Chairman of the House Budget Committee Rep. Paul Ryan (R-WI) claims in his budget proposal for fiscal year 2012 that the Department of Transportation can generate savings through consolidation of duplicative programs to fund our highway repair efforts at their current level. He cites a recent report from the Government Accountability Office to back up his contention but this is sloppy work on the congressman’s part since the GAO never said anything of the sort.
As our nation’s infrastructure crumbles due to federal disinvestment, the congressman asserts that his budget “anticipates that Congress can keep the Highway Trust Fund solvent without additional general fund transfers or increases in the gasoline tax by consolidating dozens of separate highway programs that GAO has identified as duplicative.“
That sounds great but it simply doesn’t add up. Rep. Ryan either has the math wrong or he’s proposing a drastic cut in federal highway and transit spending veiled with good government rhetoric.
Let’s go through the numbers. The Highway Trust Fund is the federal account that receives and distributes taxes dedicated for road, bridge, and mass transit repairs and improvements. That fund supports just shy of $50 billion in road, bridge, and transit expenditures.
Historically, all the funds for these programs have come from revenues from federal gas, diesel, and tire and other small taxes. But more than $19 billion in federal general fund resources in FY 2010 had to supplement the gas and other tax receipts to meet federal obligations for maintaining and improving our 4 million miles of highways and roads and our overburdened public transit and rail systems.
Lower gas tax collections account for the shortfall. In fact, the nonpartisan Congressional Budget Office finds that in real dollars federal investment for transportation infrastructure is 24 percent less today than it was in 2003.
The Department of Transportation spends about $550 million per year to administer the Highway Trust Fund program. If we could optimistically save 15 percent by consolidating this oversight of highway programs, about $82 million in savings would be generated and could be redirected to meet our road and bridge improvement needs. It would take a special brand of statistical wizardry, however, to extract $19 billion in savings from a $550 million administrative budget as Rep. Ryan proposes.
So perhaps the congressman’s true intentions are more devious. Without any reasonable way to generate the savings he proposes, the only way to balance the Highway Trust Fund is through drastic cuts in funds to repair our crumbling roads and bridges.
In his plan, Rep. Ryan extols the “inspiration” he received from the GAO on how to save money at DOT, which he assiduously notes by inserting a footnote to a GAO report. The GAO recommended a reworking of surface transportation programs to promote a “more goal-oriented approach to surface transportation, introduce greater performance and accountability for results, and break down modal stovepipes.” The report also recommended streamlining the application processes for three federal transit programs that provide funding for transportation-disadvantaged populations.
These GAO recommendations never referenced potential savings, though, because collapsing the programs will result in greater efficiency but not material savings.
Of course, consolidation of program oversight often makes sense. In fact, the administration proposed doing just that in the president’s 2012 budget by consolidating 55 highway programs into five streamlined programs and consolidating transit programs as well. Every dollar counts but it’s magical thinking to believe consolidation of $50 billion in programs will generate $19 billion in savings.
It’s heartening that plans to repair our infrastructure even made it on to the House leadership’s “to do” list. But it’s frightening that with 72,000 bridges in urgent need of repair, the best idea on the table is grounded in fantasy.
If you fall for the sloppy math, wishful assumptions, or this cut disguised as a solution, then contact me. I have a really long bridge to nowhere to sell you.
Donna Cooper is a Senior Fellow at American Progress.