Congressional staff who worked around the clock through the weekend on a multi-year transportation bill won’t be able to resolve critical differences by Friday’s deadline, forcing lawmakers to seek an extension for the 15th time.
House Transportation Committee Chairman Bill Shuster (R-Pa.) said “good progress” was being made, but with the full conference committee not scheduled to meet until Wednesday, he said a two-week extension was needed to finalize the deal.
“The conference committee needs the time necessary to meet in public, complete negotiations and produce a final measure,” Shuster said.
Though there are some significant differences in the two six-year bills, the biggest hurdle was in how the House and Senate sought to pay for it.
While the two bills met the pressing need for a multi-year transportation bill, critics say it inartfully dodged another: the need to find a better way to pay for the essential systems that move Americans from place to place.
Staff from the House and Senate worked through the weekend to meld the very different funding sources. Their choices were a mix of money that one critic derided as “a sick joke” and former Federal Reserve chairman Ben Bernanke called “sleight-of-hand.”
What Congress has steadfastly refused to do — despite the urging of the U.S. Chamber of Commerce, the American Automobile Association, labor unions, truckers and dozens of other voices — is raise the 18.4-cent federal gas tax.
House Speaker Paul D. Ryan (R-Wis.) has been outspoken in his opposition to a gas tax increase. Shuster calls it a non-starter. Senate Finance Chairman Orrin G. Hatch (R-Utah) says it simply wouldn’t pass, particularly in the House.
History and politics are at the core of the issue.
Congress established a penny-per-gallon gas tax in the 1930s, and then upped it 4 cents a gallon in 1959, when President Dwight D. Eisenhower set out to build the interstate highway system.
Most Americans tell pollsters that they would agree to a modest gas tax increase if it meant their roads and transit systems got repaired.
But a great many members of Congress, particularly in the House, have signed a pledge inspired by the conservative activist Grover Norquist, promising never to raise taxes. In their nightmares, they envision the attack ads their political opponents would run if they reneged and voted to increase the gas tax.
Long ago, Congress decided to funnel gas tax revenue into the Highway Trust Fund, a dedicated fund that wouldn’t be subject to the whims of future congresses that might whittle away transportation cash if they saw more pressing needs.
But with cars getting astronomically good mileage when compared to 1959 (or even 1993), there isn’t enough money in the trust fund to pay for everything Congress wants. For most of the past decade, they have had to siphon about $10 billion a year from elsewhere to keep overall spending at about the $50 billion annual level.
In the past, the additional cash has come from the various general fund sources that have been criticized as gimmickry.
This time around, the nonpartisan watchdog group Taxpayers for Common Sense said Sunday, Congress is engaged in “budgetary dark arts” that only “create an illusion of budgetary discipline.”
The House primarily wants to snatch money from the heretofore sacrosanct Federal Reserve surplus account that the bank uses to cushion against potential losses. Fed Vice Chairman Stanley Fischer called tapping the bank to pay for ongoing federal programs a “dangerous” precedent.
The Senate came up with a more ambitious number of sources, including the sale of 101 million barrels of oil from the federal Strategic Petroleum Reserve at an average price of near $90 per barrel. The market price for oil last week dipped below $42 a barrel. They also want to reduce the amount of interest the Federal Reserve pays to banks and redirect cash paid by airline passengers into the Highway Trust Fund.
“This whole process makes a mockery of the users-pay/users-benefit principle on which the federal and state highway trust funds were based,” transportation expert Bob Poole of the Reason Foundation wrote recently, calling the funding sources a “sick joke.”
Poole served on a special panel that a decade ago recommended a shift from the gas tax to a formula in which drivers are taxed based on each mile they travel. There is considerable agreement that a miles-traveled tax eventually will replace the gas tax.
Though there are pilot programs underway in several states, the transformation process is likely to take more than a decade. The nonpartisan Congressional Budget Office said in June that a 10-cent-per-gallon bump in the gas tax would revitalize the Highway Trust Fund for another 10 years.
“In the short-term the fuel tax is the only way we can do it that’s predictable, that’s sustainable, that’s dedicated and that allows us to get a reauthorization or maybe two to get on with business,” said Rep. Earl Blumenauer (D-Ore.). “In 12 years, we can transition to a national road user charge.”
The tax-averse American public has shown a surprising willingness in some polls to accept a gas tax hike if they are confident it will be spent on roads, bridges and transit.
“Even in 2010, when the American economy was not doing well, 62 percent of the people said they would support a [highway and transit] maintenance-focused gas tax increase,” said Asha Agrawal, who has directed six years of polling for the Mineta Transportation Institute.
Agrawal says congressional opposition to raising that tax is “simply people adhering to a no-tax principle.”
Jack Basso agrees. Basso recently retired as chief financial officer of the American Association of State Highway and Transportation Officials.
“Ultra-conservative people of the world say ‘if you break this [anti-]tax pledge you’re dead,’ ” Basso said. “On the Hill, members really do believe that the guns will be turned on them at home by their opponents.”