With Gas Tax Money Vanishing, Transportation Bills Mum On What Comes Next
WASHINGTON -- As both chambers of Congress continued to debate dueling surface transportation bills on Wednesday, Speaker John Boehner (R-Ohio) announced that a vote on the House's transportation bill would be postponed until late February. The Republican leader's hesitation underscores the deep difficulties lawmakers in both parties have had in facing up to an uncomfortable fact: gas tax revenues are running dry, and nobody wants to find a new source of cash to make up for them -- least of all as the economy still struggles and an election nears.
By 2013, the Congressional Budget Office predicts bankruptcy for the Highway Trust Fund, which collects gas tax revenues to be spent on interstates and other roads. A host of panels and pressure groups from the Simpson-Bowles Fiscal Commission to the U.S. Chamber of Commerce to the CEO of Ford Motors have all recommended raising the gas tax to fill the gap.
Last week, Sen. Mike Enzi (R-Wyo.), supported by Sen. Tom Coburn (R-Oka.), introduced a surprise amendment to the Senate Finance Committee's part of the transportation bill that would have taken the small step of pegging the gas tax to inflation. That would have somewhat replenished the Highway Trust Fund over the long term, but committee chairman Max Baucus (D-Mont.) quickly shot them down, saying that it wasn't the time.
Enzi and Coburn, Transportation Secretary Ray LaHood said Thursday, were "two very brave souls" for even bringing the subject up. But neither the Obama administration nor either chamber will include gas tax bumps in their transportation plans. The reason is simple, LaHood said: "People don't want to raise taxes in an election year."
Although some states faced with transportation deficits are beginning to consider raising their own gas taxes, almost nobody at the federal level seems willing to seriously contemplate raising the politically charged gas tax. Especially with the average gallon in the United States ringing in at $3.52, up 38 cents from a year ago.
Instead, the administration's budget pays for $476 billion in transportation spending over the next six years by relying roughly half on dwindling gas tax revenues and half from money that will no longer be spent in Afghanistan and Iraq as military operations draw down. But the president's proposal to "do some nation-building right here at home,” as he put it in his State of the Union, hasn't impressed Republicans, who say the plan really just relies on slippery accounting.
The supposed war savings are "imaginary money," Sen. Jeff Sessions said in a Budget Committee meeting on Wednesday that LaHood attended.
"We need the road program on a sound financial basis, not on borrowed money," he said.
Over in the House, meanwhile, Republicans proposed to fill the gap on their own $260 billion, five-year transportation bill with a variety of controversial provisions that create their own form of "imaginary" money, Democrats charged. The House GOP's ideas included loosening restrictions on offshore oil drilling and oil leases in the the Arctic National Wildlife Refuge. Over the life of the bill, however, those hotly debated items would only raise about $5 billion -- far less than what's needed to fill the funding gap.
"We just shouldn't be engaging in trying to find fictional revenues from fictional drilling that's never going to happen," Rep. Ed Markey (D-Mass.) told Republicans on the House Rules Committee on Tuesday.
To find more money, Republicans would also force federal workers to contribute more to their pensions. Rep. Virginia Foxx (R-N.C.) spoke favorably of the move by citing an apocryphal saying from bandit Willie Sutton as to why he robbed banks: "because that's where the money is." The alternative to the House's drastic measures, Chairman John Mica (R-Fla.) told the Rules Committee, would be raising the gas tax by 20 cents a gallon.
Even with all that, the CBO estimates that the House bill would empty out the Highway Trust Fund by the end of 2016.
The bipartisan Senate version of the transportation bill would keep funding for transportation at its current levels, spending $109 billion over two years. It has less of those "imaginary" or "fictional" revenue sources than either the administration or House bills, but its version comes with one major caveat: it would spend the rest of the Highway Trust Fund even earlier, over just two years, according to Mica.
The Senate bill, which has the support of the president and Republicans in its chamber, may never come into law. If it does, however, Congress will likely be faced with the very same dilemma again in just a couple years: what to do about that tricky gas tax.
CORRECTION: A previous version of this article referred to Max Baucus as a Republican; he is a Democrat.