Highway Bill: Another Spending Test for the GOP

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I testified yesterday to the Senate Finance Committee regarding federal highway and transit funding.

I appreciated the committee’s willingness to hear views different than the usual pro-spending positions of the Transportation Establishment, which includes nearly all Democrats, many Republicans active in transportation, and dozens of business, engineering, and construction lobby groups. I discussed reasons why decentralizing transportation funding and decision making would be the best policy approach.

Politically, the highway issue will be very interesting to watch in coming months. Congress needs to act because the Highway Trust Fund faces a huge gap between spending and revenues of at least $14 billion annually. The revenues mainly come from the federal gasoline tax, which everyone agrees is not going to be raised anytime soon.

What should Congress do? To believers in budget restraint, federalism, and efficient infrastructure investment, the answer is obvious: policymakers should reduce federal spending to match revenues. Heritage scholars examine the federalism angle in this piece. I discuss efficient infrastructure investment in this piece.

However, some Republicans apparently want to raise revenues to match today’s high spending levels. If Republicans go in that direction, it will be one more failure to align their policy actions with the fiscally conservative language that peppers their speeches and media comments.

Many Republicans chose the big-spending route on last year’s budget agreement and this year’s farm bill. What route will they take on an upcoming highway bill?