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Senate Republicans’ Plan

The Republican Roadmap

In addition to suggesting that unused federal COVID relief funds be repurposed, Senate Republicans propose two additional major sources of new funding for infrastructure. 

First, Senate Republicans propose an emphasis on having those who use infrastructure bear some of the costs for increased infrastructure spending. The Problem Solvers Caucus also proposes this approach.  The Common Sense Coalition originally supported this approach as well.  However, they agreed in the negotiations with President Biden to drop this part of their plan.

Funding Sources

Not Included in the Bipartisan Infrastructure Framework

  • Increase usage-based taxes and fees
  • Save money by streamlining permit process

One user-focused method is indexing federal gas and diesel taxes to inflation. Another user-based approach supported by the three original proposals other than President Biden’s plan is to ensure that electric vehicle owners help pay for the roads they drive. Because they do not pay federal fuel taxes, other mechanisms have been proposed. The Problem Solvers Caucus recommends an annual surcharge on electric vehicles or a vehicle miles traveled (VMT) program for both gas and electric vehicles that could replace the federal fuels tax. In VMT programs, miles traveled are tracked electronically.

Second, Senate Republicans propose that we streamline and speed up the processes for getting permits to build infrastructure projects. They argue that this will, in effect, help with funding because it would significantly reduce the costs of those projects. The Problem Solvers Caucus joins Senate Republicans in recommending this measure, as do bipartisan think tanks like the Bipartisan Policy Center. Senate Republicans and the Problem Solvers Caucus propose, for example, extending FAST 41 provisions more broadly.

The Case For

Supporters of user-based taxes and fees argue that it is only fair that those who use a given type of infrastructure help pay for the increased spending on it. They observe that paying the federal tax on gas or diesel is one of the primary mechanisms to do that. Many also observe that in the 28 years since federal fuels taxes were increased, those taxes have lost to inflation a significant amount of their real value to pay for the wear and tear on the roads at the intended level. By at least indexing the fuel taxes to inflation going forward, they argue, their real purchasing power will not continue to decline. Supporters also argue that the number of electric vehicles now on the road means that it is high time that electric vehicle owners quit free loading on gas and diesel vehicle owners to also pay their fair share.

Senate Republicans and the Problem Solvers Caucus also argue that it makes little sense to flood state and local governments with an historic increase in infrastructure funding without streamlining the permitting process. Without permits the projects those dollars are supposed to fund cannot start. Supporters argue current processes are convoluted and often involve as many as a dozen separate agencies to obtain all the permits required to complete one infrastructure project. They also argue that the processes are overly time-consuming, often taking more than five years to complete and sometimes more than ten years. Those long permitting periods, they observe, significantly increase project costs. Senate Republicans and the PSC argue these are unnecessary cost increases. It is not about lowering environmental standards, they suggest, but simply making the process more rational and efficient in reaching decisions about whether a project meets those standards, including environmental standards. Supporters of permitting streamlining argue that other developed countries with environmental standards as high or higher than those in the U.S. typically permit projects in two years or less.

Proponents argue that streamlining permitting processes should be a part of any infrastructure package for two reasons. First, they argue, part of the goal of new funding is to rapidly put people to work by quickly ramping up infrastructure projects. That cannot be accomplished without streamlined permitting, they argue. Supporters argue that without streamlining, instead of taxpayers spending their own money in economically productive ways, that money will be sitting idle in government coffers waiting for permits rather than creating new jobs.

Second, Senate Republicans, the Problem Solvers Caucus, and others argue that permit streamlining, in effect, can help fund infrastructure. Because long and complicated permitting processes significantly increase infrastructure project costs, reducing those costs means that we can get significantly more infrastructure improvements with the same tax dollars. Those benefits include more dollars going towards jobs on the ground building and maintaining our infrastructure and fewer dollars spent on unproductive bureaucratic processes.

The Case Against

President Biden argues particularly strongly against measures that place some of the burden for increased infrastructure spending on users. The President is committed to keeping his campaign promise not to raise taxes on families earning less than $400,000 per year. The White House argues that whether it is indexing the federal fuels tax, going to a vehicle miles tax (VMT), or electric vehicle surcharges, those taxes will represent a bigger proportion of working and middle-class families’ income than it will for wealthy corporations or individuals. In an era of growing income inequality, the President argues, the user approach takes us in the wrong direction. President Biden also suggests that we should be increasing incentives to buy electric vehicles rather than discouraging their use by increasing fees on them. Opponents on the left and right also raise privacy concerns with the electronic vehicle tracking required for a vehicle miles tax (VMT).

The White House argues that the permitting processes in place are designed to keep us from permitting projects without fully understanding their environmental impacts. With rising climate change impacts, the Biden Administration argues, it is the wrong time to shortchange the analysis of environmental impacts beyond the effective streamlining provisions that have already been put in place.

The Evidence

The federal tax on gas was raised from 14.1 cents per gallon to the current 18.4 cents in 1993. The federal tax on diesel and other motor fuels was raised to 24.4 cents per gallon in 1993. The Peter G. Petersen Foundation reports that the real purchasing power of these federal motor fuels taxes have declined by 45% because of inflation in the 28 years since the current rates were set.