House GOP Leadership Continues to Advocate Flawed and Shortsighted “Drilling for Roads” Plan

by Marc Scribner on January 10, 2012

in Blog

House Majority Leader John Boehner said in a statement yesterday that he will continue to support a Republican proposal that would tie expanded energy production on federal lands and in offshore areas to highway funding: “In the coming weeks and months, the House will take action on the American Energy and Infrastructure Jobs Act, which will link expanded American energy production to high-priority infrastructure projects like roads and bridges in order to create more jobs.” We previously noted this development here on in November. I had been holding out hope that House GOP leadership would adopt a New Year’s resolution disavowing this flawed proposal… unfortunately, here we are.

In December, National Review Online published a brief op-ed of mine explaining the problems with “drilling for roads” and the danger such a funding mechanism would pose to the Highway Trust Fund:

During the 35 years that it took to build the Interstate system, fuel taxes provided an adequate source of pay-as-you-go funding. As a result, America built its modern superhighways without adding to the national debt. In 1982, Congress authorized that a portion of fuel-tax revenue be dedicated to mass transit. It was at this time that the user-pays/user-benefits bond began to weaken.

Fast forward to 2011, and the Highway Trust Fund is facing insolvency. The last time Congress raised excise taxes on fuel — currently set at 18.4 cents per gallon of gasoline and 24.4 cents per gallon of diesel — was 1993. Inflation has reduced its buying power by 40 percent, annual vehicle-miles traveled have increased by 30 percent, and mass transit now siphons off one-fifth of highway user-tax revenues.

A quick, temporary fix would be to raise federal fuel-tax rates, but this is a political non-starter in the current political and economic climate. If House Republicans are truly serious about improving our nation’s highway infrastructure without increasing federal tax rates on fuel, they could devolve more transportation funding responsibility to the states and support more tolling. They could also rein in the waste and abuse of highway-user revenues at the hands of pro-mass-transit special interests and their enabling politicians.

Instead, House Republicans appear ready to undermine one of the more fiscally conservative funding mechanisms in existence. A provision of the 1974 Budget Act requires that the Highway Trust Fund receive 90 percent of its revenue from users in order to maintain its exemptions from appropriations meddling. Assuming drilling royalty revenues are great enough to close the near-term funding gap, the House Republicans’ proposal would push the percentage of user-based Trust Fund revenue to well below 80 percent.

Weakening this standard calls into question the purpose of having a federal trust fund in the first place. If that were to happen, the chorus for abolition of user-pays and a reactionary reversion to general-revenue funding of highways would only grow louder. Rather than learning from our previous mistakes, we would be making them all over again.

On January 30, CEI will host a Capitol Hill briefing on the problems with “drilling for roads,” the importance of preserving the user-pays/user-benefits principle in the forthcoming surface transportation reauthorization legislation, and will present serious solutions to highway funding problems. We’ll post details soon.

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