Road to Nowhere?

It remains to be seen whether this Congress will do the right thing by acting to replenish the Highway Trust Fund.

An aerial view of Interstate Highway 405 in Los Angeles is seen on June 12, 2013.
National Journal
Norm Ornstein
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Norm Ornstein
July 29, 2014, 5:59 p.m.

The in­cip­i­ent deal between Sen­ate Vet­er­ans’ Af­fairs Com­mit­tee Chair­man Bernie Sanders and his House coun­ter­part Jeff Miller on a VA re­form bill to deal with the ter­rible back­logs of med­ic­al treat­ment is the first en­cour­aging sign that the last stages of the 113th Con­gress will not be a total, em­bar­rass­ing fail­ure. There is also a chance, al­beit not a great one, that we will see some kind of patch to deal with the bor­der crisis. Still, with only two days left be­fore the Au­gust break, with a min­im­al sched­ule set for the fall, and with Re­pub­lic­ans de­term­ined not to rock their own boat by for­cing votes that di­vide the GOP Con­fer­ence between rad­ic­als and con­ser­vat­ives — which means votes on al­most any­thing that could res­ult in a sign­ing ce­re­mony — it is hard to be very bullish.

And that is pro­foundly de­press­ing. The fact is that there are mul­tiple crises or press­ing prob­lems out there, and the deep dys­func­tion in Con­gress is like a force field where pro­gress on solu­tions bounces off to die. Nowhere is this more true than in the broad area of in­fra­struc­ture, and the nar­row­er and more im­me­di­ate need to re­plen­ish the High­way Trust Fund.

The fund has been fin­anced through the gas­ol­ine tax, and a com­bin­a­tion of factors has seen it dwindle to next to noth­ing. With crum­bling high­ways and bridges and great­er de­mand, the needs have grown. But the rev­en­ue from the gas tax, which has not changed from the 18.4 cents a gal­lon im­posed in 1993, has not come close to keep­ing pace. In­fla­tion has re­duced its value by nearly 40 per­cent; if in­fla­tion in­dex­ing had been in place, the tax on autos would now be 29 cents a gal­lon. At the same time, the dra­mat­ic ad­vances in fuel ef­fi­ciency have sub­stan­tially eroded the amount com­ing in, and the value will erode much fur­ther as the new fuel-ef­fi­ciency stand­ards take ef­fect over the next dec­ade.

The Sen­ate wrestled Tues­day with a short-term patch for the high­way fund, and the House passed a $10.8 bil­lion bill last week that would keep pro­jects go­ing through May. But the ef­forts rep­res­ent only a quick fix. The Con­gres­sion­al Budget Of­fice tells us that to meet the ex­pec­ted needs for high­way in­fra­struc­ture, the trust fund will re­quire an ad­di­tion­al $172 bil­lion over the next 10 years. The good news is that this spend­ing is a bar­gain, giv­en its pro­pel­lent ef­fect on the eco­nomy and jobs.

There is an im­me­di­ate need to re­plen­ish the High­way Trust Fund to pre­vent a dis­aster in the peak con­struc­tion sea­son com­ing up. The es­tim­ates are that fail­ure to do so will cut fed­er­al trans­port­a­tion dol­lars go­ing to the states by 28 per­cent, af­fect­ing 100,000 pro­jects that em­ploy 700,000 work­ers, and deal­ing a ser­i­ous blow to an eco­nomy try­ing now to re­cov­er from the long peri­od of eco­nom­ic down­turn and stag­na­tion. The way to do that is to in­crease the gas­ol­ine tax. Prob­lem-solv­ers Bob Cork­er of Ten­ness­ee and Chris Murphy of Con­necti­c­ut have pro­posed a com­mon­sense and mod­est plan call­ing for an in­crease of 12 cents per gal­lon in the tax, in­dex­ing it to in­fla­tion. But House Re­pub­lic­ans have balked at any tax in­crease (thanks, Grover Nor­quist!). And plenty of Demo­crats in Con­gress and the White House are fear­ful of a gas-tax in­crease right be­fore the elec­tion — it is, after all, the most vis­ible fed­er­al tax, something most Amer­ic­ans see every time they go to fill up.

Still, giv­en the re­gress­ive nature of the tax (wealth­i­er Amer­ic­ans are more likely to have fuel-ef­fi­cient cars than poorer ones, and spend a much smal­ler share of their in­comes on gas­ol­ine), and the con­tinu­ing im­prove­ments in fuel ef­fi­ciency, the gas tax is not the long-term solu­tion to the prob­lem. Demo­crat­ic Rep. Earl Blumenauer of Ore­gon has been work­ing on this is­sue for some time, and he has come up with a con­struct­ive and thought­ful ap­proach, em­bod­ied in something he calls the Up­date Act. Blumenauer would phase in a tax of 15 cents a gal­lon over the next three years — but move to a more sens­ible and stable source of fund­ing to be put in place by 2024. What would that be? Most likely, it would fol­low the re­com­mend­a­tions of two com­mis­sions that ad­dressed these is­sues in 2008 and 2009, both of which called for ex­amin­ing mileage-based user fees as a re­place­ment for the gas tax. A fee of 2 cents a mile would raise the same amount as a gas tax of 15 cents a gal­lon. Gas taxes are ac­tu­ally rough-cut mileage fees; you drive more miles, you use more gas. But gas taxes are a great­er bur­den on those who drive heav­ier and less fuel-ef­fi­cient vehicles, which means it hits the poor and rur­al res­id­ents harder. Con­trary to con­ven­tion­al wis­dom, mileage-based user fees would ac­tu­ally be less of a bur­den than are gas taxes on rur­al res­id­ents who have to drive long dis­tances to work or shop.

There are lots of ways to make a mileage-use sys­tem work. Ore­gon and oth­er states are us­ing state-of-the-art tech­no­logy that can track how many miles a vehicle is driv­en and at the same time not be in­trus­ive. It is eas­ily done with sys­tems like GM’s On­Star, and could be phased in to in­clude ba­sic tech­no­logy lim­ited to count­ing miles on all cars. In his bid to ul­ti­mately get rid of the fed­er­al gas tax, Blumenauer wants to take a sub­stan­tial peri­od of time to let states ex­per­i­ment with op­tions that fit their res­id­ents’ needs and de­sires, tak­ing in­to ac­count pri­vacy con­cerns.

There should be noth­ing ideo­lo­gic­al about find­ing ra­tion­al ways to pay for sur­face-trans­port­a­tion in­fra­struc­ture, and clearly those who use it more should pay more. But our tri­bal wars have got­ten in the way of ra­tion­al­ity on this as in so many oth­er is­sues — in­clud­ing of course broad­er in­fra­struc­ture needs such as re­build­ing and strength­en­ing the elec­tric­al grid while pro­tect­ing against cy­ber­threats; mov­ing to green­er and more ef­fi­cient fuels; ex­pand­ing high-speed In­ter­net con­nec­tions to all Amer­ic­ans; re­build­ing aging sew­ers, wa­ter lines, and sub­ways; and many more needs that must be ad­dressed to en­able the coun­try to com­pete in the 21st-cen­tury glob­al eco­nomy.

Ac­tion in the im­me­di­ate term is a test for the cur­rent Con­gress on wheth­er it can barely inch over the bar of ac­cept­able per­form­ance. Ac­tion to com­plete a strong and mean­ing­ful long-term plan where fund­ing is clearly the best in­vest­ment the coun­try can make is a big­ger test for our in­sti­tu­tions. In­ac­tion on either or both fronts would ce­ment the 113th Con­gress as a top con­tender for worst Con­gress ever.

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