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Republican irresponsibility on transportation funding
The House and Senate recently passed a three-month extension for federal transportation funding because they are at an impasse on a longer-term bill.
The House wants to negotiate corporate income tax reform with the White House and use the tax proceeds from repatriated overseas profits to underwrite transportation funding. The Senate passed a hodgepodge of supplemental measures to boost the transportation funding pot.
These are both terrible ideas. Instead, the role of the federal government in transportation should be reduced, if not extinguished.
Transportation is, for the most part, a local matter. The federal government got into the business to build a network of highways that connected states and knitted the nation together.
There is a federal gas tax of 18.3 cents a gallon. It raises nearly $40 billion a year. Congress, however, authorizes annual transportation expenditures of over $50 billion a year. Virtually the entire difference is spending for mass transit.
A federal role can be justified for highways that connect states and knit the country together. But why should the federal government be involved in paying for the public transportation systems in Cincinnati, Orlando or Phoenix?
What’s the point of pooling money together at the national level to dole back out to local communities through a complicated grant competition? Why not let every community decide for itself what kind of public transportation system it wants and how to pay for it?
The federal gas tax, despite plateauing due to fuel efficiency, produces enough money to maintain the federal interstate system. The federal role in transportation should be limited to that.
Or, alternatively, get the federal government out of the business of transportation entirely. Abolish the federal gas tax and leave maintaining the federal interstate system to the states. They have sufficient incentive to preserve interconnectivity.
The finances of the federal government are a mess. Fixing them will require reducing what the federal government does. Transportation is a sensible place to do that.
Republicans are supposedly in favor of a smaller federal government and restoring the balance between federal, state and local responsibilities and roles. Yet, on transportation, the Republican-controlled Congress is pushing for more, not less.
The Senate bill in particular violates fiscal principles Republicans supposedly embrace.
To increase transportation funding beyond what the gas tax brings in, the Senate bill uses a Rube Goldberg financing scheme. Spending is authorized for six years. Supplemental funding offsets are claimed from an array of sources – from tightening up estate taxes to selling oil from the Strategic Petroleum Reserve – over the course of 10 years.
But all of those savings and additional revenues accruing over 10 years are spent in the first three years. The remaining three years of authorized spending is left unfunded.
There’s a term for this: fiscal irresponsibility.
The House approach isn’t really better. Paying for an increase in transportation funding with one-off tax revenues from repatriated profits isn’t responsible either.
The responsible path would be reducing the federal government’s role in transportation to what the existing gas tax can support. Which can be done by eliminating the federal role in mass transit.
The federal government still owes over $18 trillion. The annual federal deficit is still more than $450 billion. The interest payments on the federal debt will skyrocket over this decade.
If there are savings or revenues to be had -- from tightening up estate taxes, selling oil, or inducing the repatriation of profits – they should be devoted to reducing debt and deficits, not to perpetuating federal transportation spending at unsustainable levels.
If Republicans are truly the party of smaller government, they need to take advantage of the opportunities as they present themselves. Let the Export-Import Bank stay dead. Limit federal transportation spending to what the gas tax will support.
Reach Robb at email@example.com.