Congress Finance

In Which the Rhetoric of Fiscal Conservatism Ceases to Convince

» Left with a chance to set in stone the rule that transportation funding should remain based on user fees alone, the House punts.

On Friday, members of the U.S. House took one of the most significant votes on transportation in years. A non-binding motion brought forward by Representative Paul Broun (R-GA) to limit federal transportation expenditures to receipts from the fuel tax assembled in the Highway Trust Fund was defeated, massively defeated, by a 82 to 323 vote. Translation: A large majority of the lower chamber endorsed the idea that the government should be using funds sourced outside of user fees — generally that means deficit-increasing debt — to pay for transportation investments.

Listening to the rhetoric of many political leaders in Washington, the outcome may come as a surprise. After all, isn’t this supposed to be a new age of fiscal discipline? Doesn’t everyone care about keeping expenditures in line with revenues to limit the deficit?

Apparently not when it comes to transportation. If last week’s vote proves anything, it is that support for the idea that spending on transportation should be limited to user revenues is confined to a right-wing minority so far on the sidelines that it does not even account for half of House Republicans. Faced with the choice between drastically reduced spending on infrastructure — a reduction of 30% or more if spending on transportation were to match revenues, according to some estimates (because of the fall-off in collections from the federal fuel taxes, which have historically paid for national spending on roads and transit) — or keep spending in line with demand, rather than the money available, the majority of elected officials across the political spectrum continue to select the latter.

The House’s vote comes almost 1,000 days since the transportation authorization legislation officially expired and it indicates that members of the Democratic and Republican Parties may not be as far apart in ideological terms as we might have thought. While the House GOP’s legislation announced earlier this year — H.R. 7, which would have significantly damaged transit funding — was certainly far from bipartisan, its Senate counterpart MAP-21 has just the right elements of moderation that can please politicians on both sides of the aisle, and indeed it made it through that chamber with a large majority of votes.

For a month now, House and Senate leaders have been working on a compromise between hard-core right-wing views about spending on transportation and the Senate’s moderation, and little has come of the negotiations. In fact, last week House Speaker John Boehner (R-OH) suggested that transportation spending be extended another six months, until the end of December, to avoid making any sort of hard decisions now about a long-term piece of legislation. (The current extension, which basically keeps federal spending at 2009 levels, will expire at the end of this month.) But now that it is obvious that members of both political parties really do want to keep spending going on infrastructure, perhaps compromise is in the offing.

Of course, in today’s Washington, in the middle of election season, you can’t count on anything of the sort.

Nonetheless, what choice do leaders on either side of the aisle have other than to compromise? Without a new law, spending on transportation won’t go up or down, but it will certainly remain above the levels provided for by the Highway Trust Fund. If that’s the case, why not at least make provisions for reforms of the transportation grant system, which everyone claims is too complicated already? That’s pretty much what MAP-21 does.

Republicans have demonstrated that they are unwilling to make the cuts to the federal budget for transportation that would be necessary if they wanted to honor their pledge to reduce the budget deficit; the vote last week proved that they care more about ensuring adequate investment in infrastructure (as they should!) than they do about taking out more federal debt in a period of record-low interest rates. Democrats in Washington, meanwhile, have shown no real interest in actually fighting for revenue increases through an increase in the fuel tax, major installation of tolling facilities, or the creation of a vehicle-miles traveled fee, all of which could restore the fiscal health of the Highway Trust Fund but which are considered too politically explosive to fight.

Thus here we are. Members of Congress seem to agree: The politically obvious choice is maintaining transportation spending and in the process doing nothing to increase taxes to pay for the program. Is that a big problem? Not really. But it certainly won’t do anything to reduce the deficit.

What does this suggest about the future of federal transportation spending? What seems clear is that it would be delusional to think that there will be any sort of quick return to a system in which expenditures are defined based on revenues. The grave for the user fee based model for transportation funding has just been dug a bit deeper.

18 replies on “In Which the Rhetoric of Fiscal Conservatism Ceases to Convince”

User fee financing of highways has always been something of a myth. Gas taxes were first introduced to pay for rural and suburban roads, at a time when most driving was on city streets that were paid for by real estate taxes. Essentially, the city drivers subsidized suburbanization.

Legislators from urban districts in the late 1930s, 1940s, and early 1950s fought to end this unequal treatment by getting gas taxes used to build expressways in cities too. In the early years of the interstate highway program, it appeared that gas taxes were paying for the roads, but that was an illusion because it was not sustainable. The costs of highway-building soared, and as older highways aged they needed expensive maintenance.

City urban and inner suburban drivers still subsidize outer suburban drivers ~ funded “highways” run the gamut from Interstate Highways through national and state highways down to County and Township highways … but not city streets unless they are state or national highways running clear through the city.

