Editorial: Congress detours from common sense on the Highway Trust Fund

[cpzilliacus]

Washington Post: Congress detours from common sense on the Highway Trust Fund

BOTH PARTIES want to do nothing but squabble before this year's election. Not much will stop them – except, perhaps, this dose of reality: If political point-scoring is all they accomplish over the next several weeks, work on the nation's roads, bridges and rails will come to a halt.

The federal Highway Trust Fund is set to run out of money this summer. Without a fix, federally backed transportation projects all over the country – not just highways – would be in danger of severe disruption or cancellation. That translates into high costs now to stop and restart projects once funding comes through, higher costs in the future as contractors build the risk of funding holdups into their prices, downward pressure on construction jobs and unnecessary delay for anyone who uses the infrastructure. Failing to shore up the fund in time would be plain legislative malfeasance.

But, to date, Washington's moves to fix the funding problem haven't been far from that low distinction. The smart and obvious way to fund federal transportation policy is to create a steady, long-term funding source to finance multi-year projects, one that relies on fees from users – such as a higher gas tax or a vehicle-miles tax. It is both efficient and fair to require drivers to pay according to the amount they exploit and degrade the roads. This discourages overuse rather than subsidizing big-time road users. Congress set up just such a system when it established the gasoline tax and dedicated its revenue to the Highway Trust Fund. But lawmakers haven't raised the gas tax since 1993, preferring instead budgetary gimmickry and short-term patches to fill holes in the fund.

[cpzilliacus]

N.Y. Times Op-Ed: America's Highways, Running on Empty

IF you think your commute is getting worse, it's probably not your imagination. And no, it's not because there are more cars on the road. The potholes, the stalled construction projects, the congestion – it's because the highway trust fund is almost empty and, without a fix, could run out of money this summer.

Federal transportation funding relies heavily on user-based fees, in the form of gas taxes. While that worked for decades, it began to break down after Congress stopped raising the tax, which has been stuck at 18.4 cents a gallon for over 20 years. Since then, people have begun driving less and using more fuel-efficient cars, which means less tax is paid. Even worse, the tax is not indexed to inflation.

In the past Congress has adopted a series of stopgaps to shore up the fund. But unless we reform the way we pay for transportation improvements, we will keep lurching from funding crisis to funding crisis, with our roads getting worse by the year. The only solution is to supplement the tax with dedicated federal funding – which would not only solve the money problem, but open the door to long-dreamed-of innovations in our transportation system.

The obvious solution, raising the gas tax, is a political nonstarter. And even if it could pass, Congress would be tempted to direct some or all of that revenue to other purposes, like deficit reduction – it did just that in 1990 and 1993.

[SteveG1988]

This is what happens when 24 years of putting it off to the next administration does.

[cpzilliacus]

Baltimore Sun op-ed: Ailing U.S. infrastructure needs public-private investment

When traveling this summer, you will likely encounter some combination of traffic on the highway, large crowds and delays at the airport and high gas prices. Some of this is the natural result of vacation season, but these experiences are also due to the declining state of our nation's infrastructure. While you may not fully appreciate it as you sit frustrated in bumper-to-bumper traffic, the time is ripe to follow a new path for improving our roads, bridges, pipelines and more – essential investments for bettering our economy and strongly positioning the United States to be more competitive in the 21st century.

The poor state of our nation's infrastructure is shocking. Recent Federal data indicate that 63,000 U.S. bridges are in need of significant repair; 333 of them in Maryland. And driving on roads in need of repair costs the state nearly $1.6 billion a year in operating costs and vehicle repairs; that's $422 per motorist.

There is a direct correlation between investing in infrastructure and improving the economy, including the nation's employment rate. While our economy continues to improve following the Great Recession, it is not growing nearly fast enough for many. As of April, the unemployment rate for people with only a high school degree was almost double that of someone with a bachelor's degree or higher, and the rate for people who had not finished high school was just about triple the rate for people who had a college education. Many unemployed, non-college graduates are in the construction industry, which is currently experiencing double-digit unemployment and has not seen the sustained pick-up necessary to truly lift our economy.

[cpzilliacus]

Another N.Y. Times op-ed: A Game of Groans - The Fun in the Highway Trust Fund

Today let's find fun ways to talk about the Highway Trust Fund.

I'm thinking about a game, where players move tiny cars around the board, trying to make money for road and bridge repair. If nobody wins, construction workers will be laid off, the economy will tank and every player has to spend the winter sitting in a 7-foot-wide pothole.

