#AceNewsServices – UNITED STATES – June 09 – The Highway Trust Fund will be out of money in a few months, mainly because Congress insists on spending more than it takes in. To avert this supposed crisis, Republican leaders are proposing to cut Saturday deliveries of mail and use the savings to replenish the trust fund.
There’s actually a tiny grain of Constitutional sense behind this proposal. The original legal justification for federal involvement in highways, back when members of Congress actually cared about such things, was that the Constitution authorizes Congress “to establish Post Offices and post Roads.” If the “post roads” are not paying for themselves, then who better to pay for them than the post offices?
In this sense, the Republican proposal is slightly more rational than President Obama’s proposal to use the increased revenues from acorporate income tax reform that will eliminate loopholes but reduce corporate tax rates. The administration predicts reducing rates will reduce corporate tax obligations in the long run but closing loopholes will increase revenues in the short run (interesting how Obama is promising corporations lower taxes after he is out of office in exchange for higher taxes when he is still in office). Obama wants to use some of those increased revenues to supplement the Highway Trust Fund.
More than offsetting the tiny Constitutional sense of the Republican proposal is that it will take ten years of Postal Service cuts in order to cover one year’s worth of red ink from the Highway Trust Fund. In other words, the plan is far from sustainable and will simply lead to another transportation cliff in a year or so.
The reason we see these nonsensical plans is that Congress likes to pretend it has a rule that increased expenditures in one part of the federal budget must be offset by savings somewhere else. In fact, Congress has freely ignored this rule in the past–no one asked where the revenue to pay for the wars in Iraq or Afghanistan would come from–but the rule is there, so anyone proposing to replenish the trust fund must find something to offset that cost.
“The Saturday delivery change makes a lot of sense on its own,” observes the Washington Post. “So does corporate tax reform. But continuing to jury-rig the highway budget with unrelated ‘offsets’ does not.” The Post implores Congress to “develop some backbone” and “make the obvious policy choices,” which to the Post means increasing gas taxes.
But, as I’ve noted elsewhere, even increasing the gas tax is, at best, a medium-term fix. Inflation combined with more fuel-efficient cars steadily eats away at the value of this tax, which also provides little revenue for local roads and does nothing about fixing congestion, the nation’s swept-under-the-asphalt $200-billion problem. Instead, higher gas taxes will simply enable Congressional pork-outs on inane projects such as streetcars and other high-cost, low-capacity transit lines.
Instead of increasing gas taxes, my modest proposal is for Congress to stop spending more than it collects in gas taxes and other transportation revenues. Congress managed to build the Interstate Highway System, widely considered to be the largest and one of the most successful public works projects in history, entirely out of highway user fees without once ever letting the Highway Trust Fund run out of money. It did so by funding construction out of user fees on a strict, pay-as-you-go basis, which meant that if costs were underestimated, construction simply took longer rather than be rewarded with taxpayer-funded bailouts.
Read More: BY RANDAL O’TOOLE Cato