02.14.2012 0

A Transportation Bill should not be used as an Opportunity to Increase Federal Spending

MEMO FOR THE MOVEMENT: A Transportation Bill should not be used as an Opportunity to Increase Federal Spending

RE: The next transportation reauthorization is shaping up to be yet another big spending boondoggle. Despite four straight trillion dollar annual deficits, Congress refuses to accept the need to budget responsibly and prioritize transportation spending. Instead, both the House (H.R.7) and Senate (S.1813) are working on bills that will almost certainly require yet another bailout of the Highway Trust Fund, costing taxpayers tens of billions of dollars. It is unacceptable to exceed Highway Trust Fund revenues by relying on budget gimmicks, fee diversions and unknown future revenues. Any transportation bill passed by Congress should focus on containing costs, reducing federal burdens and turning transportation policy, planning and funding back to the states.

ISSUE IN BRIEF: The 2005 highway bill – dubbed SAFETEA-LU – was larded with earmarks, dramatically increased spending and continued the centralization of control. It was rightly seen as a symbol of how Republicans in Washington had lost their way; and by 2006, many Americans saw no discernable difference between Washington Republicans and Washington Democrats. The current debate is an opportunity for Congress to demonstrate to the American people that they heard the message sent by the American people in 2010.

The facts on the Highway Trust Fund:

According to the Congressional Research Service (CRS), “The financial estimates associated with [the 2005 transportation bill] SAFETEA have proved to be overly optimistic. The highway account has already required three transfers from the general fund totaling $29.7 billion…” A general fund bailout results in an increased burden on taxpayers and an increase in our nation’s debt.

The Highway Trust Fund (HTF) is funded through various taxes, most notably the federal gas tax, and is projected to take in an average of $38.6 billion per year over the next five years, or $193.2 billion. Any spending above that would require an additional revenue stream or a general fund bailout.

The CRS also notes, “Using any of these, however, would weaken the claim that road users pay the cost of the federal highway program.” Breaking this link would weaken the ability of small-government conservatives to keep transportation spending in check.

There is an estimated $15.6 billion of unspent funds the Highway Trust Fund (HTF) that House and Senate drafters rely on to close their funding gap. The use of those funds to offset massive spending should be viewed as typical “Washington bookkeeping.”

No earmarks, but….

While neither the House nor Senate bill contain any earmarks, they are extremely problematic from a spending standpoint and neither goes far enough toward turning back authority to the states.

The House bill – American Energy and Infrastructure Jobs Act of 2012 (H.R.7) – would authorize $262.8 billion over five years, or $52.6 billion per year. Over the next five years, outlays would outpace revenues by $69.6 billion.

Seven months ago, House Transportation and Infrastructure Committee Chairman John Mica (R-FL) unveiled a six-year, $230 billion proposal. At $38.3 billion per year, that proposal would have stayed within HTF.

Even using the unspent HTF money, the House bill would require what amounts to a $54 billion bailout. At least on paper, the inclusion of future energy revenues (spend now, offset later) and various other fee diversions will make up the difference. Conservatives and taxpayers are right to be skeptical.

The Senate bill – Moving Ahead for Progress in the 21st Century Act (S.1813) – would authorize $109 billion over two years, or $54.5 billion per year. Over the next two years, outlays would outpace revenues by $33.3 billion.

Even using the unspent HTF money, the Senate bill would require what amounts to a $17.7 billion bailout. At least on paper, the inclusion of various tax increases and fee diversions will make up the difference. Tax increases are undesirable, and conservatives and taxpayers are right to be skeptical.

Why Conservatives Should Be Opposed:

Conservatives should be opposed to both the House and Senate bills because of the excessive spending alone. The new revenues – whether via energy production or tax increases on IRAs – take us in the wrong direction. Anything short of reining in excess spending sends the wrong message to Americans, who overwhelmingly believe Washington spends far too much.

Overspending on transportation will cause a significant ripple effect in the conservative agenda. Not only does the House bill ignore the priorities put forth in the Ryan Budget, which they adopted last year, but it would also create problems for the drafting of this year’s budget.

Finally, given the construction of the interstate highway system was completed in the early eighties, it is time to focus on turning back transportation policy, planning and funding to the states. Local lawmakers – not those in Washington – are best suited to address transportation priorities such as increased mobility, safety, and congestion relief.

For Additional Information on the Transportation Reauthorization, please visit the following links:

http://heritageaction.com/2012/02/flashback-mica%E2%80%99s-july-transportation-proposal/

http://www.redstate.com/erick/2012/02/09/house-conservatives-support-barack-obamas-latest-stimulus

http://www.heritage.org/research/reports/2012/02/transportation-program-reauthorization-another-big-spending-problem

http://www.redstate.com/russvought/2012/01/30/house-conservatives-need-to-block-the-coming-highway-bailout/

http://www.nationalreview.com/articles/290427/highway-robbery-republicans-michael-tanner

http://townhall.com/columnists/danholler/2012/02/06/big_dollars_for_transportation/

http://www.nationalreview.com/articles/289905/big-government-republicans-andrew-c-mccarthy

http://heritageaction.com/2012/02/house-transportation-bill-falls-short/

http://www.heritage.org/research/reports/2012/02/turn-back-transportation-to-the-states

http://blog.heritage.org/2012/02/08/senate-chairmans-mark-and-transportation-bill-off-target/

http://heritageaction.com/2012/02/a-54-billion-bailout/