This could happen! O.K., not necessarily the pothole part. But the Trust Fund is about to run out of money. It's a fiscal cliff for the nation's road crews.

Totally important subject. Plus, you know, we've got a game.

Gather around the board. Players have to pick a route toward raising at least $15 billion before Congress bolts for summer vacation. Every approach has its own dangers.

[cpzilliacus]

McClatchy Washington Bureau: With highway fund running dry, DOT and Congress look for revenue

The U.S. Department of Transportation said Tuesday that it would start limiting payments to states for road and transit projects next month in an attempt to conserve the federal Highway Trust Fund's rapidly diminishing cash balance.

Usually, the department reimburses states for transportation projects upon request. But beginning Aug. 1, the states will have to live paycheck to paycheck, receiving funds only once every two weeks as money is collected through federal gasoline taxes.

The move may put pressure on Congress to approve at least a short-term fix before its August break begins. The DOT estimates that the highway fund will hit zero in late August, potentially idling several hundred thousand workers as midterm elections loom in the fall.

[cpzilliacus]

Wall Street Journal: U.S. to Reduce and Delay Highway Funding Beginning in August -  Transportation Department Acts as Trust Fund Dwindles Amid Congressional Impasse

Federal funding for repairing bridges and highways will be reduced or delayed starting in August, and the restrictions will last until Congress reworks financing for the Highway Trust Fund, Transportation Secretary Anthony Foxx said Tuesday.

Mr. Foxx said in letters sent to all 50 states that the dwindling trust fund made the funding cuts necessary. States are typically reimbursed immediately for certain transportation projects, but the new restrictions will direct money to states just twice a month.

The administration's warnings come as the White House is trying to turn up pressure on Congress to boost funding for the federal fund, whose balance is expected to dwindle to zero next month from $8 billion at the end of May.

Many Democrats and Republicans say they want to continue funding highway projects, but they differ widely on how to finance new spending.

[Sykotyk]

It's amazing that "raising the gas tax is a non-starter". The government gladly pays more for any other service, and charges for any other service, when expenses rise. Why wouldn't the gas tax rise?

Increase the tax, index it to inflation, and index it to fuel efficiency of new car sales as they rise, the CPG tax rises. No more politicking.

[vdeane]

No need to index to fuel efficiency yet.  Hybrids/electric cars make up a VERY small percentage of the fleet.  I would support an electricity tax to be collected at the homes of people with electric cars and at charging stations.

[pctech]

Election year politics. Bottom line, you have to pay for infrastructure in some manner. The government of the US. has lost all credibility.

[cpzilliacus]

N.Y. Times: House and Senate Committees Offer Competing Rescue Plans for Highway Fund

WASHINGTON – House and Senate tax-writing committees on Thursday drafted competing plans to refill a highway trust fund running on empty, setting up a confrontation that could stop work on tens of thousands of infrastructure projects.

Both the House Ways and Means Committee and the Senate Finance Committee plans defer the larger issue of finding a way to keep the trust fund solvent over the long run, and instead would provide $11 billion to keep money flowing until about May.

But even with their sights set low, the panels could not come together. The House committee, resistant to anything resembling a tax increase, relies on three provisions: extending customs fees on importers that otherwise will expire, taking money from a separate trust fund for leaking underground storage tanks and changing rules on private pension contributions.

The Finance Committee bill, drafted by Senators Ron Wyden, Democrat of Oregon, the chairman, and Orrin G. Hatch of Utah, the ranking Republican, would use those three provisions as well. But Mr. Wyden trimmed back the pension provision and made up the lost revenue with a series of measures intended to force better compliance with existing tax law.

[hbelkins]

Since everyone is talking about raising the gas tax, I thought this was interesting:

http://www.ijreview.com/2014/07/156660-chart-shows-big-states-tax-bite-gallon-gasoline/

It shows which states have the highest gas taxes, and also provides a breakdown of the per-gallon price.

Crude oil accounts for 67 percent of the cost of a gallon of gas. Taxes take 13 percent, and then 10 percent each for two entities in the supply chain.

[SidS1045]

It's amazing that "raising the gas tax is a non-starter". The government gladly pays more for any other service, and charges for any other service, when expenses rise. Why wouldn't the gas tax rise?

