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Paul Ryan’s House sets the stage for next highway bailout boondoggle

Conservative Review

GOP leaders have spent the past few years rubber stamping Obama’s agenda and refusing to confront him on the most consequential societal issues of our time.  This week they plan to preemptively undermine the next Republican president from his ability to make substantial reforms to our inefficient federal transportation system.

The House plans to consider a $325 billion 6-year highway bill that will require an $85 billion bailout through FY 2021.  Where will they find the $85 billion in savings?  The same place the found the $112 billion in “offsets” to fund the budget betrayal deal last week.  In other words, they will use Enron-style accounting and an array of intangible offsets to pay for another bailout of the failed and inefficient federal transportation system.  But what is most offensive about this bill is that, by reauthorizing federal highway programs for another 6 years instead of 2 or 3 years, this bill will preemptively sabotage the leverage of the next president to force critical policy changes in the system.

On July 30, the Senate passed its version of the bill, with only 15 Republicans opposing it.  The Senate bill only offsets the first three years of the 6-year shortfall (an estimated $85 billion), and as noted, even those offsets are notional.  For example, one of the offsets is the dubious notion of selling off the Strategic Petroleum Reserves, ironically, the very same offset they just counted against the budget bill!

The House plans to pass the Senate version of the bill (H.R. 22), albeit with a provision  that will prohibit Congress from spending more money on highways after the first three years unless they come up with more revenue.  But this is nothing more than a ruse to get conservatives to allow the House to go to conference with the Senate.  We all know how this will end.  A full 6-year bill with no real offsets and no conservative policy reforms that fix the systemic problem with our surface transportation system.

Once again, 21% of the entire bill is allocated for mass transit expenditures, something that should only be funded by states that are willing to pay for it with their own funds.  As the Competitive Enterprise Institute observed earlier this year, we are spending a quarter of the highway funds on a method of transportation that accounts for less than 2% of all trips.  Accordingly, 81% of the entire projected shortfall in the Highway Trust Fund is the result of increased spending on mass transit.

The irony of the bailout for mass transit coming on the heels of last week’s bailout of the Disability Insurance program is probably lost on the politicians, but it’s worth reviewing now.

Much like the payroll tax was sold as a pay-as-you go supply for Social Security, the 8.4-cent-per-gallon gasoline tax and the 24.4-cent diesel excise tax were promised to be used exclusively for highways and bridges.  And just like with Social Security whereby 17% of the funds were later diverted to the disability program, 20% of the highway funds have been diverted towards mass transit, as a result of the urban pressure groups.

This is why the responsibility for transportation and the revenue of the gas tax must be returned to the states.  They must be forced to prioritize their transportation projects.  This is a common sense reform conservatives have united behind over the past few years, yet Paul Ryan has failed his first test and is embarking on a process that will not only continue the failed status quo and drive yet another $85 billion bailout, it will preclude the next president from enacting these reforms.

And of course, the Senate bill contains a reauthorization of the Export-Import Bank, the only federal agency Republicans have successfully shut down in recent memory.  Ryan himself claims to oppose Export-Import Bank, but this process clearly shows that he will not deviate from the Washington Cartel, even to push the few ideas he shares with conservatives.

New party leader, same mentality.

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