“NO” on $317B, 6-year highway and transit bailout (H.R. 22)

This week, the Senate will consider the Developing a Reliable and Innovative Vision for the Economy (DRIVE) Act (H.R. 22).  The 1,000+ page bill would reauthorize highway and transit programs for six years while increasing spending, revenue and deficits.  It would authorize $317 billion over six years for core highway and transit programs.  Senate Majority Leader Mitch McConnell also promised the bill would serve as a vehicle to resurrect the now-expired Export-Import Bank.

The federal highway program is fundamentally broken, and the Senate’s approach would lock in the status quo for another six years. It does nothing to reform the bloated, unsustainable federal highway and transit system. The bill simply kicks the can down the road, masks its irresponsible nature with gimmicky offsets, and creates bigger “cliffs” for lawmakers to tackle in the future.

One of the most concerning elements of the bill is the nature of the supposed pay fors. The bipartisan legislative summary proclaims the bill “does not increase the deficit or raise taxes,” but the bill only bails out the bankrupt federal Highway Trust Fund for three years.  Within that three-year period, just 10% of the bill’s $47 billion in offsets come in the form of real spending reductions .

  • Seven separate “tax compliance” measures would raise nearly $7.8 billion over the next decade.
  • Four separate “fees & receipts” changes would raise $25.7 billion over the next decade.
  • Selling 101 million barrels of crude oil from our nation’s Strategic Petroleum Reserve would net $9 billion over the next decade.

Near-term deficits will increase because of this deal, since all of these pay fors are spread out over the next decade, while the spending increases occur over the next three years.  Additionally, the bill essentially assumes oil will sell at nearly $89 per barrel while current prices hover around $50 per barrel.

The bipartisan legislative summary brags that the bill “provides six years of increased funding.”  Ironically, the so-called DRIVE Act would increase spending for public transportation by $2 billion. It would also create a new “national freight program” that would grow from $1.5 billion in fiscal year 2016 to $2.5 billion in 2021.

Finally, the bill will likely be amended to include language that would re-issue the Export-Import Bank’s now-expired charter.  The bank is not needed; its largest beneficiary – Boeing – is thriving in a post-Ex-Im world.  Earlier this week it signed a 50-plane deal with FedEx, ensuring a steady line of production for its 767 cargo aircraft through FY2023.

The Senate’s highway and transit bill would increase spending, revenues and deficits, and may ultimately salvage a slush fund for corporate welfare.

Heritage Action opposes H.R. 22 and will include it as a key vote on our legislative scorecard.