House Transportation Rule is Waste Buster

from The Foundry: Conservative Policy News. by Ronald Utt


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.

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