Wednesday, February 15, 2012

Conservative Action Project Memo: A Transportation Bill should not be used as an Opportunity to Increase Federal Spending

RE: The next transportation reauthorization is shaping up to be yet another big spending boondoggle. Despite four straight trillion dollar annual deficits, Congress refuses to accept the need to budget responsibly and prioritize transportation spending.

Instead, both the House (H.R.7) and Senate (S.1813) are working on bills that will almost certainly require yet another bailout of the Highway Trust Fund, costing taxpayers tens of billions of dollars. It is unacceptable to exceed Highway Trust Fund revenues by relying on budget gimmicks, fee diversions and unknown future revenues. Any transportation bill passed by Congress should focus on containing costs, reducing federal burdens and turning transportation policy, planning and funding back to the states.

ISSUE IN BRIEF: The 2005 highway bill – dubbed SAFETEA-LU – was larded with earmarks, dramatically increased spending and continued the centralization of control. It was rightly seen as a symbol of how Republicans in Washington had lost their way; and by 2006, many Americans saw no discernable difference between Washington Republicans and Washington Democrats. The current debate is an opportunity for Congress to demonstrate to the American people that they heard the message sent by the American people in 2010.

The facts on the Highway Trust Fund:

• According to the Congressional Research Service (CRS), “The financial estimates associated with [the 2005 transportation bill] SAFETEA have proved to be overly optimistic. The highway account has already required three transfers from the general fund totaling $29.7 billion…” A general fund bailout results in an increased burden on taxpayers and an increase in our nation’s debt.

• The Highway Trust Fund (HTF) is funded through various taxes, most notably the federal gas tax, and is projected to take in an average of $38.6 billion per year over the next five years, or $193.2 billion. Any spending above that would require an additional revenue stream or a general fund bailout.

• The CRS also notes, “Using any of these, however, would weaken the claim that road users pay the cost of the federal highway program.” Breaking this link would weaken the ability of small-government conservatives to keep transportation spending in check.

• There is an estimated $15.6 billion of unspent funds the Highway Trust Fund (HTF) that House and Senate drafters rely on to close their funding gap. The use of those funds to offset massive spending should be viewed as typical “Washington bookkeeping.”
No earmarks, but….

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