Trust or bust: Fixing the Highway Trust Fund

(On August 8, 2014 H.R 5021 became law supporting transfers of General Funds into the Highway Trust Fund (HTF). This provides authorizations for transit, highway and highway safety programs to be funded through the end of May 31, 2015.)

The Committee for A Responsible Federal Budget

…Highway spending has exceeded gas tax and other dedicated revenues regularly over the past decade, and this shortfall will only grow over time. Dedicated revenues currently fund less than three-quarters of total HTF spending, a concern that lawmakers have addressed in recent years by transferring $54 billion of mostly general tax revenue into the HTF (only $15 billion was paid for and partially with a gimmick). In FY2015 alone, highway spending could exceed revenues by nearly $15 billion, and over the next decade that gap will approach $170 billion.

There is broad bipartisan support for funding highways and other transportation infrastructure, which can both help to create jobs in the near-term and enhance long-term economic growth by fostering commerce, communication, tourism, and trade. Unfortunately, policymakers have so far been unable to agree on how to pay for desired levels of highway spending. In the coming months, Congress and the President must identify and agree to a fiscally responsible solution to close the HTF shortfall.

The best approach to address the shortfall would be a long-term highway bill that aligns dedicated revenues with transportation spending. Transferring funds from general revenue into the HTF would be an acceptable alternative if and only if those funds were fully offset with real spending cuts and/or tax increases elsewhere in the budget.Under no circumstance should lawmakers rely on a deficit-financed (or gimmick-financed) general revenue transfer to fund the HTF.

In addition to addressing the funding shortfall facing our highways, policymakers should use the highway bill to ensure better prioritization of funding projects and, importantly, to reform the budgetary treatment of highway spending. The HTF has a unique treatment in the budget, making it immune to the normal forms of budget discipline that ensure policymakers account for the full costs of legislation they pass… (more) (NOTE: Options for savings within the HTF as well as to offset General Revenue transfers are listed later in the article.)

12 Days of Budget Policy Riders: What Congress Gave Away in the Cromnibus

National Priorities Projectxmastree_large
(Photo courtesy of Flickr)

In the spirit of the Twelve Days of Christmas, here are twelve of the more bizarre or outrageous early Christmas gifts to special groups that lawmakers delivered through policy riders in the 2015 federal budget bill known as the Cromnibus:

  1. Provided a tax deduction targeted specifically to Blue Cross Blue Shield (which is never actually named) to offset costs the company may incur under the Affordable Care Act
  2. Exempted cattle farmers from reporting and permitting requirements for greenhouse gas and methane emissions (a major source of greenhouse gases)
  3. Ordered a study of small business classifications for providers of military footwear after an outcry about rule changes from Michigan lawmakers, where military footwear supplier Bates is located
  4. Made white potatoes eligible under Women, Infants and Children (WIC) food benefits, in a giveaway to potato farmers
  5. Reopened the door for U.S. government entities (OPIC and the Export-Import Bank) to fund foreign coal plants, providing a win for U.S. coal exporters and reversing an earlier rule change
  6. Prohibited the Environmental Protection Agency from enforcing the phase out of inefficient incandescent light bulbs that was signed into law by President George W. Bush as an energy efficiency measure
  7. Allowed schools to get around sodium and whole grain requirements for school lunches, delivering  win for “big food
  8. Prohibited classification of the greater sage grouse as an endangered species for the rest of the year, delivering a win for would-be developers in the bird’s habitats
  9. Overturned Washington D.C.’s voter-approved decriminalization of marijuana, delivering a win for marijuana legalization opponents
  10. Relaxed rules under Dodd-Frank financial regulation that require banks to separate their consumer-based, FDIC (Federal Deposit Insurance Commission)backed business from trading in financial derivatives
  11. Raised limits on campaign contributions to political parties by ten times
  12. Prohibited government from requiring businesses to disclose their political campaign contributions when applying for federal contracts – and a House summary of the bill lists this under “Good-Government Provisions”

These are but a few examples of what happens when Congress budgets behind closed doors instead of properly passing a budget that actually reflects Americans’ priorities. Maybe lawmakers’ New Year’s Resolution could be to do it differently next year.

Nearly $1 billion in Katrina, Rita aid under scrutiny

More than nine years after hurricanes Katrina and Rita decimated parts of Louisiana, the state has identified nearly $1 billion in federal housing aid where recipients failed to comply with the rules, Legislative Auditor Daryl Purpera said Monday.

Purpera said the problems were discovered by the state Division of Administration. They totaled $939 million and involved 15,095 homeowners.

That is on top of $75 million in questionable costs identified earlier.

In addition, the auditor said his own office’s review of 45 homeowners who got the aid showed that 10, whose awards totaled nearly another $1 million, failed to provide adequate evidence that they were complying with regulations.

That means they failed to offer proof that the home was being repaired or evidence of flood or other insurance, among other things.

The problems could put the state on the hook to repay money to the federal government, Purpera said. (more)

Government grants…There is no “free” money

The Rochester Sentinel
Voice of the People

There is no free money

Federal grants. State grants. It seems like you can’t read the paper without seeing reference to government grants being sought and received. Recently this has been the case for our area: the Rural Business Enterprise Grant from the USDA announced in the Dec. 17th Sentinel, the revitalization of downtown Rochester, the development of the Nickel Plate Trail and many other projects of recent years. I wouldn’t be surprised to learn that a grant is sought and received for the Times Cinema restoration.

This is not unique to the Fulton County area. Recently the town of Seymour in southern Indiana received a state grant of about $800,000 from the Indiana Department of Transportation to erect a welcome sign on the edge of their community. No doubt the seeking of grants is occurring throughout our country. It is always easier to spend someone else’s money even though we’re fooling ourselves when we think this is the case with government grants.

The issue is not the projects but rather the means of funding them. We send money via a bunch of different taxes to Indianapolis and Washington D.C. and if “lucky” some of it is returned as grants along with a lot of bureaucratic red tape and stipulations to receive the grant and administer it. Our country has amassed a federal debt of more than $18+ trillion. There is no “free” money.

One of the most frequent uses of government grant money is the creation of walking and biking trails. This grant money comes from gas taxes. Yes, tax money for the maintenance and repair of roads, highways and bridges is being diverted to trails. Again, the issue is not the project but how it is funded. A favorite phrase of those who advocate for the grants is “enhancing the quality of life.” Make no mistake, this is a sales pitch.

It is a matter of priorities and when spending your own money, i.e. at the local government level, a mindset of priorities will quickly come to the fore. If it appears to be “free” money, i.e. from the state or federal government, then the concept of “priorities” quickly disappears.

This matter and other Fulton County as well as Indiana and national government topics are being explored at, a recent project created to inform my fellow citizens.

Russ Phillips

Those Pension Cuts and What You Need to Know

Congress recently carved a hole in a 40-year-old pension law that has prevented employers from cutting benefits earned by those already retired. This change applies to people covered under multiemployer plans that are in critical financial shape.

Here’s what you need to know:

What is a multiemployer plan? This is a pension covering workers and retirees from more than one employer in the same or related industries, such as trucking or construction. (Most of them were established under collective bargaining between a union and the employers.) There are about 1,400 multiemployer plans with 10.4 million participants… (more)