You're kidding me, right?  Have you actually been asleep since 1992, when an incumbent president lost re-election because he felt it necessary to raise taxes?  NO tax increase, no matter how necessary or well founded, will even get off the ground in this political climate.  Rigid adherence to ideology trumps common sense in Washington and has for too damn long.

[cpzilliacus]

Wall Street Journal (note: paywall may prevent you from seeing full article - pm me with a real e-mail and I will send it to you): Governors Slam Inaction on Highway Funding - Officials From Both Parties Call for Congress to Consider Raising Gas Tax to Ensure More Stable Revenue for Roads

NASHVILLE, Tenn.–Governors from both parties voiced incredulity over an impasse in Washington that has jeopardized spending on roads and bridges, calling on lawmakers to come up with the sort of long-term solution that was commonplace in less partisan times.

Some governors at their summer meeting here, both Democrats and Republicans, said Congress should consider increasing the gas tax to provide a more reliable revenue stream for the Highway Trust Fund. They also called for finding ways to ensure that electric and fuel-efficient vehicles help pay the costs of maintaining the nation's roads.

The trust fund is financed mostly by diesel and gasoline taxes that haven't increased since 1993 even as fuel economy has improved for most new vehicles, leaving the government without enough money to cover its share of spending on road repairs and highway construction. The gas tax stands at 18.4 cents a gallon and the diesel tax is 24.4 cents a gallon.

The measure with the best chance of passage at this point is legislation from House Ways and Means Committee Chairman Dave Camp (R., Mich.) that would provide funding through May 2015.

That would be the shortest patch for the fund in years–a reality that rankled governors attending the National Governors Association summer meeting.

[cpzilliacus]

Since everyone is talking about raising the gas tax, I thought this was interesting:

http://www.ijreview.com/2014/07/156660-chart-shows-big-states-tax-bite-gallon-gasoline/

It shows which states have the highest gas taxes, and also provides a breakdown of the per-gallon price.

Crude oil accounts for 67 percent of the cost of a gallon of gas. Taxes take 13 percent, and then 10 percent each for two entities in the supply chain.

Sorry, I respectfully assert that their points are not relevant. 

Even if Congress were to remove the diversion of highway user funds to mass transit and other non-highway spending (which is not going to happen in any case), the nation needs much more revenue flowing in to the state DOTs to fund highway repairs and even improvements. 

[oscar]

It's amazing that "raising the gas tax is a non-starter". The government gladly pays more for any other service, and charges for any other service, when expenses rise. Why wouldn't the gas tax rise?

You're kidding me, right?  Have you actually been asleep since 1992, when an incumbent president lost re-election because he felt it necessary to raise taxes?  NO tax increase, no matter how necessary or well founded, will even get off the ground in this political climate.  Rigid adherence to ideology trumps common sense in Washington and has for too damn long.

State governments, even ones with heavily anti-tax legislatures, have found ways to increase revenues for transportation (sometimes holding their noses to do so, as in Virginia).  It helps that they have more flexibility than the Feds to fund transportation needs, including gas taxes, tolls, private-public partnerships, general sales taxes, experimental vehicle-mile taxes, and leases of existing toll roads.  I'm not crazy about some of those options, but they are a wider range of options than the Feds have (leaving aside some of the Rube Goldberg crocks being proposed as a temporary patch for Federal gas-tax shortfalls, and of course running up the Federal deficit). 

[pctech]

"true leadership" would require informing the public that you have to pay for public services and infrastructure in some fashion.  Our current system has become totally corrupt.

[Zzonkmiles]

I love it when politicians say "when a family doesn't have enough money to pay their bills, they look for things to cut." This suggests that in Congress, the only way to resolve a budget shortfall is to cut things. Of course, "when a family doesn't have enough money to pay their bills," they also look for a second job, ask their boss for a raise, or work overtime to raise their income to help make ends meet.

I don't think any congressional representative, especially a Republican running in a strongly conservative district, is going to do anything that could result in receiving a primary challenge from an even more conservative challenger in the next election. "Big spending Congressman X voted to raise your taxes! I believe individuals know how to spend their hard-earned dollars better than the government!" That sounds great rhetorically, but it ignores the simple fact that taxes are the price we pay to live in a civilized society. No, nobody likes taxes, but I think if voters can see some tangible benefit to their taxes (like road construction), they will be more likely to resist the "tax and spend" attack.

