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Chairman Mica Passes on the Offensive

Posted by Ken Orski on Saturday, July 16th, 2011

Innovation NewsBriefs

Vol. 22, No. 19

In a blistering letter to Thomas Donohue, President of the U.S. Chamber of Commerce, Rep, John Mica, Chairman of the House Transportation and Infrastructure Committee, scolded the Chamber — and indirectly other critics of the proposed House transportation bill— for being “unable to recognize the reality that bankrupting the Highway Trust Fund and ignoring long overdue policy reforms are no longer options.”

“Our years of excessive deficit spending,” wrote the clearly angered Chairman, “are at an end and responsible Congressional leaders must make difficult decisions about achieving real and tangible priorities. My primary priority is to produce a long-term reauthorization bill to provide states with the certainty they require for large-scale infrastructure planning, and instituting reforms to existing programs… A continuation of deficit spending and General Fund transfers will destroy the dedicated user-fee based Trust Fund. As stewards of that Fund, it is our responsibility to stabilize the fund to protect its budgetary treatment and existence.”

Nor did Rep. Mica mince any words in stating his opinion of the Washington lobbying establishment and liberal advocacy groups which have been lukewarm at best about the proposed bill (for a sample of opinions, see this week’s National Journal Transportation Experts blog, www.transportation.nationaljournal.com). “The American people,” Mica wrote, “sent a clear message in electing a U.S. House to change the way business is conducted in Washington. Thanks to recent and coming elections, the priorities of the American Taxpayer have been and will be placed ahead of the unchecked desires of some in Washington to spend money that is borrowed to support our Treasury. This new reality has proven to be frustrating for some in Washington who even fail to consider positive alternatives for supporting transportation projects and simply resort to deficit spending ‘come hell or highwater.’”

It is a sad state of affairs,” the Chairman concluded, “that the U.S. Chamber of Commerce cannot express in a positive fashion the need to do much more for our nation’s infrastructure than just spend more taxpayers dollars. … The House Rules and the Congressional Budget Act place limitations on the ability to spend beyond the receipts of the Trust Fund. It is unfortunate that the leadership of the U.S. Chamber of Commerce still does not recognize that the American people have rejected excessive deficit spending and tax increases as a means of avoiding the difficult choices that come with real and necessary reform.”

In his three-page letter the Chairman also expressed concern with what he believes is the growing adulteration of the federal-aid highway program. The Highway Trust Fund, he wrote, was at one time intended to be a true ‘user fee’ system designed to benefit those it taxed; yet it has evolved over the years into a slush fund with less than 65% of its receipts dedicated to those paying the gas tax and much of that remaining money funneled into federally-mandated programs that states and localities were not ready to pay for themselves. Continued support of these inflexible mandates that have depleted the Highway Trust Fund by diverting the limited transportation resources is “unproductive and misguided at best.”

The letter shows a Congressman who is clearly angered and unhappy about the barrage of what he considers to be unjustified and unfair criticism that greeted the release of his summary proposal. He is angered with critics who declare his Committee’s proposed level of funding as “unacceptable” or “grossly inadequate” but are unable to suggest any steps that would add money to the program; and he is unhappy with the Democratic minority of his own committee who refuse to recognize the constraints the chairman has worked under, viz. the House rules that forbid approving any new transportation funding that would add to the deficit.

Preemptively, Mica also dismissed Sen. Barbara Boxer’ proposal for a two-year bill as a “recipe for bankrupting the trust fund.” Such a bill, Mica contends, would not only quickly drive the trust fund deeper into insolvency but deprive states of the funding stability and predictability they need to plan major multi-year projects. And indeed, to our knowledge, there have been few voices raised at the state level in support of the Boxer proposal. “I would rather have less money and the assurance of long-term funding predictability,” one senior state DOT official told us, ” than kick the can down the road in the hopes of getting a higher level of funding two years from now.”

Nor is it clear how the $109 billion measure proposed (but not yet formally introduced) by Sen. Boxer is to be funded, since only about $70 billion ($35 billion/year) is expected to be credited to the Highway Trust Fund over the next two years, according to the Congressional Budget Office. The Senate Finance Committee, the final arbiter of the funding level, has yet to be heard from. Informal indications point to internal disagreements that have not yet been resolved.

Rep. Mica also questioned the purported job-creating potential of the Senate bill touted by Boxer. As President Obama himself admitted, “the shovel-ready projects are not as shovel- ready as we had thought.” Of the $63 billion authorized for transportation infrastructure projects within the President’s stimulus bill two years ago, 39 percent still remain unspent, Mica noted. What is more, it seems that a majority of Americans want the government to make deficit reduction the No. 1 priority even if that results in slower economic recovery, a new McClatchy-Marist poll has found.

By focusing on the limited overall funding level, which in the current political environment is all but inevitable, critics tend to lose sight of the programmatic reforms that Mica has introduced and steered through his committee. While the detailed legislative proposal has yet to be released, we do know that the proposed legislation contains many of the reforms that the transportation community has sought for many years. These reforms include consolidating or eliminating some 70 programs that do not serve a federal purpose; streamlining the project delivery process and setting hard deadlines for federal project approval; holding grantees accountable for performance; abolishing federal mandates for peripheral “enhancement” activities (but permitting states to fund them on their own if they so choose); expanding the TIFIA loan program; encouraging states to create State Infrastructure Banks to finance transportation investments at the state level; and encouraging private investment in transportation facilities.

That is an impressive catalogue of reforms. And so, instead of endlessly bemoaning “grossly inadequate” levels of funding in the House bill — the most money that the nation can prudently afford to spend on infrastructure at this time— the transportation reformers would do well to muster their energies and influence to convince the Congress to act now rather than later and not let the opportunity slip by to enact the transportation reforms that they have so ardently been championing.

C. Kenneth Orski is a public policy consultant and former principal of the Urban Mobility Corporation. He has worked professionally in the field of transportation for over 30 years, in both the public and private sector. He is editor and publisher of Innovation NewsBriefs, now in its 22nd year of publication.

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