If entitlements should only be funded by payroll taxes, then highways should only be funded by gas taxes. Otherwise, the right-wingers quickly become the bigger, borrow-and-spend hypocrites here.

Plus, highway cuts offer a way to end all this false populism of beloved austerity so pushed by the Teabaggers. Show the voting public the consequences of spending cuts, even on popular items, like roads. If they truly want to tackle debt, rural America needs to pay up or shut up.

“rural America needs to pay up or shut up.” You can say that again to the rest of America. Everyone wants nice roads but when you ask about paying a toll for it, they say no. Increase in gas tax? Nope. Can’t have the cake and eat it without giving something in return.

If only these people had to drive themselves around the metro region where they work every day, funding transportation’d be easy. There’ve been countless articles and radio pieces about how Northern VA is suffering because of how bad the traffic is there.

What they need to do is bother taking a train besides the Capitol shuttle—if they drive through northern VA they’re likely to get a “build our way out of congestion” feeling. Plus they could rub shoulders with the common people.

I don’t think it’s any coincidence that the MBTA’s last spurt of modernization happened when Dukakis—an ordinary Green Line rider from Brookline—was governor.

They are very predictible they would keep kicking the can down the line on the same old bill from now and till the end of time in that it’s easer than to make a new one.

We fund all these crazy wars with borrowing and now there are talks of bailing out Europe with our tax money to keep them from sinking. So why does everyone scream murder when we want to borrow money to build our own highways and railroads but don’t care when it comes to other counties and wars?

There’s plenty of screaming about Europe (or, more precisely, US contributions to the IMF).

Adding tolls to freeways does not fit American culture and increasing fuel taxes, though smart, is a political non-starter during a recession with high gasoline prices.

The best answer, but Tea Party House of Reps won’t accept, is to use a percentage of Iraq and Afghanistan Defense savings coupled with existing fuel taxes to fund Transportation projects. No tax increases. But the Tea Party-controlled House won’t pass a MAP-21 bill now because its a Jobs win for Obama before the election. But they’ll pass it, if Romney wins.

Thats politics before country.

The City of Norfolk VA is in away being forced away from the none tolled freeways in that they are widening a two lane wide underwater tunnel called the Midtown Tunnel from two lanes to four lanes and extending a freeway from Interstate 664 to link up with it. This two lane tunnel used to have tolls on it in the 1950’s though the 1970’s but the tolls where removed. Now the tolls are coming back only this time they will be anywhere from $1.70 to $2.00 dollars a car. They are also going to be putting up several tolls anywhere from a $1.00 to $5.00 at several major bridge tunnel water crossings to try and widen Norfolk’s highway system to haddle the flood of traffic that is jamming it up. The Vriginia Beach light rail rail most likely will not happen anytime soon do to the state thinking about roads, roads and more roads.

Luckly they will get all these projects done in time for the ocean to finally rise up and shallow up the region solving the traffic proberms once and for all.

I’m clogged-up familiar with the Midtown tunnel between Norfolk and Portsmouth. To bad the region isn’t more aggressive expanding the Tide Light Rail System. between Norfolk, VA Beach and Portsmouth.

They need to put in a light rail line in the Hampton Roads Bridge Tunnel when they widen it from four to eight lanes in that they could out a third tube in the center of the two new car and truck only tunnels.

I am wondering what Norfolk’s plan for dealing with global warming is. Most cities in the US aren’t even close to having a plan, though NYC is starting to seriously think about rebuilding the Manhattan seawall taller.

In a truly educated nation, Paul Broun would be limited to screaming from atop a crate in some remote park. He would never be voted into any sort of elected office.

In the United States, he is part of the battle (with Michelle Bachmann, Steve King, Virginia Foxx, and Louie Goehmert) to see who can be the dumbest, most insane member of the House of Representatives in history.

This could be a case of be careful what you ask for.

Given that transportation funding is biased toward rural areas and rural states, wouldn’t forcing transportation funding to be tied to user fees and forcing local areas to fund their own transportation be an inherently PRO-URBAN policy?

I wonder why Canadian and Australian cities feel more livable than American ones. Could it be that cities and provinces were forced to pay for a balanced transportation system on their own instead of being subsidized significantly by federal governments? Could federal funding for transportation be actually distorting our choices to be pro-highway and pro-automobile and subsidizing it further by moving off of the gas tax linkage and onto the general fund could be even more so.

So, call the bluff on sticking to user fees. It may be bad timing and a shock to the system, but forcing local cities and states to fend for themselves (with maybe some limited federal support in the form of infrastructure banking/lending and technical assistance/information sharing) could just create the right balance to make transportation policy on the whole more livable and pro-transit.

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