[cpzilliacus]

I love it when politicians say "when a family doesn't have enough money to pay their bills, they look for things to cut." This suggests that in Congress, the only way to resolve a budget shortfall is to cut things. Of course, "when a family doesn't have enough money to pay their bills," they also look for a second job, ask their boss for a raise, or work overtime to raise their income to help make ends meet.

I don't think any congressional representative, especially a Republican running in a strongly conservative district, is going to do anything that could result in receiving a primary challenge from an even more conservative challenger in the next election. "Big spending Congressman X voted to raise your taxes! I believe individuals know how to spend their hard-earned dollars better than the government!" That sounds great rhetorically, but it ignores the simple fact that taxes are the price we pay to live in a civilized society. No, nobody likes taxes, but I think if voters can see some tangible benefit to their taxes (like road construction), they will be more likely to resist the "tax and spend" attack.

Wonder why none of those Republicans want to consider cutting Social Security and Medicare (and especially Medicare Part D, which is their creation) to make funding available for other things, including highways and mass transit?

[cpzilliacus]

N.Y. Times op-ed: Their Way or No Highway - This Road Work Made Possible by Underfunding Pensions

The Federal Highway Trust Fund is expected to run out of money in August. So, naturally, Congress is debating a temporary fix that involves letting corporations underfund their pension systems.

Of course, we could replenish the fund by raising the federal gasoline tax, which is its primary source of financing. That's what Senator Bob Corker, Republican of Tennessee, and Senator Christopher S. Murphy, Democrat of Connecticut, want to do. But increasing gas taxes is unpopular, so Congress hasn't done so since 1993, which means that the tax on gas has actually fallen 39 percent over the last 21 years after you adjust for inflation. Instead, Congress has used a series of gimmicks and shifts to keep the fund solvent as highway construction costs have risen.

The latest proposal, which passed the Republican-controlled House Ways and Means Committee on Thursday, works like this: If you change corporate pension funding rules to let companies set aside less money today to pay for future benefits, they will report higher taxable profits. And if they have higher taxable profits, they will pay more in taxes over the 10-year budget window that Congress uses to write laws. Those added taxes can be diverted to the Federal Highway Trust Fund.

Unfortunately, this gimmick will also result in corporations paying less in taxes in later years, when they have to make up for the pension payments they're missing now. But if it happens more than 10 years in the future, it doesn't count in Congress's method for calculating budget balance. "Fiscal responsibility,"  as popularly defined in Washington, ignores anything that happens after 2024.

[cpzilliacus]

McClatchy Washington Bureau: Obama to push road and bridge repair

With a trust fund for highway repair about to sputter out, President Obama will spend the week pushing for increased investment in infrastructure, the White House said.

Obama, who has used his executive authority to speed up permitting for priority projects, will announce futher executive actions on infrastructure this week, the White House said.

Congress this week will consider a way to avoid a lapse in funding of the Highway Trust Fund, which is now scheduled to go insolvent as early as August, and the White House said Obama "will continue to urge Republican lawmakers to not block it."

House and Senate committees last week approved plans to shore up the foundering highway trust fund through next May, though several business groups have told lawmakers they want a longer-term solution by the end of this year.

[Sykotyk]

It's amazing that "raising the gas tax is a non-starter". The government gladly pays more for any other service, and charges for any other service, when expenses rise. Why wouldn't the gas tax rise?

You're kidding me, right?  Have you actually been asleep since 1992, when an incumbent president lost re-election because he felt it necessary to raise taxes?  NO tax increase, no matter how necessary or well founded, will even get off the ground in this political climate.  Rigid adherence to ideology trumps common sense in Washington and has for too damn long.

Bush Sr lost because of "Read My Lips, No New Taxes". And then did exactly that. THAT's why he lost his reelection campaign.

You can't tell the American people you will not do something, and then propose doing that and expect not to be challenged.

[Grzrd]

Here is Jon Stewart's take on the Highway Trust Fund situation:

http://thehill.com/policy/transportation/212548-jon-stewart-tackles-highway-funding-fight

[hbelkins]

Here is Jon Stewart's take on the Highway Trust Fund situation:

http://thehill.com/policy/transportation/212548-jon-stewart-tackles-highway-funding-fight

And a comedian's opinion on the subject is relevant how, exactly?

[Grzrd]

And a comedian's opinion on the subject is relevant how, exactly?

Ask The Hill:

http://thehill.com/contact

Also, FWIW, AASHTO provided a July 18 link to the article on its website.