That $500 billion highway bill: Too much, too soon.
Unless you live in Washington, D.C., or the Minnesota Iron Range, it’s possible you’ve never heard of James L. Oberstar, who wants to spend half a trillion federal tax dollars over the next six years on highway and transportation projects.
But, be assured, your representative in Congress knows who Jim Oberstar is. The Democrat from far northern Minnesota is chairman of the House Transportation and Infrastructure Committee. That gives him immense power over that most important political commodity: pork for folks back home.
There may be disagreement over health care reform and climate change, but when it comes to transportation spending, Democrats and Republicans are on the same side. They like it, and the more there is, the better they like it.
The last six-year highway bill, passed a year late with overwhelming bipartisan support in 2005, cost “only” $286 billion. That was before $787 stimulus packages and automotive bailouts, back in the day when $286 billion was real money. Mr. Oberstar proposes boosting that by 75 percent this time around, arguing that spending on highways, bridges and transit projects should be considered stimulus spending as well as highway spending.
The trouble is, there’s nothing like $500 billion in the Highway Trust Fund, nor is there likely to be over the next six years. The trust fund accumulates federal gasoline taxes (18.4 cents per gallon) and other user fees. Transportation spending is supposed to be self-sustaining.
But Americans are driving less and they’re driving more fuel-efficient vehicles, so the fund is running out of money. Last September, Congress voted to prop up the fund with $8 billion in general fund revenue; last week, Congress gave it $7 billion more to help keep the fund solvent through Sept. 30, the end of the fiscal year.
To boost spending to $500 billion over the next six years would require at least $200 billion more than what the trust fund probably will contribute. That could mean either a tax increase or more debt.
The Obama administration would rather not have that fight right now, not with so many other issues on the table. It has proposed extending the current highway bill for 18 months, making up the trust fund shortfalls as they occur.
And then there’s the issue of earmarks, those special projects inserted into spending bills outside the formal committee process. It will be recalled that Alaska’s infamous “Bridge to Nowhere” was an earmark inserted in the 2005 highway bill. Rep. John Mica, R-Fla., the ranking Republican on the transportation committee, estimated that there are some 6,800 earmarked projects in Mr. Oberstar’s bill, none of them yet disclosed.
Jim Oberstar, popular guy
There is much to like about Mr. Oberstar’s bill. It streamlines the federal transportation bureaucracy and devotes $100 billion to rail and mass transit projects. But absent a solid funding source, it is too much for Congress to absorb this fall. As stimulus funding, it fails the “immediacy test.” Too much of its effect would be felt too far down the road.
The federal gasoline tax should be raised; it’s good policy, both in terms of conserving energy and moving the nation toward a more sustainable energy future. But now is not the time to do it; the nation’s economic condition is just too fragile.
The nation needs a solid debate on transportation policy — on taxes, on priorities, on process and affordability. But, as they say at Wrigley Field, wait ’til next year.
I’m sure there’s more to this than meets the eye, but it does seem like a lot more than we can bite off at this point. I love public transit, but where is this money going to come from?
And how many of these projects are new versus repairs? At least with repairs you can make the argument that we’re updating our infrastructure to compete with the rest of the world; $500 billion in new projects really isn’t sustainable at this point.
Hell, go ahaead and raise the gas tax. We’re already at the debt status of a banana republic, so what’s another half-trillion here or there? Maybe Missouri could some of the transportation money to build a museaum to earmarks.
Taxes, the siren call of politics. Use government pressure and incentives to push drivers into more fuel-efficient cars, then raise taxes when people actually use less fuel. Who cares if poor people won’t be able to drive to work, school, or the grocery store? All the car plants are moving offshore and taking jobs with them, so why should we reward them by buying cars anyway? Instead, we could have a subsidy for ‘personal green transportation’ and call it “Bucks for Bicycles”.
I’m so thankful that the empathetic liberals at the Post are willing to let me keep some of my earnings ’til next year. Maybe.
The federal gas tax has been set at 18.4 cents per gallon since 1993. Adjusted for inflation, that is 12.4 cents per gallon now. And while fuel efficiency of new models has only increased marginally since the early 90s, overall fleet efficiency has increased significantly as the much less efficient cars from the 70s and 80s have been retired. Fuel efficiency is good, but if we burn less gas per mile, the feds get less tax revenue per mile. So in fact, now IS the time to increase the fuel tax.
It puzzles me that you believe “the nation’s economic condition is just too fragile” to increase the fuel tax. At the same time, you supported a costly and ineffective stimulus package, a health plan which will result in expensive mandates upon businesses that will drag down employment and investment, and environmental legislation which will impose significant costs upon families and businesses. The economic impact of the fuel tax will be insignificant compared to Mr. Obama’s “cap and trade” proposal.
The fact is, low fuel taxes have meant inadequate revenue for highway maintenance and construction. They have also contributed to our “cheap gasoline problem” that ultimately enables urban sprawl. The debate on this important issue has been deferred for decades, and inner-ring communities like Maplewood, University City, and Ferguson have paid the price.
> I’m so thankful that the empathetic liberals at the Post are
> willing to let me keep some of my earnings ’til next year. Maybe.
Not so, MercMan. They just don’t want anything to distract from the federal take-over of health care and “cap ‘n trade.”
How much of that 18.4 cents goes to actual road contruction? My guess is a lot of it goes towards the greasing of local politicians and unions in the areas roads are to be built.
Nick, I generally agree with your statement on the fuel tax versus cap and trade over the long haul, but in the short term the affect of raising the fuel tax now would be larger than you assume. 70% of the GNP is consumerism, and all those good and services have to be driven to or brought in by fuel-powered vehicles. Given the threat of more taxes to erase the debt, pay for a national healthcare plan, and retire the “bad debt” of the banking industry, any tax will be a dagger in the heart of economic recovery.
Of all the items we should be spending on is our infrastructure. Our society has excelled and increased its wealth becuase we built one of the best highway/rail/airport transportation networks in the world. It is crumbling on us and business is depending mostly on roads, bridges, etc. built over fifty years ago. In the meantime, we are willing to throw billions upon billions to save the financial middlemen who have made billions more (including an expected combined bonus payout of 33 billion this year alone). Obama administration is willing to throw a billions at healthcare and other transfers of wealth but is running from a Democratic who actually wants to build stuff that will last us another 50 to 100 years. Infrastructure is not a dagger to the heart. Dagger to the heart is transfer of monies from one pot to another pot and claiming that you have created new wealth.