Transportation Secretary Ray LaHood played defense – and dodgeball – this morning as members of the Senate Budget Committee grilled him on how he proposed to pay for the administration’s new transportation agenda.
Secretary Ray LaHood indicates how many details he's going to give Congress on how to fund the transportation budget proposal (Photo: AP)On Valentine’s Day, the Obama administration released its budget proposal for next year. It included significant cuts to some programs, like heating assistance for the poor, and modest increases in others, like education and energy. But the president saved his biggest doozy for transportation – $556 billion over six years, about twice the current spending levels.
LaHood immediately grew impatient with the inevitable question – “How are you suggesting we pay for this?” Right away, he threw that hot potato back to Congress, saying it was up to the legislative branch to figure it out.
He could have started that process this morning, when he appeared before the Senate Budget Committee, but he again seemed impatient with the very question. (And this was the Budget Committee, after all – of course their primary concern is going to be the financial piece.)
The Senate, remember, is still controlled by Democrats, so he had an easier time there than he’ll have in the House. But everyone in Washington is focused on reining in deficit spending, although they may differ on how and how much.
Senator Jeff Sessions (R-AL) said he was “flabbergasted” by the size of the president’s budget request – a 62 percent increase for the USDOT “at a time when all of us know we’ve got to contain spending and do something about the surging debt we’ve got.”
Indeed, LaHood’s persistent refusal to engage on the funding question – at a time when Congress is obsessively trying to cut spending – is beginning to sound tone-deaf. Every time anyone presses him for specifics on how to make this plan work, he returns to soundbites about how bold the plan is.
Well sure, Mr. Secretary, we like bold, but we like possible even more.
“We’re placing this country at risk,” Sessions said. “In all honesty, if you can’t tell us what kind of tax you think would fund this and are prepared to defend it, I think there’s zero chance of us passing such a tax as this.”
But Lahood and Obama haven’t proposed a tax. Experts on and off the Hill agree that the only credible way to fund the country's current infrastructure program – much less an expanded one – is a gas tax increase or a shift to a vehicle-miles-traveled fee. The administration says these options are “off the table,” leading Sessions to deride the mystery funding source as the "new phantom tax; the not-gas-tax-tax.”
Committee Chair Kent Conrad – a Democrat and a big supporter of the secretary’s – also asked how LaHood proposed to close the ever-growing funding gap in the Highway Trust Fund. What are the options for closing this gap, and how realistic are they?
LaHood’s answer? “We want to work with Congress on our way forward.”
LaHood acknowledged that the Highway Trust Fund is deficient. “People driving less; they’re driving more fuel efficient automobiles,” he said. “As things stay stirred up in the Middle East, in countries that produce crude oil, we know that gasoline prices are going to continue to go up, and probably as a result people will be driving even less frequently than they are today, and that’s not going to help us in the collection of the gas tax.”
The secretary asserted that the transportation bill is a jobs bill, and that the effect on the economy would be positive.
Some senators proposed non-tax-related sources of revenue like Build America Bonds and tolling. LaHood mentioned the proposed infrastructure bank and the TIFIA loan program as possible funding sources (though the I-bank, especially, is not really a source as much as a destination of funding, at least at first).
Several Republicans – and some Democrats – also criticized the small percentage of the stimulus package that was devoted to infrastructure spending. They said that if we were worried about jobs and crumbling infrastructure, that was our big-spending moment to take care of it. And that moment, they say, has passed.
