Friday, December 4, 2015

Transport Act Agreed to Try to Rescue Crumbling US Infrastructure

Bill Must be the Slowest FAST Fix in History
Shipping News Feature
US – At long last, significant progress has been made by lawmakers in the US to come up with a long term resolution to the ever growing funding gap for the country's deteriorating infrastructure, with Congress clearing a five-year, $305 billion highway bill that will fund improvements to crumbling highways and reopen the Export-Import Bank. The funding for this bill, ironically named the FAST (Fixing America’s Surface Transportation) Act (having taken seven years to get to this point) remains an issue, just as it was with the numerous proposals put forth previously, with this Act allocating funds from the Federal Reserve.

The Highway Trust Fund has been relying on short term patches since 2008 to prop up a package that is financed mainly through a gas tax revenue that has failed to keep up with inflation. After 36 patches totalling more than $70 billion, the Act will appropriate around $70 billion from sources other than a raise in the Gas Tax (a subject that chills the blood of most US politicians) with the vast majority of the new financing relying on the Federal Reserve surplus funds, a decision Chair of the Board of Governors of the Federal Reserve System Janet Yellan opposed.

The FAST Act calls for spending of around $205 billion on highways and $48 billion on transit projects between 2016 and 2020. It also re-authorises the Export-Import Bank to operate after it was allowed to expire in June. This agency helps US companies with foreign competitors and has now had its charter renewed through September 30, 2019, but with a lower lending limit among other reforms.

The bill is now on its way to President Obama who is expected to sign before the last Highways Trust Fund patch expires on December 4.

Photo: North Highway 89, Arizona after roadway collapse in February 2013.