Sen. Bernie Sanders (I-Vt.) said that he will introduce legislation to authorize a $1 trillion, multi-year program to rebuild crumbling roads and bridges and invest in other infrastructure modernization projects.
The investment not only would begin to address a growing backlog of badly-needed repairs, it also would put 13 million Americans to work at decent-paying jobs, according to Sanders, who will take over this month as the ranking member of the Senate Budget Committee.
“It’s certainly a conversation starter,” said Baily Wood, vice president of communications for the National Stone, Sand and Gravel Association. “We applaud his efforts, and all options are on table, however, paying for it is where the rubber will meet the road.”
The work needs to be done, Sanders said.
The American Society of Civil Engineers estimates that $3.6 trillion would be needed by 2020 simply to get our nation’s infrastructure to a passable condition. More than $1.7 trillion is needed just to improve our roads, bridges and transit. More than 30 percent of our nation’s bridges have exceeded their 50-year design life. Almost one-third of America’s major roads are in poor or mediocre condition, and 42 percent of major urban highways remain congested.
“America once led the world in building and maintaining a nationwide network of safe and reliable bridges and roads,” said Sanders. “Today, nearly a quarter of the nation’s 600,000 bridges have been designated as structurally deficient or functionally obsolete. Let’s rebuild our crumbling infrastructure. Let’s make our country safer and more efficient. Let’s put millions of Americans back to work,” Sanders said.
And workers need the jobs, Sanders stressed. While the economy has improved since the worst days of the recession, millions of Americans are still out of work and looking for jobs. According to the U.S. Department of Labor, the broadest measure of unemployment stood at 11.4 percent in November. That figure counts workers forced to settle for part-time jobs and others who gave up looking for work.
As a new session of Congress gears up, Sanders said infrastructure investment is one area that could win bipartisan support in Congress. “There are a number of Republicans who understand that it is vitally important that we rebuild our crumbling infrastructure,” he said.
The incoming Republican leader of the Senate Transportation Committee said a gas tax increase is up for consideration to fund infrastructure construction, as “we have to look at all the options. I don’t think we take anything off the table at this point,” Sen. John Thune (R-S.D.) said.
Some of his colleagues, led by Sen. Bob Corker (R-Tenn.) and Sen. Chris Murphy (D-Conn.), have proposed an increase of 12 cents per gallon over the next two years, then linking increases to inflation.
It’s time for Congress to hike the federal gas tax and actually solve a fiscal problem instead of “kicking the can down the road,” Corker said.
One idea we are going to be hearing more about when talk turns to how to replenish the Highway Trust Fund and pay for infrastructure repair is “tax repatriation,” according to Wood. This amounts to a tax break for companies bringing back overseas profits to the U.S.
Rep. John Delaney (D-Md.) has already introduced the Infrastructure and Global Tax Competitiveness Act, which aims to finance the Highway Trust Fund for six years, create an American Infrastructure Fund and make international tax laws more competitive.
According to Delaney’s office, the legislation would create jobs, discourage corporate inversions and spur economic growth. It builds on an earlier bill that Delaney introduced last year, the Partnership to Build America Act, which attracted wide bipartisan support from 39 Republican and 37 Democratic co-sponsors in the House and 15 co-sponsors in the Senate from different parties.
The new legislation would use repatriated tax revenue from multinational companies to increase infrastructure investment by imposing a mandatory deemed repatriation tax on corporate earnings currently held overseas. The money would fund a six-year reauthorization of the Highway Trust Fund at increased levels and capitalize a new resource known as the American Infrastructure Fund.
Last year, former President Bill Clinton pitched the concept of repatriation as long as companies bought infrastructure bonds with 10 percent of the repatriated funds, a suggestion that garnered bipartisan support.
“I believe if we repatriated the money now on terms that required say, 10 percent, of it to go into an infrastructure bank with a guaranteed rate of return, tax-exempt, of X, as a first step towards corporate tax reform, you could get a lot of that money back in America, turn it over, increase economic growth and launch the infrastructure bank with an adequate level of capital,” Clinton said.
Opponents of tax repatriation suggest that a repatriation tax holiday would boost revenues in the first couple of years, as companies rushed to take advantage of the temporary low rate, but it would bleed revenues after that because it would encourage companies to shift more profits and investments overseas in anticipation of additional tax holidays, thus avoiding taxes in the meantime.