Earlier today, Barack Obama decried the gridlock that has prevented Congress from passing a long-term surface transportation bill (highway bill) as unacceptable and inexcusable. He also asserted that we must formulate a policy in which funding would be directed to those districts that need it the most, instead of politically motivated pork, such as the bridge to nowhere (which he supported in the Senate). Well, unknowingly, Obama has made a strong case for transferring surface transportation funding, and its accompanying revenue source; the gasoline tax, back to the states.
The Highway Trust Fund was established in 1956 to fund the Interstate Highway System. The fund, which is administered by the DOT’s Federal Highway Administration, has been purveyed by the federal gasoline tax, which now stands at 18.4 cents per gallon (24.4 for diesel fuel). Beginning in 1983, Congress began siphoning off some of the gas tax revenue for the great liberal sacred cow; the urban mass transit system. Today, mass transit receives $10.2 billion in annual appropriations. Additionally, funding is misallocated for all sorts of local pork projects, such as bike paths and roadside flowers.
This inevitable cycle of federal government mission creep has led to the depletion of the Highway Trust Fund in recent years. Much like the so-called Social Security Trust Fund, Congress is forced to fund its assortment of profligate and superfluous transportation projects with general fund revenues because gasoline tax revenues are insufficient. In 2008, the trust fund was completely depleted, impelling Congress to replenish the fund with an additional $35 billion over the past few years.
Despite the fact that the Interstate Highway System was completed in 1992, the federal government continues to control surface transportation, spending more extravagantly every few years. Historically, highway funding has been allocated in 6-year surface transportation bills. This has allowed states to plan more efficiently, and prioritize their road projects over the long-term. The last surface transportation bill expired September 30, 2009, when Democrats controlled all branches of government. Instead of responsibly passing another long-term highway bill, they passed several short-term extensions, locking in the grandiose $50 billion in annual transportation spending. Republicans proposed a more austere 6-year bill as soon as they assumed control of the House, yet Obama and the Democrats have held it hostage. They passed another short-term stopgap bill, set to expire on September 30. Accordingly, Obama might want to look in the mirror and say “unacceptable and inexcusable.”
In addition to engendering a culture of waste, corruption, and incompetence, Democrats’ short-term extravagant ditch-digging money bombs, in conjunction with the Stimulus bill, have spawned superfluous road-paving projects. I just traveled extensively along the Richmond-Boston I-95 corridor, and it’s not a pretty scene. Frankly, it’s hard to ascertain the purpose of most of the construction projects, other than to create unbearable traffic juggernauts. In their alacrity to gobble up the short-term money before it runs out, state and local governments tend to use the funds on small time and indivisible projects, such as incessant road repaving, instead of better planned long-term projects.
All of this inefficiency in transportation spending should provide Congress with the motivation to let the federal gasoline tax expire at the end of September, along with the Federal Highway Administration. All responsibility for state road projects should be directed back to the states, so they can decide how much revenue in tolls and gas taxes are required to support their needs. Let local citizens decide what they deem as transportation necessities. The federal government should focus on vital maintenance of the Interstate Highway System and emergency transportation assistance. Without the federal government’s monopoly over road construction, states will be able to partner with private companies to create private-sector solutions to transportation problems. A federalist solution to transportation was one of Reagan’s pet projects in 1983. Unfortunately, as was the case with most of his proposals, he was rebuffed by Congress.
Not surprisingly, instead of following his own advice, Obama is doubling down on his failed policies. He said, “we need to reform the way transportation money is invested. “We need to stop funding projects based on who’s district there in and instead fund them based on how much good they’re going to do. No more bridges to nowhere.” Yet, instead of fostering such innovative and non-pork investments through the states, Obama is proposing a massive $556 billion federal transportation bill, twice the cost of the previous most expensive bill. He is also proposing an increase in the federal gasoline tax, at the behest of an unholy alliance between Richard Trumka and the Chamber of Commerce.
In Obama’s unicorn world, doubling-down on the same maladroit policies, which failed to create jobs, and prolonged the recession, is considered innovation.
Obama, Big Labor, and even the Chamber, will never reform their failed ways. However, congressional Republican can. They must rise to the challenge and abolish the federal gas tax in favor of a federalist solution. With so much new-found Reagan nostalgia on the part of Obama, maybe he’ll even go along with it. Not!