Congressional leaders have finally passed a bill that addresses a pressing issue among many Americans: the country’s crumbling infrastructure. Assuring the measure that was passed on Tuesday Dec. 2 will remedy many of the ailing bridges and roads, Congressional leaders are convinced the anatomy of the bill was suitably orchestrated. The bill passed the House of Representatives by a margin of 359 to 65, and passed the Senate by a margin of 83 to 16.
The qualms among the leaders, which have hindered progress in the past, had subsided for the joint interest in providing the country’s roads a means of renewal. Consisting of $305 billion and allocated over a 5-year period, the spending measure is hoped to alleviate the dire uneasiness posed by the country’s highways, roads and bridges.
The compromise and lack of foresight in drawing up the bill has provided an insufficient effort to fund it properly, according to The Washington Post. Utilizing a cut in dividend payments to the Fed banks and reallocating it to highway funding will not offer a long term financing solution, especially when compounded with the added revenues of selling the reserves of Federal oil. Standing at a former 6 percent return, the new dividend rate will be set to the rate of return on 10 year Treasury bonds which are currently pegged at 2.2 percent.
The Fed’s cut in dividend payments – formerly a much appreciated buffer – to fund infrastructure is not the only means in which they are subsidizing America’s travelers. The second subsidy is A draining of the Federal Reserve’s Rainy-day Fund which stood at $29 billion now to be diminished to $10 billion.
However, the glaring issue in funding resides in the complete negation of the country’s gas tax. Currently held at 18.4 cents per gallon, the tax has not been adjusted since 1993. Eroded by inflation due to no index and staggered by the respectable surge of energy efficient cars, the gas tax has had revenue shortfalls amounting to 70 billion since 2008, according to The New York Times.
Though, the bill does empower states to make more confident and bold investments in their infrastructure, withstanding the fact that the bill is a short term investment measure. Not only would states receive a 5 percent increase in highway project funding in the first year, but local transit systems would also receive an 8 percent boost.
The bill also reauthorizes the Export-Import Bank, according to Reuters, which has been met with fierce conservative opposition. However this bill renews it’s charter through Sept. 30, 2019 with some reforms including a lower lending limit.
The spending measure, could be seen as nothing but a stopgap in a glaring hole of mess and needed fix. Only a long term measure could reveal the cumulative requisite need to address the issue comprehensively according to the Washington Post. Further entailed is that the bill is only funded through the first three years. The bill has already passed the Congress and now lays fate to President Barack Obama.
Editor’s Note: Information from The New York Times, Reuters, The New York Post and The Washington Post was used in this report.