Living within our means

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The priorities of the American Taxpayer have been and will be placed ahead of the unchecked desires of some in Washington [D.C.] to spend money that is borrowed … 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 high water.’” –Rep. John Mica (R-FL), chairman of the House Transportation and Infrastructure Committee, from a letter sent last week to Thomas Donohue, president of the U.S. Chamber of Commerce

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It’s being referred to as “blistering,” “scathing,” “vitriolic,” and “scolding,” this letter sent last week by Rep. John Mica (R-FL), (at right), chairman of the House Transportation and Infrastructure Committee, to Thomas Donohue, president of the U.S. Chamber of Commerce; a letter than in very blunt terms pours a big bucket of cold water upon the aspirations of many within U.S. to somehow reinvent, revitalize and ultimately expand our nation’s transportation infrastructure.

Mincing few words, Mica laid out the unvarnished truth that everyone knows but tries very hard to ignore: as a nation, we’re broke. In fact, we’re actually worse off that that; we’re in serious debt, with one of our major creditors a nation that is in many ways an economic, military and political rival to us.

This is position from which Mica launched his written “tirade,” as many also called it, against the biggest business lobbying group in the U.S. – a group that has long understood the dangers posed by unchecked deficit spending by the U.S. federal government, which is one of many reasons behind Mica’s overheated prose.

"Our years of excessive deficit spending are at an end and responsible Congressional leaders must make difficult decisions about achieving real and tangible priorities,” Mica wrote. “My primary priority is to produce a long-term re-authorization 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 Highway Trust Fund. As stewards of that fund, it is our responsibility to stabilize the fund to protect its budgetary treatment and existence.”

It is a sad state of affairs, Mica continued in his three-page diatribe, 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.”

The Highway Trust Fund, he continued, was at one time intended to be a true “user fee” system designed to benefit those it taxed. Yet now, Mica noted, 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,” he said.

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Reversing course on what’s been decade upon decade of deficit spending is one of Mica’s top goals as a U.S. Representative, and one he puts at the top of his list in terms of re-election priorities.

“In the past 15 months, the Administration, with Congress’ approval, is incurring more than $5 trillion in additional debt,” he’s stated – two years of budget deficits (last year $1.4 trillion and this year $1.5 trillion) plus more than a trillion dollars in bailouts and new spending programs.

“Having helped balance our Federal budget from 1998 to 2001, I know that it can be done. That is why my votes have not supported bailouts or deficit spending increases,” Mica continued. “If spending is not controlled, I am greatly concerned that not only will inflation hurt Americans, but both the value of our currency and our nation’s credit rating will also suffer.”

In particular, he warns that China recently bought another $17.7 billion of U.S. debt, bringing its total holdings to $895 billion – making it one of the U.S.’s largest creditors, with our nation’s total debt nearing the $15 trillion level.

If you think that’s bad, consider this: according to calculations by the Organization for Economic Cooperation and Development (OECD), just to stabilize U.S. debt levels – not even cut them – would require the federal government to turn what’s now a “primary deficit” of 7% of gross domestic product (GDP) into a primary surplus of 1.4%. That, however, in the words of Newsweek columnist Niall Ferguson, “would require DOUBLE the fiscal squeeze Greece needs to make.”

That’s a stark reality indeed, but it’s one many transportation experts believe needs to be recognized, if not accepted, by all the players involved.

“In my judgment it [the recent surface transportation bill draft] is a realistic proposal given the hand Rep. Mica has been dealt by the House Republican leadership, i.e. no deficit financing – not spending money we do not have,” C. Kenneth Orski, a noted public policy consultant and 30-year veteran transportation expert, recently told me.

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Orski (at right) – who served as associate administrator of the Urban Mass Transportation Administration under Presidents Richard Nixon and Gerald Ford and now publishes a transportation newsletter – added that giving states more flexibility, so that they rather than the federal bureaucracy can choose the investments, is a very sound idea in his opinion.

“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,” Orski pointed out in his publication.

“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,” he added.

These reforms include consolidating or eliminating some 70 programs that do not serve a federal purpose, he pointed out: 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 catalog of reforms,” Orski noted. “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 — 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.”

That’s good advice – and frankly, with our nation mired in so much red ink, it offers about the only affordable option where transportation infrastructure funding is concerned.

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