Today’s jobs report not only showed strong job creation in June, with payrolls up 288,000, it also showed real acceleration in the pace of job growth, something we’ve not seen for a while. True, we’ve had head fakes before in this recovery, but if this recent pace of job creation sticks, it has the potential to really squeeze some slack out of the job market.
Which is why it would be downright political malpractice if Congress undermined these gains by failing to replenish the fading Highway Trust Fund, which is threatening to generate layoffs this summer.
States depend on the trust fund to support about half of their spending on roads, bridges and mass transit, and that’s an average. In poorer states, the federal share can go up to 70 percent and higher. More than 100,000 road projects are currently financed by the fund.
Transportation Secretary Anthony Foxx estimates that states could see a 28 percent drop in federal support starting later this summer if the trust fund isn’t quickly replenished, Damian Paletta of the Wall Street Journal reports.
A loss of that magnitude could easily translate into hundreds of thousands of lost jobs and put the brakes on a jobs recovery that may finally be taking hold. As MIT economics professor Frank Levy told me: “If you want to stop the recovery in its tracks, this is a terrific way to start.”
The inadequacy of the tax that largely supports the trust fund — an 18.4 cent per gallon levy on gasoline that hasn’t been raised in more than two decades — is widely known. The fact that the fund needs replenishing is also anything but a surprise.
In other words, obstructionist policymakers have once again created a fiscal cliff at the end of a broken road. If we were cruising along at full employment, maybe we could absorb hitting such a pothole. But when we’re just upshifting to a higher gear of job growth, it’s unthinkably irresponsible.