I rise in opposition to the highway spending bill before us today – and not just the failed and corrupt substance of the legislation.
I rise to oppose the bill’s irresponsible and unsustainable funding mechanisms and the cynical process that produced it.
We are told that this bill fully funds federal highway spending for the next five years, and that it won’t add a single dime to the federal deficit. The math may add up on paper, but does anyone really think the pay-fors in this bill are honest, responsible ways to fund a government program?
Let’s look at a few examples.
Of the $70 billion this bill uses to bailout the Highway Trust Fund over the next five years, more than $50 billion comes from an accounting gimmick that steals money from the rest of the Treasury’s general fund.
Here’s how the shell game works. Normally, the Federal Reserve sends the profits from its portfolio of assets directly to the Treasury. These surplus profits are actually one of the major reasons our federal budget deficits have fallen in recent years.
However, this bill would siphon off that money and redirect it into the Highway Trust Fund. Just this week, Federal Reserve Chair, Janet Yellen, testified before the Joint Economic Committee, where she commented on this provision. She said, [QUOTE]
“This concerns me, I think financing federal fiscal spending by tapping resources at the Federal Reserve sets bad precedent and impinges on the independence of the central bank; it weakens fiscal discipline, and I would point out that repurposing the Federal Reserve’s capital surplus doesn’t actually create any new money for the federal government.”
And that’s not the only funding gimmick found in this legislation. It also purports to raises $6.2 billion in revenue for transportation and infrastructure projects by selling oil from the Strategic Petroleum Reserve.
Let’s leave aside, for a second, that the Strategic Petroleum Reserve was never intended to be a piggy bank for congressional appropriators. What makes this pay-for particularly objectionable is that its authors assume they can get $93 for a barrel of oil when it is currently selling for less than $40 per barrel.
If we’re going to start selling federal assets at fantasy prices, there is no limit to the number of things we can pretend to pay for.
But as bad as the bill’s funding schemes are, the cynical process used to secure votes in its favor is far more troubling.
For instance, this bill adds back $3.5 billion in crop-subsidy spending that we cut just last week in the budget deal. Is this really how we do business in the United States Senate? Reduce spending one week in order to appear fiscally responsible, only to reverse course the very next week when nobody is expecting it? You don’t need to oppose crop subsidies to see the dishonesty and cynicism of this maneuver.
Even worse, this bill would never had a chance of passing the Senate were it not for a deal to include a renewal of the Export-Import Bank.
I have spoken out against the Export-Import Bank many times before, so there’s little need to revisit the mountain of evidence proving that it is one of the most egregious, indefensible cases of crony capitalism in Washington, D.C.
But it is worth highlighting some of the so-called “reforms” that Ex-Im’s supporters included in the bill.
First, there’s the new “Office of Ethics” created within the Bank. Presumably this is supposed to help the Bank’s management reduce the rate at which Ex-Im employees and beneficiaries are indicted for fraud, bribery, and other wrongdoings. Since 2009, there have been 85 such indictments – or about 14 per year.
The bill also creates a new position – called the “Chief Risk Officer” – and requires the Bank to go through an independent audit of its portfolio.
Only in Washington will you find people who believe that an organization’s systemic ethical failings can be overcome by creating a new “ethics” bureaucracy… or that hiring a new a risk-management bureaucrat is a suitable replacement for market discipline… or that giving another multi-million-dollar contract to a well connected accounting firm will substitute for real political accountability.
None of these bogus “reforms” will make an ounce of difference. None of them change the essential purpose of the Export-Import Bank, which is to use taxpayer money to subsidize wealthy, politically connected businesses.
Finally, Mr. President, it must be stressed that this bill does nothing to fix our fundamentally broken highway financing system.
After this legislation is enacted, the Highway Trust Fund will still spend more money than the federal gas tax brings in. And after this series of fraudulent pay-fors are exhausted in just five years, we will be right back to where we’ve been for the past decade: trying to find enough money for another bailout without attracting too much attention from the American people.
And let’s not forget that the states are big losers under the status quo system too.
Federal bureaucrats divert at least 25 percent of state gas tax dollars to non-highway projects, including mass transit, bike paths, and other boondoggles like “vegetation management.” Federal Davis Bacon price-fixing regulations then artificially inflate construction costs by at least 10 percent. And federal environmental regulations, like those issued under the National Environmental Policy Act, add an average of 6.1 years in planning delays to any federally funded project.
I understand that Washington is not ready for a more conservative approach to infrastructure funding yet. One where states get to keep their transportation dollars and decide how and on what they will spend those dollars, free from interference by federal regulators.
We can have honest disagreements over policy and I know there’s more work to do in making the case for conservative transportation reform.
But what I refuse to accept is the corrupt process that produced this bill. The backroom deals, the about-face on crop subsidies and the Export-Import Bank.
The American people deserve better than this. And I won’t stop fighting to ensure that we will do better than this in the future.