According to a recent article in The Hill, it appears improvements to America's federally funded infrastructure are threatened to be slashed. The $700 billion bailout is starting to create a "zero sum", shrinking pie scenario in Washington DC. This means that money allocated to one program, takes it away from another. In this case, the funds that go to the bailout, will not be spent on our nation's concrete backbone.
The funds for the bailout did not come out of thin air. Unless there is a sharp uptick in revenues (unlikely), improvements and maintenance of highways, rail systems, airports and other infrastructure may be scaled back.
One issue that has long term implications is the funding of the federal Highway Trust Fund. This is the tax that we pay per gallon of gas. Now that cars are becoming more fuel efficient and people are driving less there is less money going into the fund. The Feds bailed out the tax this year, but what happens next year when it is reauthorized against a shrinking pie?
I hope the bailout does not pay for expensive executive retreats, at the expense of our nation's future.
Below are some of the key points that were included in "The Hill" article.
Even in difficult times, our country should be able to walk and chew gum at the same time,” said Polly Trottenberg. “Regardless what happens with the bailout, the federal government must commit to infrastructure development to ensure jobs and create long-term economic growth.”
Trottenberg is the executive director of Building America’s Future . The coalition, founded by New York City Mayor Michael Bloomberg (I), Pennsylvania Gov. Ed Rendell (D) and California Gov. Arnold Schwarzenegger (R), is made up of elected officials focused on renewing infrastructure spending.
Fixing the nation’s roads, bridges and airports won’t be cheap. It could cost $1.6 trillion over five years, according to the American Society of Civil Engineers (ASCE).
That includes $39.5 billion to modernize America’s aviation system over five years, which lobbyists for the airlines, airports and other entities say would ease air traffic congestion and cut down on passenger delays.
The ASCE argues Congress needs to appropriate $155.5 billion annually to fix roads and bridges. It estimates that drivers spend about 4.2 billion hours stuck in gridlock per year at a cost of $78.2 billion to the economy.
Improvements and maintenance of federal highways is funded through the Highway Trust Fund, which is facing a shortfall because of high gas prices. Taxes on gas go into the fund, but collections are dropping as Americans drive less due to steep fuel costs.
Congress passed an $8 billion stopgap this month for the fund that should last until the end of the next fiscal year, Sept. 30, 2009.
In writing next year’s highway bill, Congress will tackle how to handle the trust fund shortfall, which could be exacerbated by the financial meltdown. On Monday, the price of oil shot up as investors, shaken by the instability of U.S. financial institutions, sought refuge in oil stocks.
