Friday, February 10th, 2012 and is filed under Blog
Both the House Republican highway bill and the Senate version use ridiculous subterfuge to close the gap of projected revenues and outlays. Under either plan, there will be $13-15 billion more in annual spending than gas tax revenue. Democrats want to close the gap with tax increases, while Republicans are seeking to close the gap with sundry revenue increases from domestic drilling and spending cuts to federal pensions.
Aside for the obvious gimmick of using extraneous offsets to fund a “pay-as-you-go-system,” both bills rely on the use of $15 billion left in the trust fund to pay down the deficit. The problem? Those funds don’t really exist.
Much like the phantom $2.6 trillion in the Social Security Trust Fund, the existing balance in the highway trust fund (HTF) is not representative of a tangible resource. There is not one penny left in the trust fund. The dollar figure that members of Congress are banking on represents internal liabilities between other government accounts and the HTF. These are merely IOUs from the treasury to the HTF. In other words, we are just spreading the same funds and the same deficits from one account to another.
The bottom line is that we need to stop spending money we don’t have. The way forward with transportation spending is to allow states to collect their own gas tax to fund their transportation needs. It’s really not the complicated. Then again, everything in Washington has to involve some sort of subterfuge.
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