Another Dud Highway Bill from the House

Michael Sargent 

Seattle, Wash. (Flickr / Washington State Dept of Transportation / CC BY-NC-ND 2.0)

Michael Sargent

Michael Sargent is a research associate at Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

Today the House Transportation and Infrastructure committee will mark-up their “long-term” highway bill, the Surface Transportation Reauthorization and Reform (STRR) Act, with only a week left before the deadline.
Spanning six years, STRR is the House’s response to the big-spending DRIVE Act that passed in the Senate at the end of July, just before Congress decided on a short-term, $8 billion patch instead.
Those who expected the “reform” part of STRR to be the emphasis will not find much to like in the legislation. STRR is another status-quo bailout that perpetuates the chronic overspending and misallocation of resources spent out of the Highway Trust Fund. The bill, which totals $325 billion in spending, keeps current funding levels in place (adjusted for inflation) while completely disregarding the annual deficit of about $15 billion expected over the next six years.
Diverting the Gasoline Tax Away from Highways

STRR continues the unseemly practice of diverting federal gasoline tax revenue away from highways and toward transit projects that should be in the hands of local or state governments. Maintaining major diversions such as transit, as well as the injection of unrelated general revenues into the trust fund, further erodes the “user-pays, user-benefits” principle that has been the bedrock of highway funding since 1956.
Aside from maintaining a Washington-centric approach to transportation funding, there are other problems with STRR. Foremost, there is still no word on how Congress expects to offset $90 billion needed to cover the 6-year projected shortfall.
The Senate’s DRIVE Act only bothers to provide three years of funding using questionable tax increases and budget gimmicks, an approach dubbed “a sick joke” by transportation policy veteran Bob Poole.
Unfortunately, we can expect similar tactics from the House (unless their pay proposals are gobbled up by other fiscally negligent legislation).
The Federal Role In Transportation
Furthermore, the bill continues to expand the federal role in transportation, which should focus on projects that are truly national in scope and are federal priorities. STRR expands funding for bridges that are not part of the national highway system and thus should be taken care of by states and localities.
As Competitive Enterprise Institute fellow Marc Scribner points out, the Transportation Infrastructure Finance and Innovation Act program—which is meant to provide loans to finance projects of national significance—is watered down to allow access to projects as small as $10 million, ensuring that “small parochial projects” will now contend for financing against real national needs.
Perhaps the best thing that can be said about STRR is that it remains a better option than its woeful counterpart in the Senate. The Senate’s DRIVE Act would increase spending authority by some $35 billion over the six year baseline, piling on to the already sizable deficits by upping transit funding and adding new goodies such as a $2 billion per year freight program.
STRR at least does not increase baseline funding and does not shower transit with an even more disproportionate share. And, STRR only guarantees funding for the years that are offset, whereas the DRIVE Act guarantees cash flows for all six years whether or not congress can dig up the roughly $50 billion needed to fund the latter three years.
There are some encouraging changes as well: STRR converts the Surface Transportation Program into a block grant program, enhancing state and local control over transportation decisions.
It frees up 50 percent of urban-area funding for the deplorable Transportation Alternatives Program—which lavishes bike paths, beautification projects, and other local frivolities with federal money—to be used on more worthwhile projects like highway maintenance or bridge repair. The procurement and environmental review procedures are streamlined and duplicative programs are consolidated.
While these reforms are steps in the right direction, the bill still fails to address the overarching failures brought on by congressional mismanagement of highway funding. Although the pay-fors remain to be seen, it is likely that STRR would continue and exacerbate this trend.
Rather than continue bailing out a broken system, congress should give itself the opportunity to enact real reforms that put states in the driver’s seat and focus the federal role on projects of true national significance