A Highway Bill We'll Regret
It doesn't come cheap.
Credit where it's due: After 10 years, much haggling and several dozen failed attempts, Congress now looks likely to pass a long-term highway bill. It will finally shore up America's ailing roads and bridges. It will sensibly revive the U.S. Export-Import Bank. It even takes a firm stand against automated traffic tickets.
The bad part -- you knew there was one -- is that the bill's $305 billion cost is paid for with an unholy admixture of gimmicks, artifice and bad ideas. And it leaves finding a long-term solution to this perennial problem for another day.
Some of the funding measures are one-time-only stunts, such as selling off millions of barrels of oil from the Strategic Petroleum Reserve, while assuming each will fetch roughly double the current price. Others are aspirational, such as hoping private contractors can somehow bolster tax collection.
More pernicious are the measures that could set a precedent. For instance, raiding the Federal Reserve's surplus seems like a seductive entree into monetizing government spending. Reducing the dividend paid to big banks for their shares in the Fed system, arbitrary in its own right, also seems like a harbinger: Once banks can be plundered to pay for roads, why not for everything else?
What all these funding schemes have in common is that they have nothing to do with transportation. The traditional way of paying for highways and bridges has been through the federal gas tax -- a sensible user fee on drivers that hasn't been raised since Bill Clinton's first year in office. This time around, Congress should've simply boosted that tax modestly and indexed it to inflation. Simplicity, alas, isn't a legislative specialty these days.
Now inflation will continue to erode the buying power of the federal gas tax. Vehicles will continue to grow more fuel-efficient. And new technology, such as driverless cars, could upend gas consumption and driving patterns in unpredictable ways. So when the gags and gimmicks in this highway bill expire, the underlying problem of how to pay for the country's transportation needs will only have gotten worse.
That means Congress will have to think about a serious and sustainable revenue source for the 21st century. One promising option is a vehicle-miles-traveled tax, in which cars would be fitted with technology that tracks their mileage and drivers billed directly for their road use. This would uphold the principle of a user fee, and collect revenue from the growing number of cars that don't use gasoline. It could also easily be adjusted based on location, traffic and time of day to charge drivers more during peak congestion.
That technology still needs a lot of work. But it's a far better approach to transportation spending than raiding the financial industry or arbitrarily selling off government assets. As Congress ponders how to pay for the next bill, five years on, this one should stand as an exemplar of what to avoid.
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