assessed through waybill taxes.

Read the full report here.

On April 13, the U.S. Department of Transportation (DOT) published a Notice of Funding Opportunity (NOFO) to apply for $1 billion in Fiscal Year (FY) 2021 discretionary grant funding through the Rebuilding American Infrastructure with Sustainability and Equity (RAISE) grants. RAISE, formerly known as BUILD and TIGER, has awarded over $8.935 billion in grants to projects in all 50 states, the District of Columbia and Puerto Rico since 2009.

“In communities across the country, there is tremendous need for transportation projects that create high-quality jobs, improve safety, protect our environment, and generate equitable economic opportunity for all Americans,” said U.S. Secretary of Transportation Pete Buttigieg. “With RAISE grants, we are making those needed investments in our communities' future.”

Projects for RAISE funding will be evaluated based on merit criteria that include safety, environmental sustainability, quality of life, economic competitiveness, state of good repair, innovation, and partnership. Within these criteria, the Department will prioritize projects that can demonstrate improvements to racial equity, reduce impacts of climate change and create good-paying jobs.

Read the full release here.