Highway Trust Fund needs a solution for the long haul
Once again, Congress needs to act -- this time to renew the Federal Highway Trust Fund, created in 1956 to help construct and fund our nation's roadways, bridges, tunnels and sidewalks. The trust fund has been a complete success, but it's about to run out of money soon if Congress fails to act.
Vermont Sen. Bernie Sanders summarized our highway challenge: "Thirty-two percent of America's major roads are in poor or mediocre condition, and 42 percent of (our) major urban highways remain congested, costing the economy an estimated $101 billion in wasted time and fuel annually."
Our nation's infrastructure needs repair. Fixing our roads and bridges should be a bipartisan affair.
Dwight Eisenhower was a young major in 1919 when he was assigned to a transcontinental Army convoy to "test vehicles and dramatize the need for improved roads." What Ike saw (at what turned out to be an average speed of 5 miles per hour) stayed with him until he was president.
In Detroit's Cadillac Square, in 1954, Eisenhower set forth his goal of an interstate highway system that "will take this nation out of its antiquated shackles of secondary roads. ... It will be a nation that is going ahead every day -- with our population increasing at five every minute, the expanding horizon is one that staggers the imagination."
Sixty years later, our nation's highway system needs repair and maintenance -- and expansion -- if we want to keep moving ahead "every day" toward Eisenhower's vision of an "expanding horizon" of potential and achievement.
According to the nonpartisan Pew Research firm, "Nearly half the states (24) received a third or more of their highway and transit funding from federal sources." The government pours over $50 billion into highway maintenance and construction yearly. It's a good deal for the states: The majority get back in federal dollars multiple times the amounts that they send.
Pew reports that Alaska gets back $7 for every dollar it contributes to the Federal Highway Trust Fund. Vermont gets $5 for every $1 sent. North Dakota and Montana get $3 for every $1. Only four states (Texas, Michigan, Indiana and South Carolina) receive less than what they send, and that is only pennies less -- from two cents to five cents less.
The nonpartisan research arm of Congress, the Congressional Budget Office, has reported to Congress that the Highway Trust Fund will run out of money if Congress doesn't act. Unfortunately, it comes as no surprise that Congress has been reluctant to provide the funds. Some of the more conservative members want to cut the federal government out of the picture altogether. They have yet to explain, though, how they propose to keep an Interstate Highway System intact with 50 state legislatures acting independently.
Federal gasoline taxes used fully fund the Highway Trust Fund. But because the federal gas tax is not pegged to inflation, its purchasing power has decreased by 48 percent. Cars with greater fuel efficiency also mean less revenue. Raising gasoline taxes -- last raised in 1993 -- is one option. Regardless, unless new forms of revenue are found, the CBO says that, starting next year, the fund will short fall -- by billions -- of what's needed.
What's worse, much, much worse, is that Congress has refused to provide long-term funding.
Another artificial crisis, another legislative traffic jam -- this time, one that may bring our federal highways to a standstill. How snarled is Congress? Some road-rage members want to make repealing Obamacare, or adding pet projects like permanent tax breaks for the rich, a condition for funding. Sigh.
It's so bad that Speaker John Boehner wasn't able to bring his own highway bill to a vote. He almost needs personal ambassadors to House Tea Party members because they behave like a foreign nation within their own party. The "solution" has been a series of short-term funding deals.
Boehner opposes short-term fixes. But this is an instance where the tail wags the dog, and he has had to capitulate to still another Band-Aid fix just to stave off disaster. Thousands of jobs may be at stake. Short-term fixes hurt because they force states to abandon long-term planning; because of the uncertainty of funding, they can't sign long-term contracts.
Boehner's latest proposal takes the nation only to next May. Even so, the revenue will come at the expense of employee pension plans. Companies can delay paying into the plans, which will increase their profits, and their revenue to the Treasury.
In the meantime, the Chamber of Commerce and labor unions have joined together to plead for longer-term action. And seven nonpartisan, state-level organizations have sent Congress a joint letter pleading for a long-term solution. These are: the National Governor's Association, the National Conference of State Legislatures, The Council of State Governments, the National Association of Counties, the National League of Cities, The U.S. Conference of Mayors, and the International City/County Management Association.
With such strong bipartisan support, this is clearly something Congress can and must do before its members leave Washington for their summer vacations.
© 2014, Universal Uclick