Cato Institute: Cut highway spending by $13B

The libertarian Cato Institute said Wednesday that lawmakers should cut federal transportation funding by $13 billion to solve an infrastructure funding hole that Congress is scrambling this week to address. 

Lawmakers in the House are expected to vote Tuesday to approve a two-month extension of a federal transportation bill that is currently scheduled to expire on May 31. 

Cato Institute Director of Tax Policy Studies Chris Edwards said Wednesday in a blog post on its website that Congress should look to cut spending instead of trying to figure how to pay for a longer extension of the measure when talks about infrastructure funding resume again in July.  

{mosads}“Everyone agrees that Congress should find a long-term solution to the funding gap,” he wrote.

“The best solution for the HTF is simple: cut annual spending by $13 billion to match revenues,” Edwards continued. “State and local governments are fully capable of funding more of their own highway and transit expenses. Congress can help the states by reducing federal regulations that boost transportation construction costs, such as Davis-Bacon and environmental rules.” 

Lawmakers attempted for months to find with a way to pay for a longer transportation funding extension that would have lasted at least until the end of the year, but they struggled to come up with the approximately $10 billion that would have been needed to pass such a measure.

Transportation advocates have complained that lawmakers have not passed a transportation package that lasts longer than two years since 2005. They say the shorter packages have left states unable to plan longer construction projects that are badly needed to improve the nation’s road and transit systems.

The problem has vexed Washington for the better part of a decade. The Transportation Department’s Highway Trust Fund takes revenue from the 18.4-cents-per-gallon gas tax, but the fuel levy has been weakened by improvements in car fuel efficiency.

Additionally, the federal government typically spends about $50 billion per year on transportation projects, but the gas tax only brings in $34 billion annually at its current rate. Lawmakers have turned to other areas of the federal budget to close the gap in recent years, but infrastructure advocates say the patches are insufficient.

Transportation supporters have pushed for an increase in the gas tax, which has not been raised since 1993. Lawmakers have been reluctant to ask drivers to pay more at the pump, however, and Republicans in particular have ruled a hike a non-starter.

The Cato Institute’s Edwards said Tuesday that lawmakers should focus instead on the other side of the transportation funding ledger.  

“Cutting HTF spending by $13 billion would be a substantial reform, but a reasonable one given the rise in HTF spending over the years,” he wrote. “The Interstate Highway System was essentially complete by the early 1990s, so you might think that federal spending would have fallen after that. Instead, spending ballooned between the mid-1990s and mid-2000s, and it has remained at an elevated level ever since.” 

Transportation advocates have resisted prior efforts to the federal government’s amount of infrastructure spending, arguing that the current level of spending is barely enough to maintain the nation’s roads and transit systems. 

Edwards disputed that analysis on Wednesday, however. 

“Cutting spending by $13 billion would be a good way to close the HTF funding gap,” he wrote. “It would bring real spending down to the more reasonable levels of the late Clinton years. And it would encourage the states to make more efficient investment decisions to meet their diverse transportation needs.” 

-This story was updated at 1:34 p.m. to clarify an earlier version.