February 17, 2004

February 17, 2004 | News Releases on Smart Growth

President Bush Should Veto Wasteful Highway Bill, Analyst Says

WASHINGTON, FEB. 17, 2004-If Congress sends President Bush an expensive, pork-laden transportation bill-as now appears likely-he should follow through on his threat to veto it, says Ronald Utt, a budget expert at The Heritage Foundation.


 "The highway bill is a poster child for wasteful spending," Utt writes in a new paper released by the Washington-based think tank. "The final product will be loaded with thousands of pork-barrel items, million-dollar boondoggles that have nothing to do with improving mobility. If the president wants to persuade voters that he's serious about restraining federal spending, this is the place to start."


The president has proposed spending $256 billion over the next six years, slightly more than the $234 billion the highway trust fund will take in from federal fuel taxes over that period. The Senate's bill, passed Feb. 12 by a vote of 76 to 21, would cost $318 billion and calls for a complicated package of tax changes to make up the resulting deficit-a package the White House argues will add to the deficit and raise taxes. The House version would spend $375 billion and narrow the resulting gap by raising federal fuel taxes by 43 percent over the next six years.


"The federal highway program has become the country's largest spoils system," Utt says. "Spending and programs are increasingly designed and directed to reward influential constituents and senior members of Congress. Somebody has to apply the brake."


Especially, Utt says, when a veto could spark a much-needed reform of the nation's broken-down transportation policy. The numbers of licensed drivers, registered vehicles and miles driven have soared since 1970, but new road miles have increased by 6 percent. "The federal program has spent a staggering $700 billion in taxpayer money since 1970 and has little of value to show for it," Utt says.

He lays out several ways Congress can improve on this track record:

  • Stop wasting money. Every year, fuel taxes go toward programs or projects that have little or nothing to do with transportation, such as hiking trails, beautification, historic preservation, federal lands and covered bridges. Transit is the largest loss, misallocating funds from heavily used, cost-effective roads to expensive, underutilized transit systems that serve less than 2 percent of the traveling public.
  • Make greater use of tolls to fund transportation needs. With both state and federal highway programs pressed for funds to meet current repair and expansion obligations, some analysts have recommended that tolls be placed on some or all of the limited access highways and that the additional funds be used to maintain and improve those highways.
  • Broaden the use of privatization and public-private partnerships. Canada, countries in Europe and Asia, and a number of U.S. states have expanded and improved surface transportation for motorists and truckers at little cost to taxpayers or government budgets, because tolls paid by motorists service the debt used to fund the roads.
  • Rely on more innovative finance mechanisms. New legislation to reauthorize the highway program should allow partnerships to issue at least $15 billion in bonds in each of the six years of the bill. At $90 billion in bonds over the life of the next bill, this could bring the president's proposed total up to $346 billion in new money for transportation.
  • Turn back responsibility for roads and transit to the states. Under a "turnback" plan, states could collect and retain the federal excise tax of 18.4 cents per gallon and spend it on their own transportation priorities. They also would be freed from costly and counterproductive federal regulations, mandates and set-asides, and donor states wouldn't be compelled to subsidize the motorists and transit riders in recipient states.

Utt's paper can be found online at http://www.heritage.org/Research/SmartGrowth/bg1725.cfm.

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