Tis the season for the President to begin his annual fight with Congress over the budget. With what may be the longest name for a piece of legislation ever devised, the President and his DOT have proposed a revised “Generating Renewal, Opportunity and Work with Accelerated Mobility, Efficiency and Rebuilding of Infrastructure and Communities throughout America”, or GROW America Act, with nearly $95 Billion in proposed funds committed to transportation and infrastructure over 6 years beginning in 2016. The proposal includes funds for transit and high speed rail investments, and a 67% increase in the budget for Federal Transit Agency projects. The allocation of funds for TIGER grants would triple over the next 6 years with this budget. The FRA would also benefit from this new proposal, with the budget allocating an additional $3.4 Billion over current spending levels in 2016.
How do we pay for all of these programs? The President is proposing that the funds could be generated through revisions in the tax code to tax foreign earnings of multinationals currently not subject to US taxes. Although the concept of taxing someone else is appealing, there is likely to be significant corporate lobbying to avoid a change in the status quo. In addition, the Republican led Congress will not be supportive of significant increases in spending, particularly in light of the size of the current budget deficit. Although the Highway Trust Fund is desperately in need of funds to keep our infrastructure in serviceable condition to support the economy, it is not likely that a budget this ambitious will pass. Looks like this budget season will be a long and difficult one.