REPORT FROM TAXPAYERS FOR COMMON SENSE – This week was poised to be a highlight for transportation dreamers, with a reauthorization proposal in the President’s budget and votes in the House and the Senate. Instead it’s become a nightmare for taxpayers, with politicians using fake savings to justify real spending. The whole process is a highway to nowhere.
We knew from the start that the road to a transportation bill would have plenty of potholes. The last transportation bill — which Rep. Don Young (R-AK) proudly proclaimed he stuffed like a turkey — was reminiscent of the last decadent days of Rome. It was filled with earmarks, jaw-dropping sums for powerful lawmakers, the Bridge to Nowhere, and perhaps its “greatest” legacy: bankrupting thehighway trust fund.
The 18.4 cents per gallon federal gas tax hasn’t been increased since 1993. A confluence of factors (inflation, better fuel efficiency, fewer miles traveled) means it’s not delivering as much as lawmakers want to spend. Therein lies the rub: their spending eyes are bigger than their revenue stomach.
“User pays” has been a rock-ribbed principle of the highway program for decades. This means that the transportation system is paid for by system users, largely in the form of gasoline taxes. The more you drive, the more you pay into the program. But a series of recent raids on the general treasury, to bailout the trust fund, has undercut that ethos. Now House Republicans, Senate Democrats, and the President have proposed to further erode this principal, and in turn, make the deficit picture even worse.
The House majority proposed tapping into speculative future royalties from increased offshore and Arctic drilling, as well as the yet-to-be-profitable oil shale industry, and dipping into increased pension contributions from federal employees (the pension piece is being (ab)used elsewhere now, as an offset in the payroll tax holiday package). The impact of these energy provisions is completely speculative, offsetting concrete spending with ethereal future revenue.
The Senate bill found a bunch of revenue raisers, most unrelated to transportation, to make up for highway trust fund shortfalls. This not only violates the user pays principle, but also provides just two years of transportation spending paid for with ten years of tax revenue. To paraphrase Wimpy, they will surely pay us in ten years for some highways today.
This week, the President entered the fray with his fiscal year 2013 budget proposal. His reauthorization proposal is the most robust: a six year, nearly half trillion dollar ($476 billion) proposal. This dwarfs the Senate’s two year, $109 billion and the House’s five-year, $260 billion proposals. But it is also the most audacious in its disregard for user pays: tapping $231 billion worth of fictitious “savings” from ramping down overseas military operations.
All of these proposals ignore or at best delay getting our transportation financing house in order — where spending and revenue match. The President’s budget blithely glosses over that fact, stating: “After the six-year reauthorization period, the Administration is committed to working with the Congress on a financing mechanism.” Yeah, well that should read “the next Administration will be stuck figuring out how to dig out of this hole” because no matter what happens in November, there will be a different Administration six years from now.
The only solace we can offer taxpayers is that this year is going to be so dysfunctional in Washington there is little reason to worry that any of this will be enacted. But the post-election lame duck session and the start of the 113th Congress in 2013 are going to be doozies. Let’s hope Congress is better prepared to lead by then, or the road ahead doesn’t look any smoother than it is today.