UPDATE: The final bill contained a $2.4 billion transfer from Leaking Underground Storage Tank Trust Fund to the Highway Trust Fund in June 2012 and three transfers from the General Fund to the Highway Trust Fund, totaling $18.8 billion. They were: $6.2 billion to the Highway Account of HTF in October 2012; $10.4 billion transfer to Highway Account of HTF in October 2013; and $2.2 billion transfer to Mass Transit Account of HTF in October 2013. They dropped the car tariffs change and the gas guzzler transfer. They replaced those smaller transfers and offsets with the pension provisions and a tiny bit from the roll-your-own-cigarettes change.
Congressional leaders announced opaquely last week that they’d “moved forward” on a deal on the highway section of the transportation bill. That means transit, rail, and safety programs are still being negotiated. And it means the financing of the bill hasn’t yet gotten the seal of approval from the House.
Still, both houses of Congress have agreed to spend more on the transportation bill than the Highway Trust Fund itself can bear. (The House gave its green light a couple weeks ago when it nixed the Broun motion to keep transportation spending to HTF receipt levels.) To overspend the HTF but still plausibly deny that they’re deficit-spending, the Senate Finance Committee has done some pretty fancy footwork to offset the expenditures with other savings.
Chair Max Baucus (D-MT) squeezed blood from the stone of the U.S. budget, and many of his colleagues have lauded him as a miracle worker. But Taxpayers for Common Sense – and lots of other people with common sense – say the numbers don’t really add up. The information below comes from TCS’s report, released last week, on the Senate pay-fors.
Stick with me here – this is all a little convoluted, but understanding the funding is a key part of the process. While the Senate transportation bill may be a good stop-gap compared to the option of even shorter extensions, a look at the funding shows why it provides no long-term answers to the question of how to pay for transportation.
The sources of new Highway Trust Fund revenue Baucus et al came up with are:
A transfer from the general fund: $4.97 billion. This is the most obvious example of deficit spending – just taking money from the Treasury to pay for transportation. That’s on top of $34.5 billion the Treasury has already coughed up in the last four years to bail out the Highway Trust Fund – something no one wanted to repeat.
Dedication of imported car tariffs to the Highway Trust Fund: $4.52 billion. This revenue would no longer go to the general fund.