While you were getting ready for the heartbreaking World Cup match yesterday, President Obama was needling Republicans over the dwindling Highway Trust Fund. The fund, which pays for maintaining and improving roads, bridges and mass transit systems all over the country, is running out of money fast. This is a problem that’s going to turn into a crisis, and unfortunately, in the current political environment it’s hard to imagine the president and Republicans in Congress arriving at a solution.
Here’s some of what Obama said:
So the plan we put together would support millions of jobs. It would give cities, and states, and private investors the certainty they need to plan ahead. It would help small businesses ship their goods faster, help parents get home to their kids faster. And it wouldn’t add to the deficits — because we’d pay for it in part by closing tax loopholes for companies that are shipping their profits overseas to avoid paying their fair share of taxes. Seems like a sensible thing to do. (Applause.)
It’s not crazy, it’s not socialism. (Laughter.) It’s not the imperial presidency — no laws are broken. We’re just building roads and bridges like we’ve been doing for the last, I don’t know, 50, 100 years. But so far, House Republicans have refused to act on this idea. I haven’t heard a good reason why they haven’t acted — it’s not like they’ve been busy with other stuff. (Laughter.) No, seriously. (Laughter.) I mean, they’re not doing anything. Why don’t they do this?
Well, the reason they don’t do it isn’t hard to figure out: It costs money, and that means raising taxes to pay for it, which Republicans don’t like to do. We could also pay for it with deficit spending, but they don’t like that, either. And while the jokes are certainly good for a laugh from a friendly crowd, I’m not sure whether Obama thinks that’s actually going to make Republicans more inclined to work with him on this.
But before we get to the politics, a little background. Spending to maintain U.S. transportation infrastructure is paid through the federal gas tax, which is 18.4 cents per gallon. (Your state also has its own gas taxes, which can be substantially more.) For a long time that tax worked well, because as the country grew, more people bought and drove cars, and the fund remained healthy. But in recent years, as vehicles have become more fuel-efficient, the money coming into the fund has slowed, and it hasn’t been able to cover all the maintenance and construction projects we need.
The Congressional Budget Office says that starting next year, the fund won’t have enough money to meet its obligations, and keep in mind that means just the projects that are already in progress. New projects would be out of the question, and even the road maintenance already happening could have to be scaled back. And with new fuel economy standards coming in the next few years, the problem is only going to get worse.
So the fund needs more money. And how do you get more money? The obvious answer is to raise the gas tax and index it to inflation. Since the tax is built into the price at the pump — when was the last time you filled up your tank and mentally subtracted the 18.4 cents a gallon? — it ends up being largely invisible to consumers. And unlike income taxes, which people can convince themselves involve taking their money to do whatever they find to be government’s most objectionable function, the gas tax has a very specific purpose that everyone supports.
But it’s still raising taxes, which is politically problematic. That’s why Obama says we can shore up the trust fund by “closing loopholes,” which is something that always sounds good in the abstract, until you actually start specifying the loopholes to be closed, at which point those whose ox is being gored mobilize armies of lobbyists to make sure their particular loophole stays open. Another idea is to pay for it through a “tax holiday” on the cash U.S. corporations are holding overseas, which would give a short-term (and still insufficient) injection of funds but wouldn’t solve the long-term problem.
While we shouldn’t get overly nostalgic for the good old days of horse-trading and earmarking, this is the kind of thing that Congress used to be able to take care of. And in a democracy populated by adults, there ought to be an acknowledgement that if you want roads to drive on, they have to be paid for. But these days, with a House of Representatives dominated by anti-government conservatives whose fury at the president seems to grow by the day, it’s easy to see our infrastructure problem getting worse and worse, without the political will to solve it until things become absolutely desperate.