The Highway Bill

Nov 13 2015

Next week Senate and House conferees will begin meeting to hash out the differences between the two chambers’ highway bills. Unfortunately, the expected result will likely be a travesty of both policy and process.
The Senate’s Developing a Reliable and Innovative Vision for the Economy Act (DRIVE Act), passed in July of this year, promises six years of highway spending, but only manages to pay for the first three. And it does so not with structural reforms that produce real savings, but with budgetary gimmicks, including the selling of a portion of the United States’ Strategic Petroleum Reserve, on the assumption that oil prices will increase from $50 per barrel, where they are today, to $89 per barrel.
The House’s Surface Transportation Reauthorization and Reform Act is no better. Like the Senate bill, the House legislation pays for only three of the six years of highway funding it authorizes, using similarly misleading budget trickery with the Strategic Petroleum Reserve. It would also redirect Federal Reserve payments that are supposed to go to the Treasury’s general fund, in order to help patch up the perennial gaps in highway funding. Former Fed Chairman Ben Bernanke described this kind of rearranging of the Highway Trust Fund deck chairs as a “budgetary sleight of hand,” pointing out that “paying for highway spending with Fed capital is not paying for it at all in any economically meaningful sense.”
Worse, neither bill takes any steps to reform our nation’s broken infrastructure financing system. Under both of these bills, and their likely conference report, the Highway Trust Fund will still be on a fast-track to bankruptcy. Gas taxes collected at the pump will still be diverted away from projects that could fix our nation’s roads, bridges, and highways. And states will still be forced to comply with costly federal labor and environmental regulations that only delay and drive up the costs of critical infrastructure projects.
Congress can do better than this. We should not be authorizing six years of spending while only paying for the first three. We should not be using phony pay-fors to artificially prop up a failed infrastructure financing system.
The House is under new leadership. The White House will soon be too. There’s no reason we need to wait for this highway bill’s authorization to expire in order to pass real transportation infrastructure financing reform.