DC Velocity - March 2015

64 DC VELOCITY MARCH 2015 www.dcvelocity.com IT’S BEEN A FORGETTABLE SIX YEARS OF PRESIDENTIAL stewardship of the nation’s transport infrastructure. Highway projects received just $27 billion of the $787 billion economic stimulus package in 2009. Federal programs limped along for years on a series of short-term funding extensions. The administration was disengaged during the summer of 2012 as Sens. Barbara Boxer (D-Calif.) and James Inhofe (R-Okla.) shepherded the successful passage of a bill reauthorizing the Highway Trust Fund for 30 months. It would ultimately take the White House five years to unveil a reauthorization proposal. That’s tame stuff for a president who repeatedly touted infrastructure investment as a tonic for both stagnant employment and diminishing economic competitiveness.

As fate would have it, history has given Obama a chance to atone for that. The administration recently proposed spending $478 billion over six years to shore up the nation’s roads, bridges, harbors, tunnels, and mass transit systems. More importantly, it seeks to pay for half the cost with a one-time 14-per- cent tax on the repatriation of foreign earnings held abroad by U.S. corporations. The current estimate of those holdings is $2 trillion, and the levy to return them is 35 percent.

We were intrigued in 2013 by the idea of linking repatriation to infrastructure when it was floated by Rep.

John K. Delaney (D-Md.), a freshman congressman with no political background. We have now become more intrigued with the White House proposal in play and with legislation introduced by Sens. Boxer and Rand Paul (R-Ky.) to allow corporations to repatriate earnings at a 6.5-percent rate providing the proceeds go to the Highway Trust Fund.

There are significant differences between the plans: The White House levy is mandatory and, as noted, a one-time expense. The Boxer-Paul version is voluntary and gives companies up to five years to repatriate. Still, the overarching objectives are the same, and the involvement of Boxer—now the transport powerhouse in Congress—and Paul, a national name and 2016 GOP presidential timber, adds important political heft.

Companies don’t like to be told how to spend their profits. But
unless Congress ends the practice of taxing U.S. corporations’
earnings wherever they earn them, they will have to pay the piper
to bring that money home. Better to cough up
earnings at a lower rate for investments in better
roads, bridges, ports, and transit systems that would
benefit their businesses.
The stars are as aligned as possible given the frac-
tured political landscape. Infrastructure spending
is politically color-blind. The latest extension to
the 2012 law expires in May, giving the issue some
urgency. The U.S. job creation machine is kicking in,
and good-paying infrastructure
jobs would add to the momen-
tum. Boxer, like Obama, will
not run again in 2016. She, too,
would like to burnish her legacy.
But it is Obama who must take
the lead. It won’t be easy. He faces
a Republican Congress loath to
give a Democratic president any
leeway the year before a general
election. He confronts opponents
who say the price tag is too high.
And he is working against the
general feeling of pessimism that
pervades official Washington.
But history is on Obama’s
side. In 1955, Congress refused
to fund the construction of a system of roads
connecting every state in the union. Undaunted
by assertions that a Republican president couldn’t
sway a Democratic Congress in a presidential elec-
tion year, Dwight D. Eisenhower pushed, prodded,
and compromised until he got the bill he wanted.
The Interstate Highway System is considered the
greatest public works project of the 20th century.
Six decades on, it’s hard to imagine life without it.

The wheel need not be reinvented. But it must be improved. Building the interstate system became Eisenhower’s enduring legacy. Improving it for generations to come could be part of Obama’s.