THE HIGHWAY tax-and-improvement bill, now speeding through Congress, needs some repair work of its own. Linking an increased tax on gasoline with a stepped-up effort to build and maintain highways, roads, bridges and transit systems was an obvious marriage of convenience: raising the gas tax promotes energy conservation; using the receipts for transportation improvements serves an obvious public need. And for those reasons, it deserved to be supported even though, at best, the measure was never ideal economic or social policy.
Despite all the job-creation enthusiasm now propelling the bill through Congress, this never was meant to be -- and is not -- a job-creation bill. That has always been understood. In fact, like previous anti-recession public-works measures, it could actually destroy more jobs than it creates. Construction jobs are very expensive. They require much heavy equipment and material, and construction wages -- supported by the federal Davis-Bacon Act -- are high. Construction projects also take a long time to complete. The extra $5.5 billion that the gas tax would raise almost surely would create more jobs if it were left in consumers' hands or devoted to public services with lower labor and overhead costs.
But the measure can be justified if the money raised is directed as closely as possible to essential transportation needs. The version of the bill passed on Monday by the House improves on the current federal highway program -- the vehicle by which the money will be distributed -- by earmarking 1 cent of the additional gas tax for mass transit capital improvements. However, the measure still directs too much money -- about $4 billion annually -- to construction of new interstate highway projects, many of which are of dubious national or even local interest. Why build more roads when the nation can't maintain those it has?
Then there's the matter of how the money is distributed. There is no perfect formula for distributing highway or any other federal money, but this one needs more work. Under the administration proposal, some severely distressed states would have paid much more in added gas taxes than they got back in federal aid. The House limited their losses to 15 cents on the dollar; but does it make sense for a state with a Depression-level unemployment rate, such as Michigan, to be losing at all while relatively prosperous states, such as Alaska and Hawaii, get back $3 or $4 for each dollar they contribute?
States will also have to put up $20 to $25 for each $100 in federal aid for maintaining state roads and bridges. Even with the House provision for one year of borrowing, this means that financially stricken states will have to forgo help or divert money from other pressing needs.
There are also good things in the House bill that may come under heavy pressure in the Senate. One is the inclusion of a stepped-up tax on heavy truckers -- to cover their contribution to highway abuse -- that the administration wanted. Another is the exclusion of changes in the current highway law that would be most harmful to the environment--also changes that the administration wanted. Time is short, but the Senate should be careful about how it proceeds. The changes it makes in the bill may make the crucial difference between one that is clearly not in the public interest and one that deserves full public support.