Mr. President, I come to the floor to ask my colleagues to support the Bond-Reid amendment to S. Con. Res. 23 which increases funding for highways to $255 billion and increases funding for transit to $56.5 billion. The amendment does not…
Mr. President, I come to the floor to ask my colleagues to support the Bond-Reid amendment to S. Con. Res. 23 which increases funding for highways to $255 billion and increases funding for transit to $56.5 billion. The amendment does not assume a tax increase. Nor do I take lightly that I am asking my colleagues to increase spending. Let me be very clear on this next point. This amendment does not have to mean deficit spending. There are choices we as a body can make to offset the increased spending. I share the same reservations that many of my colleagues do about deficit spending.
Normally, I would be down here urging you to vote against any such amendment. I would like you to consider the following before you make up your mind on this amendment.
The primary purposes of federal spending are to support a strong national defense and to invest in and maintain a strong national infrastructure.
Unfortunately, we are coming out of an extended period in which we neglected defense spending and we are now having to play catch up. During the Clinton Administration, 1993-2001, defense spending was $407 billion under the rate of inflation. Yet during that same period, government spending increased. This increased spending went to domestic programs. I personally believe that, given this wartime environment, those domestic programs should now shoulder an across the board cut. I am not here to make that argument today, but rather to discuss the importance of increased transportation spending.
Projected highway trust fund receipts do not support the level of spending in the amendment. However, we need to be honest in our analysis and recognize that the lag in trust fund receipts is temporary because of a slow economy and a sharp increase in the cost of fuel. Once the economy recovers and gas prices stabilize, receipt will increase above the current projections. Additionally, we need to get the revenue currently lost to the trust fund from users of the system who do not pay their fair share.
As much as it pains me to say this, this budget resolution fails to provide sufficient funding to maintain our nation's infrastructure, much less improve it. The Federal Highway Administration's, FHWA, recent 2002 Status of the Nation's Highways, Bridges, and Transit: Conditions and Performance report states the following:
. . . maintaining the overall conditions and performance of
highways and bridges at current levels would require
significantly more investment by all levels of government. .
. . the average annual investment [needs] to be . . . 17.5
percent larger.
The resolution before us sets spending at $30.5 billion in FY04, increases it to $35.1 billion in FY05 and then flat lines it at that level through FY09, for an average investment of $34.3 billion per year. This represents a significant shortfall of over $80 billion from 2004 to 2009 to simply maintain the existing system.
Again, quoting from the Conditions and Performance report:
Despite the historic investments in highway infrastructure
and improving conditions on many roads and bridges,
operational performance--the use of that infrastructure--has
steadily deteriorated over the past decade. In 1987, for
example, a trip that would take 20 minutes during non-
congested periods required, on average, 25.8 minutes under
congested conditions. By 2000, the same trip under congested
conditions required 30.2 minutes, or an additional 4.4
minutes.
Colleagues, this resolution simply does not adequately address the needs. The Bond-Reid amendment sets a reasonable spending level of $39.2 billion in FY04 and moves us in a direction that at least maintains existing infrastructure.
My colleagues on the Budget Committee will argue that this amendment breaks the link between user fees and highway spending because it does not assume an increase in gas taxes. That is not correct. We can pay for this increased spending as I will outline. In the final analysis, the relevant Committees and this body will determine the best ways to pay for this amendment if we choose to do so.
I will now talk about how we can increase spending on transportation and pay for it without increasing the deficit.
First, the trust fund needs to be reimbursed the $8 billion in highway user fees that were transferred to the general fund during the drafting of TEA21. Those were dollars paid by highway users and should be used on highway infrastructure. This is a moral issue. When the motorist pays the gas tax at the pump, they rightly expect that the dollars they pay in taxes will be used for transportation infrastructure. We broke faith with them when we allowed the $8 billion transfer to the general fund.
Furthermore, we as a nation have made some policy choices to encourage the use of certain fuels that cost the highway trust money. Most of us understand that the 5.2 cent tax incentive for ethanol use comes directly from the highway trust fund because ethanol users do not pay the full 18.4 cents per gallon. I believe most would agree that the highway trust fund should be compensated for this amount which is estimated to be over $9 billion. A vehicle that uses an alternative fuel creates the same wear and tear on the system as a gasoline powered vehicle.
Additionally, there is a national policy to encourage the purchase of hybrid and electric vehicles. While these vehicles address an important policy goal of promoting clean burning transportation, they also cost the highway trust fund money. They either pay a limited amount of fuel taxes because their vehicles are hybrids, or in the case of electric vehicles they do not sue gasoline at all and thus do not pay anything into the highway trust fund. Yet the highway trust fund is expected to
pay for the infrastructure for their use. Currently there are 640,000 hybrid vehicles on the road. It is estimated that by 2009 there will be 5 million. This is going to be a real problem in the future in terms of how we fund transportation infrastructure. It is irresponsible to not address this before it becomes a crisis. We need to work now on coming up with a fair mechanism whereby the highway trust fund is compensated for these vehicles using the highway system. I believe that could result in up to $10 billion of new revenue into the trust fund.
Indexing the current gas tax to inflation would result in about a one-half cent increase per year and yield $17 billion from 2004-2009.
Additional options include:
Interest on the trust fund cash balance--$3 billion plus;
Fuel Tax Evasion Measures--$6 billion;
Lost interest on the $8.1 billion transfer--$2 billion;
Retroactive Interest on TEA-21 cash balance, 1991-2003, $4.5 billion;
Bonding--$30 billion, American Association of State Highway Officials;
Clinton Gas Tax Increase Paid into General Fund--over $40 billion.
On this last option, I realize it is not feasible, but that doe not take away the fact that this money belongs to the highway trust fund.
Added together, these ideas generate more than enough to offset the increased spending proposed by this amendment.
Again, I oppose deficit spending and will not ask my colleagues to do so. If I did not believe that there was a way to get this spending without increasing the deficit, I would not be down here today asking you to vote for it. Personally, I support across the board cuts to pay for the amendment, but again, I recognize others do not share my feelings on this and so I have given several very viable options from which to choose.
Finally, I realize that in times of economic downturn and the war, Senators are hesitant to further increase spending. I don't think my reputation around here is that of someone who goes out of his way to increase government spending. I would hope that most recognize that I am a strong advocate of slowing down the rate of government spending and in most cases I favor cutting spending. In this instance, I believe it is the right thing to increase spending because we cannot strengthen our economy unless we have an efficient transportation system. In order to improve our transportation system we need to invest significantly more than is assumed by this budget resolution.
Today's vote is the first step in drafting a bill that will govern how and where our transportation dollars are spent. If we short change ourselves today we won't get a bill that improves transportation or adds to the national economy. I ask you give the Environment and Public Works Committee the head room we need to write a bill.
Support the Bond-Reid amendment and know that it can be done without increasing the deficit by using some of the above mentioned options.