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  • House Transportation Rule is Waste Buster

    The House Republicans will soon debate and vote on a series of changes in the rules that govern how the House operates during the 112th Congress. Some of these rules are designed to facilitate the goal of greater spending restraint and, as a consequence, are being vigorously opposed by the trade associations whose members benefit from federal spending.

    In particular, proposed amendments to Rule XXI—which addresses the federal highway program—would amend the existing rule that was put in place earlier to guarantee full funding of the infamous SAFETEA-LU, a piece of legislation passed in 2005 that set a record for earmarks and included the “bridge to nowhere.”

    Under the proposed change, highway and transit funding would no longer have that guarantee and could be reduced by Congress, including if trust fund revenues fall below authorized spending levels. At the same time, the new rule would continue to protect trust fund revenues from being diverted to non-transportation programs.

    As such, highway spending would now be subject to the same budgetary treatment as other discretionary federal spending programs, including homeland security, public health, education and national defense. It is this reversion to the equality of budget process—and the loss of privileges that elevate such things as the repair of historic covered bridges, Atlanta trolley cars, roadside flower gardens, and hiking paths above food inspection and flood control and many similar programs—that so irritates the trade associations hired to preserve this privilege. Indeed, in their joint letter to House leadership, the trade associations argue that the change will “make annual federal highway and transit investments subject to the whims of the appropriations process.” So? What makes the highway program special in comparison to other core responsibilities of government?

    The trade association letter also hints that highway spending will be cut to increase spending elsewhere (homeland security?), but the new rule forbids trust fund money from being diverted elsewhere. The signatories of the letter know this, of course, but their reason for making this claim stems from the longstanding myth that highway spending has often been curtailed to generate trust fund surpluses that, in turn, allow for more spending elsewhere without increasing the overall budget deficit.

    There is scant evidence to support this assertion: The trust fund surplus hit the $10 billion range in 1974 and bounced around that level until 1997. It soared to $20 billion in 1999 due to the 4.3 cents per gallon federal gas tax that was shifted from deficit reduction to the trust fund in 1998, and trust fund spending had not yet caught up with the revenue bonanza. But it soon did, and the surplus quickly fell, falling to historical levels by 2003.

    Sadly, other lobbying groups will likely try to undermine the new Congress’s efforts to restrain spending by mimicking the actions of the highway trade associations. All will agree, of course, that deficit reduction is paramount and that they support it in general. But all want Congress to recognize that their clients and members are special and should be exempt from any sacrifice and that such sacrifice should instead fall on others. To paraphrase the popular tax policy dictum of the late Senator Russell Long: Don’t cut you. Don’t cut me. Cut that fellow behind the tree.

    Posted in Ongoing Priorities [slideshow_deploy]

    11 Responses to House Transportation Rule is Waste Buster

    1. LibertyAtStake, Alex says:

      "…a piece of legislation passed in 2005 that …"

      That would be the Hastert/DeLay, et. al. "RINOs run wild" House, wouldn't it? Let's not forget how all that worked out – great for Soros, Inc. and its subsidiary Progressives, USA.

      Make this rule change happen Boehner/Cantor, et. al.

      http://libertyatstake.blogspot.com
      "Because the Only Good Progressive is a Failed Progressive"

    2. Gabriel Roth, Chevy says:

      The proposed rule change is not good enough, as "Transportation" is a code word for High-Speed Rail and mass transit. A cost-conscious congress would spend Highway Trust Fund (HTF) monies only for highways, as was originally intended when the HTF was established. Why should federal taxpayers pay for other people's transit?

    3. jerry schneider, sal says:

      What about transit funding for New Starts and Small Starts – this is all about highways

      Why is it that cost-ineffective transit projects are apparently not included?

    4. Janet Kavinoky, Wash says:

      The U.S. Chamber supports federal investment in highways and transit. I respectfully disagree with Mr. Utt's comments (and would challenge the correctness of many of them). In short, we oppose the Republican Leadership's proposed rule — and support Congressman LaTourette's amendment and here's why.

      The Proposed Change is…

      1. Bad Policy: Funding guarantees — enacted in TEA-21 (not in SAFETEA-LU as the author states) — should be maintained.

      When they aren't, two things can happen: first, the trust with users is broken because the receipts are not being used as they are allowed by law (and yes, transit is a valid use of federal funding when it comes to reducing congestion and providing mobility), and second, there is an opportunity to cut the excess contract authority in order to provide budget authority elsewhere in the federal budget. So the proposed rule does not protect the HTF, nor does it keep highway and transit resources from being used in other ways.

      2. In the Wrong Place. Yes, it is worth debating what should and should not be prioritized and funded by the Federal government. But that's what an authorization process is for — not the House rules or appropriations bills.

      What's most important — especially when it comes to debating things like high speed passenger rail that have nothing to do with this rules debate — is for Congress to act quickly to develop a successor to current highway and transit law, SAFETEA-LU. If Members want to make cuts to specific programs, narrow the Federal role, or even reduce overall funding levels, debate it in that arena. Not this one.

      2. At the Wrong Time: Policy debates don't exist in a vacuum. Exposing businesses, employees, states and communities to the uncertainty this proposed rule creates is never good, but now it's especially bad.

      • Construction unemployment is at 18.8%. Introducing uncertainty into federal investment, which accounts for about 45% of total highway investment nationally, will put more people out of work.

      • Uncertain federal funding undermines state and local transportation planning processes. In fact, this rule change contradicts existing requirements for state and metropolitan multi-year planning and matching fund commitments.

      • As a result, states and communities can’t make commitments to major multi-year capital investments like critical bridge replacement, Interstate Highway System reconstruction, highway and transit capacity expansion, and technologies that make transportation systems work better.

      • Investments in safety and economic infrastructure will be set aside.

      • This rule promotes cutting already insufficient federal resources for projects critical to U.S. exports competitiveness, economic development, safety and quality of life.

      • The short-sightedness of this change will hamper long-run economic growth, as proven by the Chamber's Transportation Performance Index.

      Make no mistake, the Chamber supports fiscal responsibility, living within our means, and program reform when it comes to highways and transit. But this rule change is the Wrong Policy, in the Wrong Place, at the Wrong Time.

      The proposed rule change should not stand: the Republican Conference should vote for the LaTourette amendment.

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    8. Some Understanding, says:

      In response to Gabriel Roth's question…Why should federal taxpayers pay for other people’s transit?

      Why not, since they are already paying for other people's roads!

    9. Gabriel Roth, Chevy says:

      Florida -

      The Highway Trust Fund was an attempt to apply the “user pays” principle to funding a nation-wide road system at a time when surcharging fuel was the best way to charge for road use. Nowadays direct charging by services such as E-Z Pass are widely available.

      Transit users can pay cash for individual or multiple journeys. However, those in the US have shown themselves unwilling to pay more than a fraction of the costs.

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