What’s going on with the transportation bill? Nobody knows. The two biggest players are saying nearly contradictory things.
Jim Oberstar and others on the Transportation Committee want go full speed ahead with a new bill, an outline for which Oberstar released yesterday (details here). Secretary LaHood says let’s pass an 18-month extension of the current bill, get some reforms written in there and then shoot for a new bill in 2011, by which time maybe we’ll have figured out some way of paying for it.
Our take: We’d like to see a new bill passed this year. There is a momentum for reform now and who knows what the world will look like 2011. Maybe we’ll be under attack by gray goo. Maybe there will be a global goat flu pandemic. Or maybe we’ll be even more broke than we are today. Beyond that, the reason that we pass 5-year transportation bills is that big infrastructure projects take a lot of time and planning and state and local officials need certainty that the money will be there to pay for them at all stages. An 18-month bill and then as-yet-undermined bill after that don’t really accomplish that goal.The real problem here is money–that is, how to pay for a $500 billion transportation bill–and the reluctance by the man with lightening quick hands just to do what needs to be done thing and push Congress raise the goddamn gas tax (instead of demanding they don’t). Then we could pay for the new bill. But without any willingness to do that, we stand broke and facing a great deal of uncertainty.
It’s true that currently we’re getting our recession on in a big way. But effect of doubling the gas tax (taking it from 18 to 36 cents a gallon) would be very, very small on the broader economy. Natural market forces have a much greater impact on what people spend on driving. By contrast, if state and local governments start delaying and hesitating over infrastructure investment, that’s a bad scene in many respects and arguably a bigger drag on the economy than an extra couple of bucks when people tank up.
Then there’s the fact the Americans are fully willing to pay more taxes to fund infrastructure investment. In a recent poll by GOP pollster Frank Luntz, a stunning 81 percent of people said that would pay higher taxes to repair and upgrade our infrastructure. But for some reason our government doesn’t want to take us up on it. Raising the gas tax is a perfectly realistic policy choice now with pump prices still relatively cheap. At higher levels, we won’t have this option. Options are blessings — let’s not waste this one.