How Congress can create jobs, reduce uncertainty, and repair roads in one fell swoop
It's called the Highway Trust Fund, and it's running out of money
As our political class works itself into a froth over a 10th-tier issue, yet another critically neglected problem is reaching full boil. This time it's the Highway Trust Fund, the source of much of our nation's funding for maintaining roads and bridges. The fund gets its money from the gas tax, but the tax hasn't been raised since 1993, and revenue has dried up due to inflation and the proliferation of fuel-efficient vehicles.
Congress shows no sign of doing anything about this, and the money is going to start running short in August. This is not just about fixing infrastructure — one of the major reasons for finding a permanent solution to the fund's finances is the prospect of economic uncertainty, a longstanding conservative bugaboo. If we want to reduce some major economic uncertainty at a stroke, as well as provide some badly needed jobs and infrastructure repair, this is one quick and easy way to do it.
So why is this creating uncertainty? As Nancy Remsen explains at The Burlington Free Press, states like Vermont are unsure whether there will be a "a continual stream of federal payments" to finance a slate of scheduled infrastructure projects.
In other words, a whole slew of complex and expensive construction projects across the nation are going to be disrupted, delayed, or halted. And with a restoration of funding depending on a do-nothing Congress, stalled by the GOP's obstreperous opposition, we could end up waiting for a long time. (Incidentally, this herky-jerky method of funding also makes projects more expensive, since it costs a lot to get a project stopped or started.)
Of course, there's a greater fallout beyond inconveniences to state transportation departments. Regular old citizens and businesses depend on transportation as well, as even the GOP used to realize. I'm old enough to remember the glory days of 2009, when Republicans drafted a stimulus plan including $114 billion in infrastructure spending. (Not to mention Eisenhower's Interstate Highway System, which by some measures is the most expensive public works program in history.)
As Paul Krugman explains, this problem would take 10 minutes to solve in a country with even a nominal commitment to maintaining decent infrastructure. You could raise the gas tax a bit, and index it to inflation so we don't have to keep going through this pitiful song and dance every time disaster looms. Or, if we don't want to raise taxes, just borrow the dang money! The deficit is falling like a stone (another epic disaster) and interest rates are low, which means we could easily stand to top up the fund for a decade or two with borrowed money.
Since the 2008 crisis, conservatives have repeatedly argued that policy uncertainty is what is behind economic weakness. I've always seen that argument, in line with Michal Kalecki, as an attempt to keep economic power out of the hands of government and in the hands of the capital, even at the price of enduring a prolonged recession. But should conservatives feel like demonstrating their certainty bona fides, they've got a golden opportunity. All they have to do is restore highway funding to about traditional levels.