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Capitol Watch: Devolution: Sideshow or Legitimate Alternative?

By Anna Denecke, Associate, Blakey & Agnew, LLC

The pressure is on for Congress to find the funding for a long-term surface bill. The administration has placed a stake in the ground — on March 30, Secretary Foxx transmitted a six-year, $478 billion surface transportation bill to Congress. President Obama suggested that in addition to the $239 billion in expected revenue from fuel taxes over six years, $239 billion could be recouped from a one-time, mandatory 14 percent tax on off-shore earnings of U.S.-based companies. Despite "laying their cards on the table," as Secretary Foxx called it at a February Capitol Hill hearing, Republicans and Democrats alike remain skeptical of the proposed corporate tax structure overhaul.

With a long-term surface transportation price tag comes a likely resurgence of the “devolution” movement. Devolution is the other side of the federal funding coin argument – we need less federal funding and oversight, not more – and advocates of this theory ask that Washington shift current federal taxing authority from the federal government to the state governments.

Last Congress, Republicans in the House and Senate introduced companion bills that would lower the federal gas tax from 18.3 cents to 3.7 cents per gallon and phase out the diesel fuel tax from 24.3 cents to 5 cents. Rep. Tom Graves (R-SC) secured 55 co-sponsors for the Transportation Empowerment Act. Sen. Mike Lee (R-UT) introduced a companion bill that ended up in the form of an amendment to the short-term extension of MAP-21. It received 28 yeas and 69 nay votes.

This Congress, the devolution companion bills have not yet been reintroduced. However, the Republican budget moved to reform the Highway Trust Fund by limiting expenditures in FY16 to receipts coming in. Although the budget is a nonbinding resolution, the House adopted the document. It essentially proposes to take the first step towards devolution by absolving Congress of the responsibility of finding new funds to meet existing obligations.

Devolution activists have more than just the House budget in their sights in the 114th Congress. Some in the conservative wing of the Republican Party are pointing to the fact that Republicans control both sides of Capitol Hill for the first time since 2006. Furthermore, if Congress can’t produce a bill, thwarting a long-term plan is producing a "de facto devolution." In other words, states like Iowa and

Virginia are hiking their own gas taxes in the face of a bankrupt Highway Trust Fund and dwindling federal dollars.

Former Majority Leader Harry Reid (D-NV) allowed a vote on Sen. Lee’s devolution bill last year. Hopeful devolution advocates don’t foresee a scenario that Majority Leader Mitch McConnell (R-KY) wouldn’t also allow the bill, or some version of it, to come up for vote. However, it should be noted that Sen. McConnell voted against the Lee amendment in the 113th Congress.

He’s not alone – the original author of devolution, Sen. Jim Inhofe (R-OK), who is the self-assessed "most conservative member of the Senate," is an ardent backer of a strong federal role in surface transportation. Senator Inhofe repeatedly reminds conservatives to refer to Article 1, Section 8 of the U.S. Constitution, more commonly known as the Commerce Clause. It is there, Sen. Inhofe argues, that Congress derives its power to oversee investments in roads, bridges, and transportation.

Key to countering the devolution movement is a show of force from House and Senate leadership. Transportation & Infrastructure Committee Chairman Shuster is on record criticizing devolution as an unworkable theory. On the other side of the Capitol, Sen. Inhofe’s is well-positioned as Chairman of the Environment and Public Works (EPW) Committee to stop a move towards devolution; EPW drafts the highway language in transportation bills.

With Sen. Inhofe’s strong-arm, a continued anti-devolution stance from Majority Leader McConnell and partnership with Chairman Shuster, the hope among transportation circles is that the devolution firewall will stand.

Blakey & Agnew, LLC is a public affairs and communications consulting firm based in Washington, DC.