How bad is the Highway Bill? Steve Moore at the WSJ writes:
"Congress is expected to approve as early as today a $120 billion highway bill that compromises nearly every budget principle Republicans say they believe in. It's a bipartisan budget heist with billions of dollars of budget gimmicks that are likely to infuriate Tea Party activists and other fiscal conservative voters.
In order to avoid confrontation with the Senate and to get the highway pork rolling by July 1, House Republicans caved to Senate Majority Leader Harry Reid on nearly every demand. Republican reformers in the House had originally sought to give more power and flexibility to the states on road projects, repeal onerous environmental rules that inflate the cost of federal construction projects, and curtail funding for wasteful urban transit projects. They also wanted the Keystone XL pipeline built and a shortfall in road funding to be covered by royalties from increased oil and gas drilling on federal lands. Virtually none of these provisions survived.
Without the drilling money the bill elevates fiscal accounting hocus pocus to new heights. For example, it pays for 27 months of road funding with 10 years of budget savings and revenue measures. Isn't that exactly the trick ObamaCare used for financing and that Republicans denounced? As Marc Scribner, transportation expert at the Competitive Enterprise Institute notes, "this just makes the funding problem even worse two years from now when a new highway bill has to be passed. It's just a bunch of phony pay fors."
Highway bills are supposed to be financed with gas tax money, but because Congress wanted to spend so much more than is collected and didn't want to cut spending or raise the gas tax, Mr. Scribner calculates that the bill is a $20 billion raid on the general fund (which is $1.2 trillion in deficit) to pay for the spending programs. This makes the deficit worse. The bill "saves" some $3 billion by raiding various non-transportation trust funds with unspent dollars. It spends about $8 billion on obsolete transit projects (less than three percent of trips are taken on mass transit), thanks to an unholy alliance between big city Democrats and suburban Republicans.
Worst of all is the $9 billion pension gimmick. The bill "saves" $9 billion by reducing the required corporate contributions to pension funds. This will raise income-tax revenues for the government because pension contributions are tax deductible. So businesses will have fewer tax deductions under this scam and pay more tax. But the Pension Benefit Guarantee Corporation estimates these corporate pensions are $26 billion underfunded already. They should be contributing more, not less to the fund. And guess who is on the hook for underfunded pensions? Taxpayers.
Oh and did I fail to mention the spending bill also extends the low interest rate on student loans, again with no reforms to bloated and unaccountable universities? The evidence is clear that more subsidies through federal aid only increase tuition. This provision adds $6 billion to federal spending.
Polls are showing that many voters don't think it matters which party wins Congress or the White House in 2012. It's bipartisan spending raids like this that convince voters that there ain't a dime's worth of difference between the two parties."
Tea Party WDC