Congress will take center stage for the next couple of weeks as the spotlight recedes from the presidential primary process. The opening act is a tragedy about a party drifting away from its small government roots. Instead of using yet another-trillion dollar annual deficit as a rallying cry to cut spending, the House and Senate actually proposed to continue big dollar transportation spending.
Last week, House Republican leaders attempted to make the case that their bill “fits squarely within conservative ideology.” As evidence, they noted the bills numerous programmatic reforms, additional state flexibility and provisions that would open more domestic energy production. And while the bill does indeed include some important reforms, its $260 billion price tag is hard to swallow for conservatives.
It is instructive to look back at what the 2011 House-passed budget said and did with regard to transportation spending. The budget plan, authored by Congressman Paul Ryan (R-WI), observed, “Since 2008, funding for the Department of Transportation has grown by 24 percent – and that doesn’t count the stimulus spike, which nearly doubled transportation spending in one year.”
The Ryan Budget “anticipate[d] that Congress can keep the Highway Trust Fund solvent without additional general fund transfers or increases in the gasoline tax by consolidating dozens of separate highway programs that GAO has identified as duplicative.”
That is an excellent principle – solvency through reform, not revenue – and 235 House Republicans voted in favor of it last year. One way to spend those existing dollars more frugally is to streamline the approval process, increase state flexibility and reduce federal mandates. While most conservatives would prefer to see the entire system turned back to the states, few could argue with this “solvency through reform” approach as an interim step.
Unfortunately, the current transportation bill walks away from the core principle outlined last year by the Ryan budget; instead, the $260 billion proposal would lump additional funding on top of much needed reforms.
Perhaps even more disconcerting is that the move comes on the heels of a large jump in federal gas tax revenues. Last year, the 18.4 cent per gallon federal gas tax brought in $29 billion. This year, the Congressional Budget Office (CBO) predicts revenues will reach $36 billion. They explain that most of the 24% increase in revenue “is attributable to the expiration of tax credits for ethanol-blended fuels” and revenues would grow slowly in the years to come.
Over the next five years, the federal government would collect $187 billion in gas tax revenue. That pales in comparison to the new obligations put forth by the House transportation bill.
Absent a new stream of revenue, which is not what House Republicans adopted last year in the Ryan Budget, we are headed for more bailouts. Not that bailing out the Highway Trust Fund is a new phenomenon: $8 billion in 2008; $7 billion in $2009; $19.5 billion 2010; and we’re heading for another at the end of this year.
It is unclear if revenue from future energy exploration will close the gap, and even proponents of increased energy exploration and transportation funding have their doubts. Senator Jim Inhofe (R-OK) said that the new revenue “won’t fund everything.” Congressman Don Young (R-AK), a proud proponent of the “Bridge to Nowhere,” said, “There’s a group of congressmen that think there’s going to be a magic wand to create funds.”
Heritage Action’s CEO Michael Needham explained that using future (and undetermined) revenues from new energy exploration to pay for additional transportation funding is “not the right message to be sending…to grassroots activists.”
Those who powered Republicans to sweeping electoral gains in 2010 will reject the argument from GOP leaders that increased highway spending is tantamount to a jobs plan. That echoes arguments made on behalf of the failed-stimulus and subsequent proposals endorsed by President Obama.
The head of one industry group bluntly noted the reforms were part of “a calculated move on the part of Republicans trying to get their base to support a massive, $260 billion bill that doesn’t cut spending.”
If November 6, 2012 is to be a referendum between two visions for our future, conservatives must use every opportunity to draw sharp contrasts between Right and Left. To paraphrase: it’s the spending, stupid.
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