Re-funding transportation

How money is parceled out to road and bridge projects is only part of Washington’s problem.

Whether there is enough money to share is vitally important.
Congress has approved transferring $8 billion from general revenue into the fund that pays for the nation’s roads and bridges.
Without that extra funding, Washington would have to delay payments to the state for transportation work. The transportation fund was so close to broke that disruption of payments could have come as early as this month.

Of course, some people do not consider the funding infusion to be “extra.” They say the federal government is just paying back what it took from transportation — and not a moment too soon.
In the early to mid-1990s, reduction of the federal debt and deficit took root as one of the major issues of the day — it was, in fact, a major theme of independent presidential candidate Ross Perot in 1992. A Republican Congress was elected in 1996, and by 1998, the issue had grown sufficiently powerful to produce comprehensive deficit reduction.
But deficit reduction wasn’t accomplished simply by cutting federal programs or (no surprise here) raising taxes. Instead, in an accounting sleight-of-hand, money for the general fund was “borrowed” from other funds, including what was then a surplus in the transportation fund.
Politically, this in turn led to one of the campaign themes of Democrat Al Gore in 2000: the need for a “lock box” to protect dedicated funds from such raids —although his concern was more for the Social Security fund than for transportation.

But now the transportation fund is nearly broke, and states are faced with the prospect of stopping work on construction projects. That in turn would put nearly 400,000 workers out of their jobs nationwide.
In the midst of this economic downturn, more joblessness is not good for the economy — not to mention for the hundreds of thousands of men and women who would be thrown out of work and for the people who depend on them.

At the same time, as the federal government has pledged to back up Fannie Me and Freddie Mac, committing another $8 billion adds to the current financial burden.
That’s why the money never should have been taken from the transportation fund in the first place.
Deficit reduction was a necessary effort; the burgeoning deficit and national debt put every American in hock.
But deficit reduction should have relied more on straightforward spending cuts to less critical programs, not “borrowing” from a fund that pays for transportation infrastructure, one of the most critical of functions.

It never seems “convenient” to pay back loans; we just keep pushing back the day of reckoning. Then the bill comes due — always at the most inconvenient time.
That’s true for the federal government today. With all its other obligations, paying back the transportation fund is not the easiest thing to do right now.

But it is the right thing to do.