May 16, 2012
  

Revisiting the Senate Highway Bill

Ken Orski


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Innovation Briefs are published by Ken Orski. Cascadia Prospectus republishes them with permission. The content of Innovation Briefs does not necessarily represent the view of Cascadia Center or Discovery Institute. 

"I have not been a student of the Senate bill because the Senate bill has been academic to me. But now that it's becoming a potential reality and I'm a potential negotiator, I will become conversant with the Senate bill line by line and then I'll have an opinion," Rep. Peter DeFazio (D-OR), answering a reporter's query about details of a provision in the Senate bill (quoted in POLITICO's Morning Transportation, April 19.)

As Rep. DeFazio observed, getting to know the finer details of the Senate highway bill (MAP-21, S. 1813) has taken on new significance now that a House-Senate conference negotiation on the reauthorization measure has become a reality. Understanding the Senate bill is important because the Senate measure is likely to become the basis of any final bill.  The House bill (H.R. 4348) is little more than a 90-day extension of the current program (through September 2012) with the Keystone XL pipeline amendment attached to it.  It is silent on nearly everything addressed by the Senate bill.  And, equally, it is silent on nearly every issue germane to the transportation reauthorization except for a detailed set of environmental streamlining provisions.

Below, we provide a detailed analysis of one aspect of the Senate highway bill ---its finance and revenue provisions. We owe this analysis to Gary Hoitsma, editor of the Washington Letter on Transportation (published by the Carmen Group, www.washingtonletter.com), who alone among the Washington reporters had the initiative and curiosity to go behind the rhetoric of "bipartisanship" and document the convoluted financing of the Senate bill.  As Hoitsma's analysis shows, the Senate has made an extensive use of offsets over a period of 10 years to cover spending over just 15 months--- the effective length of the Senate bill at the termination of the current extension. Of the total revenue-increase offsets (to transfers into the HTF) only $3.1 billion would be transferred during the life of the bill while a transfer of $10.9 billion would occur over a period of 10 years.  This practice has been widely condemned as "budgetary gimmickry." A particular egregious example has been a provision inserted via a Managers' Amendment shortly before the final vote, transferring $5 billion in general funds to the Highway Trust Fund  "out of money in the Treasury not otherwise appropriated."  (Sec. 40313 of MAP-21).

Adding to the problem of the impending insolvency of the Highway Trust Fund ---a conundrum to which neither side has found a solution--- is the general mood among House Republicans as we approach the November election. For the rank-and-file, the goal of reducing spending and reducing the deficit, as reflected in the adopted FY 2013 House budget, would likely take precedence over any concerns about  "crumbling infrastructure."  For many House conservatives the better solution lies in narrowing the scope of the federal-aid program and shifting more responsibility for transportation to states and metropolitan regions.

As T&I Committee Chairman John Mica (R-FL) Rep. stated at the May 8 inaugural session of the House-Senate Conference, "...the solution to the Trust Fund solvency problem is not more deficit spending or General Fund transfers. The solution is major reform of programs, cutting wasteful spending and reigning in the federal bureaucracy."   House Ways and Means Committee Chairman Dave Camp (R-MI) and Senate Finance Committee Ranking Republican Orrin Hatch (R-UT) both cautioned their colleagues on the need to maintain fiscal discipline and not spend beyond the Highway Trust Fund's means. The legitimacy of the  "pay-fors", along with the Keystone pipeline, are thus expected to offer the main stumbling blocks to reaching an agreement.

But other aspects of the bill also deserve a critical scrutiny--- some are changes that were inserted into the bill late in the process and adopted by unanimous consent without debate; others are provisions that are not even remotely germane to the core purpose of the bill; still others are provisions that many stakeholders object to because they discourage states to partner with the private sector (the so-called Sen. Bingaman amendment).

The non-transportation provisions that are raising eyebrows include the creation of a new National Endowment for the Oceans, Coasts and Great Lakes to be housed in the Department of Commerce (Sec. 1603(4) of MAP-21), and a seven-year reauthorization for the Land and Water Conservation Fund which is a National Park Service program within the U.S. Department of the Interior (Sec. 1701 of MAP-21). Indeed, the Senate bill includes over $6.8 billion in new non-Highway Trust Fund spending that has nothing to do with the core purpose of the bill (see below).

Critics are also paying close attention to changes that were quietly slipped into the Senate bill and approved on the floor by unanimous consent without debate on March 13, one day before the final passage of the bill.  They include, notably, an amendment affecting the treatment of transportation "enhancements" (Sec. 1113 of MAP-21). This provision shifts the flexibility to decide how to spend the enhancements set-aside money from the state DOTs to local government agencies, thus substantially modifying an earlier agreement reached by the leaders of the Environment and Public Works (EPW) Committee. As the Committee's chairman, Sen. Barbara Boxer (D-CA) and its ranking member Sen. James Inhofe (R-OK) agreed at the November markup of the bill, it was only a compromise on that contentious issue that allowed the parties to move forward on the entire bill. 

Other MAP-21 provisions that have raised questions include a requirement that every new motor vehicle beginning in 2015 be equipped with a recording device designed to store data related to vehicle safety; and authority to revoke passports of tax delinquents (which the bill estimates would raise $743 million over ten years to help cover the $12 billion shortfall in transportation spending). 

The provisions cited above (and discussed in more detail in the Washington Letter on Transportation of March 19 through May 7) may be merely a tip of the iceberg. We simply do not know what other questionable items might have been slipped into this massive 1,600-plus page bill. It is now incumbent upon the House negotiators and their staffs (hopefully with the help of the press and the concerned transportation policy community) to examine the Senate bill  "line-by-line" as Rep DeFazio has promised to do, and to shine light on any other questionable provisions.

To fail to do so would be to accept former Speaker Nancy Pelosi's notorious advice that we must let Congress pass the bill so that we would know what's in it.  

12:42 PM |

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