Kicking the can down the highway
There are solutions and there are compromises.
And then there is government accounting and the Federal Highway Trust Fund.
No sane American should have expected a long-term fix to the shrinking highway fund during an election year. The painful truth is the gasoline tax has to go way up from its 1993-level of 18.3 cents per gallon to face higher costs during the past 20 years and more efficient vehicles using less gas and driven fewer miles, or a new method of paying for the nation’s roads must be found, such as a vehicle-miles-driven tax or an annual road user fee for every vehicle.
Still, creating a crazy government-accounting system that allows businesses to act just like the federal government on the backs of workers’ pension plans while also failing to find a long-term fix for keeping the nation’s roads up to date is plain “electioneering” at its best.
The system that passed the House of Representatives Tuesday allows for companies to underfund pensions now and pay more taxes now, which would go toward keeping the highway trust solvent. In the later years of the 10-year plan, they’d put more into pensions and pay less tax, bringing the insolvency problem back to the highway trust fund.
Costs for projects would be even higher and the system still would be operating like it’s 1993.
And, some companies that underfund their pensions might be unable to catch up, meaning they could end up pushing their pension liabilities onto the federal (read: taxpayer-funded, just like highways) Pension Benefit Guaranty Corp.
It’s a win-win for politicians in that they get to keep the lights on at the federal highway department while failing to tackle the thorny issue of raising taxes of one form or another to continue to keep the nations’ roads smooth and its bridges safe, let alone adding more to the road network. Both sides can accuse the other of failing to plan or failing to do something. Indeed, President Barack Obama is bashing Congress for inaction as Republican leaders are asking where his plan might be already this week.
But it’s a lose-lose for taxpayers, who still must foot the bill today or 10 years from today for the roads we use, while facing the potential of their pensions drying up in the meantime.
Sounds like the perfect compromised solution, through pay for today what we can’t pay for tomorrow government accounting.