Not funding the federal program that supports road, bridge, and transit work would jeopardize more than 140,000 projects and hundreds of thousands of jobs.
Last weekend, President Obama used his latest radio address to try to preempt an upcoming political battle over the extension of a transportation bill that uses borrowed taxpayer funds to repair roads and bridges instead of fixing the bankrupt Highway Trust Fund. The taxes that only partially cover the cost of the Highway Trust Fund expire on 30 September.
In the Administration’s view, allowing this partial funding to expire would be “disastrous for our nation’s economy, costing nearly one million construction workers their jobs over the next year, furloughing 4,000 transportation professionals, and losing almost $1 billion in revenue after the first ten days alone.”
Left out from the speech was the fact that it was the failure of politicians – starting with President Obama and his Secretary of Transportation, Ray LaHood – to act on the bankrupt Highway Trust Fund issue two years ago – in effect kicking the problem down to what now appears to be a dead end road.
In a speech that critics described as the latest attempt by the Administration to use words in place of leadership, Obama said, “There’s no reason to put more jobs at risk in an industry that has been one of the hardest-hit in this recession. There’s no reason to cut off funding for transportation projects at a time when so many of our roads are congested; so many of our bridges are in need of repair; and so many businesses are feeling the cost of delays.”
Nice rhetorical try.
This is nothing more than business as usual in an increasingly out of touch Washington. The looming crisis could have been avoided if politicians had the will to solve the core problem: The Highway Trust Fund is bankrupt because the minimal fuel tax (18.4 cents per gallon of gasoline, 24.4 cents per gallon of diesel – and dropping because of inflation) paid into to it by users is insufficient to keep up with the spending needed to keep commerce moving on the nation’s highways.
As it stands now, our country needs to invest about $2.2 trillion through 2014 just to maintain our national infrastructure in a state of repair, according to an American Society of Civil Engineers Report issued when the President assumed power.
This means the existing Highway Trust Fund would need about $231 billion in additional revenue over the six-year period to fully pay for the proposed programs, according to Obama’s 2012 budget – and that’s if you believe his rosy economic projections, which are already being scaled back as the U.S. slides back into a recession.
But don’t look for the leadership from either party to propose how they will pay for this. For years the U.S. Congress has refused to raise transportation funding through the increased user fees that are needed.
As always, the question of increasing taxes revolves around who pays and who benefits. To fix the Highway Trust Fund, Federal gasoline taxes will likely need to double, at least, from the current level using any honest accounting principles. People are driving less as the Great Recession continues and fuel prices soar; The vehicles they are driving are increasingly more fuel efficient because of Federal regualations. The declining value of the dollar (in part from printing so many of them and borrowing so much from the Communist Chinese) also buys less highway maintenance and repair with each passing year upon passing year of political impotence.
“The Administration inherited a difficult problem — a system that can no longer pay for itself. There simply is not enough money in the Highway Trust Fund to do what we need to do,” said Secretary of Transportation Ray LaHood back in 2009 when the Obama Administration punted the problem down the road by authorizing only short term funding – instead of replacing the long term bill that expired then – in the hopes that voters would have short term memories when the problem arose again.
Worse, Minnesota Democrat James Oberstar’s sweeping bill to reform transportation policy and fix the bankrupt Highway Trust Fund was blocked by the Obama Administration two years ago because it raised taxes on the people who use the highways. (And – don’t forget – Oberstar was subsequently fired by voters in the 2010 mid-term elections after 18 terms on the taxpayer dole because he was viewed – rightly or wrongly – as just another tax and spendthrift politician.) The rhetorical trick of blaming the previously incompetent Republican Administration has lost its allure among voters according to opinion polls.
And now what is the Administration going to do? Impose new taxes to solve the problem during the run-up to the 2012 election? Heck no, bet on the snowball traversing unscathed the nether regions of Hades before that comes about.
And the Republicans? Well, their position as the “party of Nope” on any taxes seems as clear as it is wrong headed. The head of the House Transportation and Infrastructure Committee, Rep. John L. Mica (R-FL), has said that even a level-funding bill will exhaust by 2013 the Highway Trust Fund supported by existing fuel taxes unless additional revenue is found.
So where’s the money coming from? Talk or political posturing doesn’t pour any concrete. (See also DOT Announces $417.3 Million in Grants for Highway Projects, Senate Dithers as Highway Trust Fund Goes Broke)
