Politics

CBO: Harbor Tax Provision in House Water Bill Widens Deficit

Change could increase on-budget deficits by more than $5 billion over a 10-year period

Rep. Peter DeFazio, D-Ore., and Infrastructure Chairman Bill Shuster, R-Pa., included a provision in the water infrastructure bill that would allow spending directly from the fund without approval by appropriators. (Bill Clark/CQ Roll Call file photo)

A contested provision that could be in the water infrastructure bill scheduled for House floor debate this week would increase on-budget deficits by more than $5 billion over a 10-year period, the Congressional Budget Office estimated Monday.

The provision in the water resources development bill as it was introduced would allow for spending from the Harbor Maintenance Trust Fund without appropriations starting in fiscal 2029 and would increase direct spending by more than $2.5 billion and on-budget deficits by more than $5 billion in at least one 10-year window following its effect date in 2029, the CBO said.

For the immediate 10-year window, the bill would cost about $2.5 billion, the CBO said. That projection is based on an assumption that “the authorized and necessary amounts will be appropriated” for work on $2.7 billion of authorized projects and programs over the next 10 years, the report said.

The report estimated that the federal government would appropriate an additional $1 billion after 2028 for the projects authorized in the bill and not completed by the end of the 10-year window.

The Harbor Maintenance Trust Fund receives funding from an ad valorem tax on imported goods. Its intended purpose is to pay for operation and maintenance at U.S. ports, but congressional spending from the trust fund is on the discretionary side of the budget and is controlled by appropriators, who typically spend less than the revenue collected.

The CBO projects that the trust fund’s surplus will reach about $15 billion in 2029. Lawmakers have recently said the surplus is about $10 billion.

In an effort to address maintenance needs, authors of the bill — led by House Transportation and Infrastructure Chairman Bill Shuster of Pennsylvania and ranking Democrat Peter A. DeFazio of Oregon — included a provision that would allow spending directly from the fund without approval by appropriators.

The Rules Committee stripped that section out when it produced its print of the bill for consideration this week. The committee said the provision violated a budget point of order.

“I am extremely disappointed that the Republican leadership decided to strip a bipartisan provision that would have ensured that funds collected in the Harbor Maintenance Trust Fund (HMTF) are only used for harbor maintenance — not for unrelated government spending,” DeFazio said through a spokeswoman Monday.

DeFazio and Shuster, along with Water Resources and Environment Subcommittee Chairman Garret Graves of Louisiana and ranking member Grace F. Napolitano of California, introduced a similar floor amendment last week.

The Rules Committee will determine procedure for floor debate of the bill Tuesday, and Majority Leader Kevin McCarthy has scheduled it to be on the floor later this week. 

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