White House misses an opportunity on highways

Posted Thursday, Jun. 26, 2014  comments  Print Reprints
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The latest deadline facing Congress is not the debt ceiling. Nor is it spending bills to keep the government open.

It’s the Highway Trust Fund, and if this source of financing for road and transit projects across the land is not replenished soon — like, in a few weeks — states will have to start slowing down or delaying infrastructure projects, which is exactly the opposite of what we need them to do given our still-recovering job market.

Since Congress has long been unwilling to come up with a solution to the bleeding Highway Trust Fund, the usual move in recent years has been to temporarily patch the hole with a transfer from general revenues, and that’s probably what will happen in this next round, too.

But you really don’t need to be much of a budget wonk to understand the fundamental problem here: The federal gas tax that supports the trust fund was set at 18.4 cents per gallon in 1993, and it has not been updated since.

Not for inflation, not for the improved mileage of the current fleet, and not for the fact that people are driving less.

That’s why this bipartisan proposal from Sens. Bob Corker, R-Tenn., and Chris Murphy, D-Conn., to raise the federal gas tax by 12 cents over two years and then index it to inflation struck me as uncharacteristically bold and sensible.

To be sure, their idea has a serious flaw in that it foolishly includes other tax cuts so as to meet the “no new taxes” pledge to uber-lobbyist Grover Norquist. But in these gridlocked and benighted times, when partisans come up with an idea that’s even partially smart, it should be viewed as an opening salvo over which policymakers should immediately start haggling.

The White House, however, quickly said no. From Marketwatch:

“White House spokesman Josh Earnest said the Obama administration is on record as opposing a hike in the gas tax. Asked at the daily briefing if this meant that the White House still opposed the idea, he answered: ‘Correct.’ 

It’s not hard to come up with reasons for their opposition. They may have correctly surmised that this wasn’t going anywhere in the House, so why invoke anti-tax sentiment?

They may have been spooked by the fact that it’s a regressive tax, in that it hits less-well-off drivers harder than the wealthy.

But while those are solid rationales, they are trumped by the fact that this is the simplest, most direct and most effective way to finance the trust fund, and not just for the next few years, but, thanks to the built-in inflation adjustment, for the longer term.

It’s also a tax on carbon, and in that sense it is completely in sync with the administration’s environmental agenda.

No one in their right mind believes we can maintain a productive, world-class infrastructure on a gas tax untouched since 1993.

Leadership thus demands that reality-based policymakers — and I usually put the president solidly in that category — take a stand and make this case to the public, especially when there’s at least a patina of bipartisan support behind you.

To fail to do so is to park your car at the corner of Dysfunction Junction, right near the giant pothole.

Jared Bernstein, a former chief economist to Vice President Joe Biden, is a senior fellow at the Center on Budget and Policy Priorities. jaredbernsteinblog.com

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