Passing the Highway Transportation Bill (National Highway Reauthorization Act) is an even more urgent Congressional priority following the May Jobs Report.
It would be irresponsible of Congressional leaders of either party to allow the existing bill to expire at the end of June.
There is a lot to like in the Senate version of the bill that reauthorizes the Highway Trust Fund through 2014.
The House version would extend the Highway Transportation Act by 5 years.
A problem common to both bills is Congress’s perpetual desire to spend much more money on many more programs than the Highway Trust Fund can afford.
The Trust Fund, itself, generates only about $25B a year from an excise tax included in the price of every gallon of fuel purchased in the US
- 18.5 cents a gallon on gasoline
- and a little over 24 cents a gallon of diesel.
Even the modest $109B Senate program exceeds the available funding by more than 100%.
- The Senate would make up the difference by borrowing – ostensibly from the General Fund – i.e. the same one that is already has a projected $1T deficit for the current fiscal year and, also
- From Chartering a Public/Private Infrastructure Bank –
The House proposes a $256B program — largely funded from (still unproven) future Arctic oil and gas leases and royalties — in other words, by gambling “on the come”!
There is another way.
- The federal fuel tax rates have not been increased since the early 1990s and
- The Trust Fund has shrunk as a result of dwindling revenue from successive administrations’ efforts to reduce gasoline consumption through
- improved fuel economy standards
- alternative fuel cars and trucks and
- adoption of mass transit systems.
- Raising the Federal Fuel tax by 10 cents a gallon would produce an estimated $20B a year in revenue to close the funding gap in the Senate Bill to a mere $29B –
- That gap could, arguably, be bridged by chartering the Infrastructure Bank?
The result would be growth of the overall economy by adding or maintaining at least a half million good paying jobs throughout the construction industry and more in related manufacturing sectors.
- Without adding to the national debt –
The challenge is to Congress to come to grips with reality.