Obama’s (Dis)information Highway
Every once in a while, an issue arises that seems to crystallize most all of the elements of relationship between the people and their government. Such is the case with the troubled Highway Trust Fund, which is apparently about to run out of money. In this story, we witness the confluence of government power, incompetence, mismanagement, corruption and raw politics, together with more sober notions of how best to hold lawmakers accountable, and how government programs should best be funded and implemented.
President Obama was in our neck of the woods this week, and while one might hope he would address, say, Virginia’s over 11%+ real unemployment rate…or perhaps, given the Commonwealth’s #1 status in veterans per capita, apologize for tragic mismanagement of the covenant to take care of our vets…or maybe at least provide lip service to Virginians who were illegally targeted by the IRS (hard to keep track of all these scandals).
But alas, he was instead here to chastise the Republicans for not raising corporate taxes enough to devote $302 billion to the Highway Trust Fund…even though there are so many shovel-ready projects! (oh, I forgot, the president said he discovered that shovel-ready projects did not really exist AFTER he sold his stimulus package on the basis that they did – but no matter, because contrary to public perception, only about 5% of the 2009 stimulus went to infrastructure anyway, with a far larger share going to prop up public unions).
The problem is that the federal government has mismanaged this trust fund, and actively encouraged behavior to reduce its receipts. Congress is right to withhold approval for any new spending unless changes are made, and when it does approve funding, it should not authorize tax increases.
According to the New York Times, “In April, Mr. Obama sent Congress a proposed transportation program that would spend $302 billion over four years, financed both by traditional gasoline taxes as well as by the elimination of some corporate tax breaks.” The trouble is “Republicans have resisted that plan, calling it just another tax increase that will stifle job creation. The White House said on Monday that it was open to other financing methods and in the interim would support the House’s temporary plan,” which has now passed the House. One of the very few powers this president hasn’t tried to exercise is that of funding government operations. While the Constitution provides the Origination Clause preventing the President from unilaterally altering taxes, he has hardly let our law of the land restrict him in several other instances.
The Highway Trust Fund, absent legislation to change its funding, would not have been able to cover its commitments to state funding projects in August. The projects it promised to fund run somewhere between $14 or $15 billion more than it will take in. About 27 percent of highway and transit spending currently comes from the federal government, via the HTF, with states and municipalities splitting the remainder almost evenly. The HTF is not set to “run dry” in August, as many are reporting, but it did tell states to expect an average 28 percent reduction in aid at that point unless Congress acts.
So, the President came to our purple state, in my purple county to slam the Republican House for not doing his bidding. He presumably thinks his message of criticizing the Congress will steer attention away from his own palpable mismanagement of the country. The problem is that continuing to pay more for less, and failing to exercise fiscal discipline is just kicking the can down the road, leaving a bigger bill that taxpayers must pay for later. Obama accused congress of doing just that, after he agreed to support a stop gap measure that funds the programs until next spring. “So Congress shouldn’t pat itself on the back for averting disaster for a few months, kicking the can down the road for a few months, careening from crisis to crisis when it comes to something as basic as our infrastructure,” he said. “Instead of barely paying our bills in the present, we should be investing in the future.”
Forgetting for a moment the president’s lost golden opportunity to rebuild our infrastructure in the 2009 stimulus, what could be more like kicking a can down the road than failing to address an ongoing 15 billion dollar shortfall in revenue vs. spending, and refusing to tie spending to revenue? Why on earth would revenue ever be less than spending without rules in place to make it so? Of course, as we have seen repeatedly over the years, the temptation for all administrations, Republican as well as Democrat, is to spend more now and promise savings and fiscal responsibility later. Add to that the administration-wide, if not culturally universal message that we should drive hybrids and electrics, and demonize traditional cars that get lower miles per gallon, and we have a recipe for disaster. You see, the people who buy gas and diesel are the ones funding the Trust Fund. The federal taxes on the fuel go right to the fund and when people buy less fuel, or none at all, then they are getting a free ride on our roads.
Might a targeted tax for Prius owners be the answer at this time? Tempting though it may be, new taxes are generally not the answer for increasing the good of the body politic. Perhaps though, if all of the money collected for the improvement of the nation’s highways actually went to their improvement, we could see major improvements without increased taxation. The problem with that idea is political – it takes power away from politicians.
As Heritage Foundation transportation analyst Emily Goff puts it, “When car and truck drivers pay the 18.4 cents per gallon federal gas tax (24.4 cents per gallon for diesel) at the pump, they expect better roads and less traffic congestion in return. Instead, Washington diverts more than 25% of that money to subways, streetcars, buses, bicycle and nature paths, and landscaping, at the expense of road and bridge projects.”
The wider the scope of projects allowed to be covered under the fund, the greater the mischief from those with influence over how the money will be spent. Republicans should insure all funds spent by the trust fund go to actual highway infrastructure improvement and repair. That is, nothing for light rail or dog parks or bike sharing, all of which may be fine ideas but have nothing to do with highway construction repair or maintenance. Many were fooled by Obama’s promise of shovel-ready jobs waiting for stimulus spending. The problem is they were just one of the many falsehoods propagated by the administration to secure money to bestow on their friends and allies. We would be fools to allow it to happen again.
Most informed estimates put the price tag for necessary infrastructure improvement at over $2 trillion. As pointed out by Ezra Klein of the Washington Post, “A bipartisan group of former transportation secretaries released a report saying we need about $194 billion in annual infrastructure spending through 2035.” One good way to meet that challenge would be to make sure the Highway Trust Fund – here is a novel idea – is actually used only for highways.
