Garbage funding gimmicks in the highway bill equate to generational theft

This week the House and Senate will vote on a massive $300 Billion highway bill that “funds” our nation’s infrastructure improvements through 2020.  Unfortunately the offsets – funds used to make up the gap between fuel tax revenue and spending outlays – are merely a series of budget gimmicks used to pass our obligations on to future generations.   

I have long been an advocate of a long-term highway bill that provides predictability and certainty to the construction industry, shippers, States and local municipalities.  Since 2009, Congress has passed over 35 short-term authorizations for surface transportation.  This type of stop-and-go legislating stifles job creation, investment, economic growth, and is no way to run our country.  While the highway bill passed by the House provides some certainty in how funds are spent, it fails to address the underlying problem that makes the highway trust fund insolvent – a sustainable funding source.   

{mosads}This Congress, I offered a bipartisan, commonsense solution to fund our infrastructure.  My proposal gave Congress the freedom to enact any number of proposals to sustain the Highway Trust Fund.  The solution doesn’t have to be simply raising the fuel taxes, but my proposal does require a sustainable solution. 

Sadly, with this highway bill, Congress missed an opportunity to provide a real solution for the American people; instead we relied on some of the most egregious budgetary gimmicks I have seen since coming to Washington. The fun starts with a $70 billion transfer from the General Fund to the Highway Trust Fund, which is used to supplement five years of infrastructure spending.  Even though the bill only provides five years of funding, the General Fund transfer will be “reimbursed” over a 10-year period.  In the words of Sen. Corker (R-Tenn.), this is generational theft.  

The two largest of these unicorn pay-fors – fictional funds that only exist in the fantasyland of Congressional budgeting – come from changes to the Federal Reserve and have nothing to do with highways.  The first is a cap on the amount the Federal Reserve can hold in as a surplus, which allegedly rises over $53 Billion.  Even former Federal Reserve Chairman Ben Bernanke has denounced this move—which simply caps the surplus at $10 billion—as a “budgetary slight-of-hand”, since it simply accelerates the timing of cash flows to the Treasury.  If this was not appalling enough, the second largest offset raises almost $7 billion by reducing the dividend payments to large member banks by pegging the rate to the high-yield on the 10-year Treasury note.  Using banks to pay for highways is another example of bad public policy and was added without hearings or studies on the implications to the industry and Federal Reserve membership.  

Perhaps the worst of all these pay-fors is the indexing of the customs user fees for inflation, which raises over $5 billion.  While Congress refuses to index the motor fuel excise taxes – which actually correlate to road usage – we are increasing fees on other modalities like airlines to offset highway spending.  The International Air Transport Association stated this provision “violate[s] the time honored principle that the costs borne by airlines should be attributable solely to the services provided to them.”  Indeed, the United States may even be in violation of its international obligations by increasing this fee without justifying a cost-based need.   

The remainder of the pay-fors are no better.  We are buying high and selling low with a drawdown of the Strategic Petroleum Reserve, adding private debt collectors, confiscating the passports of tax delinquents, and slashing interest payments from royalty collections.  None of these are remotely related to highways.  If genuine savings existed, they should be used to pay down our nearly $19 Trillion in debt.  

I came to Washington as a businessman, rather than politician, to work with my colleagues from both sides of the aisle to make tough decisions and offer the real solutions needed to grow our economy and reign in our nation’s debt.  The garbage gimmicks in this highway bill represent the worst of Washington’s fiscal games.  We can no longer accept the status quo.  Americans deserve better and future generations certainly deserve better.     

Renacci has represented Ohio’s 16^th Congressional District since 2011. He sits on the Budget and the Ways and Means committees.