I’m not very happy about the decrepit state of our roads, highways and bridges, especially when you consider that the cost of financing all of this is the lowest it has been in our lifetimes.
It perplexes me that the nation that developed the world’s first interstate highway system cannot seem to find an adequate way to finance basic maintenance, repairs and improvements.
The good news: Congress has approved a bipartisan deal for a five-year, $305 billion transportation bill. It earmarks badly needed money for the maintenance of the deteriorating transportation infrastructure.
The bad news is how bereft of intelligence and long-term thinking this congressional infrastructure funding deal actually is.
The Highway Bill, cobbled together as a monument to poor planning, is such a hodgepodge of funding that it is far more of a testimony to Congress’ incompetence than it is a victory for those who would get something done.
When President Dwight D. Eisenhower (and Congress) built the nation’s Interstate Highway System, he also created a way to fund the maintenance of its now 47,856 miles of roads: A simple user fee, collected through the sale of gasoline to automobiles, paid to the Highway Trust Fund.
The system should have been self-funding, without the need for any of the gimmicks we see today. But that federal excise tax on gas has not been increased since 1993 and it is not indexed to inflation.
Given that 22-year freeze, plus the increased fuel efficiency of cars in general and the rise of the Prius, Tesla and Volt specifically, the Highway Trust Fund has accumulated a shortfall of more than $70 billion since 2008.
Rather than raising the 18.4 cents per-gallon gas tax, Congress keeps coming up with short-term funding mechanisms and other sleights of hand that make no sense.
The absurdity du jour is a 100-year-old program the Federal Reserve used to attract member banks: The 6 percent, tax-free dividend paid to its members and primary dealers on the capital reserves the Fed required.
This anachronism certainly deserved to be reviewed, but not as part of the highway funding bill.
Nor should sales of the Strategic Petroleum Reserve be used to pay for highway maintenance; nor should “capturing” the Federal Reserve’s “rainy day fund” go into the Highway Trust Fund — but that was how this $300 billion, five- year deal was assembled.
It is Dr. Frankenstein’s creature, built from disparate parts of different government bodies to create what resembles a normal bill but really is an ungodly monster.
Blame Grover Norquist, of Americans for Tax Reform.
He has so terrified congressional Republicans about raising any tax, no matter how appropriate, that Congress can do its work only in these absurd, backward ways.
Despite the good this bill can do, it stands as an admission of political failure.
Barry Ritholtz is a Bloomberg View columnist.