GOP Budget Would Slash Transpo Spending, Entrench Oil Dependence
With the release of House Budget Committee Chairman Paul Ryan’s budget proposal yesterday, right wing calls for massive cuts to transportation spending are now enshrined in the GOP leadership’s fiscal plan. Ryan singled out transportation as an area particularly ripe for cuts, criticized the use of gas tax revenues for projects that aren’t highways, and called for transportation spending levels to barely cover half of what President Obama requested in February.
Ryan’s budget calls for $704 billion to be spent on transportation over the next decade. That’s $318 billion less than if current spending levels were simply extended forward, according to House Transportation Committee Ranking Member Nick Rahall’s office, and $633 billion less than what Obama requested.
The proposal would also radically shift the balance of federal transportation spending toward highways. It promises to eliminate all new intercity rail projects unless they can be established as profitable private enterprises, for example. It also blames the highway trust fund’s deficits on non-highway spending, with “bike trails” specifically singled out. Of course, the real cause of the trust fund shortfall isn’t the minuscule amount spent on bikeways but the declining revenues from a gas tax that hasn’t even been adjusted for inflation since 1993.
The unwillingness to raise the gas tax or add any additional revenue to the Highway Trust Fund is a major underlying reason for the major cuts in Ryan’s plan. By ruling out either increasing the gas tax or spending some general fund revenue on surface transportation, as has become the practice since 2008, the Ryan budget would essentially lock in major transportation cuts. (In contrast, the bi-partisan deficit reduction commission led by Erskine Bowles and Alan Simpson recommended raising the federal gas tax by 15 cents per gallon.)
Ryan’s budget also leaves billions in potential revenue untapped by leaving in place the substantial subsidies for the fossil fuel industry embedded in the nation’s tax code.
The GOP budget document is an opening gambit from the House leadership, and it’s hard to know at this point how Ryan’s proposals will affect either ongoing budget negotiations or House Transportation Committee John Mica’s efforts to pass a transportation reauthorization bill. For now, though, it seems that the segment of the Republican Party itching to cut government spending wherever possible is winning the fight over the party’s transportation policy.
The two short sections of Ryan’s plan that deal with transportation are copied below:
This budget draws inspiration from the GAO’s recommendations in many areas, one of which is the Highway Trust Fund. Over the past decade, highway spending has mostly exceeded the gas-tax revenues that finance the fund, because gas-tax levels leveled off while spending grew. Spending, meanwhile, has increasingly been diverted to non-highway projects, such as bike trails and museums, and politicized through earmarks such as the Bridge to Nowhere mentioned above.
To make up for funding shortfalls, the trust fund has required three large transfusions of taxpayer dollars from general revenues, totaling $35 billion since 2008. Without reform, another infusion will be necessary in 2013. This budget anticipates that Congress can keep the Highway Trust Fund solvent without additional general fund transfers or increases in the gasoline tax by consolidating dozens of separate highway programs that GAO has identified as duplicative. This will help focus every dollar on pursuing a targeted and cohesive national transportation policy.
While no federal department is free of inefficiency, the Department of Transportation offered a number of areas where spending could be cut back responsibly
Since 2008, funding for the Department of Transportation has grown by 24 percent – and that doesn’t count the stimulus spike, which nearly doubled transportation spending in one year. The mechanisms of federal highway and transit spending have become distorted, leading to imprudent, irresponsible, and often downright wasteful spending. Further, however worthy some highway projects might be, their capacity as job creators has been vastly oversold, as demonstrated by the extravagant but unfulfilled promises that accompanied the 2009 stimulus bill, particularly with regard to high-speed rail.
In the wake of these failures, and with the federal government’s fiscal challenges making long-term subsidization infeasible, high-speed rail and other new intercity rail projects should be pursued only if they can be established as self-supporting commercial services. The threat of large, endless subsidies is precisely the reason governors across the country are rejecting federally-funded high-speed rail projects. This budget eliminates these projects, which have failed numerous and clear cost-benefit analyses.