As the week continues to unfold, House Republicans continue to whip the votes on the centerpiece of their legislative agenda. I wanted to consolidate and summarize the main reasons for conservative opposition, because if conservatives listen, we can bring this bill down and start over with a fiscally responsible reform plan. Here are the top five reasons to oppose the highway bill (HR 7):
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1) HR 7 is a Keynesian stimulus bill one quarter the size of the Obama stimulus. Republican Leadership is very sensitive to this charge, but its true. This bill is a highway spending bill and the centerpiece of the Republican “jobs” agenda—let that discordance set in for a minute. It is called the American Energy & Infrastructure Jobs Act. According to a press release announcing the legislation, “The Speaker and Republicans today are offering a transportation jobs bill that will be a win-win-win for the American people. Americans will win by rebuilding our nation’s infrastructure. Americans will win by putting millions to work” (emphasis added). This is the Keynesian logic. Fill a pothole, create a job. Government spends in order to create jobs, and Republicans are estimating the bill will create 8 million based on presumably Keynesian economic models. Unfortunately, every conservative knows that government must take from the private sector in order to fund anything it does, thereby necessarily destroying jobs elsewhere in the economy. And based on their opposition to Obama’s trillion dollar stimulus, I would have thought that House Republicans knew that too.
2) HR 7 constitutes a massive bailout. The general rule with each highway bill is that they be financed by people who use the roads. Recently transportation has outpaced revenues and the general fund of Treasury (i.e., all taxpayers) has needed to bail out the highway trust fund. HR 7 makes these exceptions the rule. Speaker Boehner’s press secretary, Brendan Buck, admits that, “The gas tax does not generate enough revenue to meet all the infrastructure needs in America.” Of course by “infrastructure needs” he means what is currently being spent, as if the status quo in Washington has ever been the test for conservatives of what is “needed” in America. But thankfully we can all agree that there is a shortfall. HR 7 would spend $262.9 billion over five years (it actually increases spending over current law), and revenues only absorb $193.2 billion of that cost. That is $69.7 billion over the next five years that taxpayers will have to cover in an era when it already cannot cover its many obligations as evidenced by years of trillion dollar deficits. (If you’re generous and allow the bill sponsor’s to assume that there are $15.6 billion in current balances in the highway trust fund, it lowers the bailout figure to $54.1 billion. The problem is those funds exist only in an accounting sense and don’t really offset the shortfall in any real sense.)
3) HR 7 is a bait-and-switch to enable higher spending with Democrats. There are some nice reforms to improve transportation policy at the programmatic level, and of course, there are the offsets to drill in ANWR and the OCS and to require federal workers to pay more for their pensions. These reforms would be great if they were stand-alone legislation that was not being used to mask and perpetuate a highway bailout. But its worse than that. Republican Leadership are attaching these provisions in order to distract conservatives from the fact that a $262.9 billion highway stimulus bill is the centerpiece of their agenda. They want to get to a conference committee with the Senate where they are likely to agree on the same spending numbers (the two chambers’ spending levels are very similar) and jettison the reforms and offsets. This will allow Republicans to initially look conservative during consideration in the House and then throw up their hands and blame Democrat recalcitrance in the Senate and the White House for why they inevitably will have to cave in negotiations and accept only the higher spending. This is everything the tea party hates about the way Washington works. House conservatives cannot vote to allow the bill to go to conference at these spending levels, and those that do will be complicit in the final arrangement with the Senate.
4) HR 7 ensures the demise of real, lasting conservative reform. Conservatives have long sought to devolve or “turn back” the federal highway program to states. The federal gas tax would be gradually phased out, and states would take on the responsibility of both maintaining the interstate system and financing it as they see fit. The case to do so is easy when it’s a simple argument about returning a state’s share of gas tax revenues closer to home. However, as general revenues continue to bailout the highway trust fund, it means that individual states are being subsidized by the taxpayers of other states to maintain high spending levels, entrenching a vested interest in the status quo at the federal level. The long-term success of transformational conservative reforms is won and lost in trenches such as these, and conservatives will look back with regret if they allow HR 7 to move forward.
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