feel toward politicians. To point the way, I wrote this book.
The Left and the Right Agree on One Thing: Congress Misrepresents
On June 30, 2010, transportation officials closed Seattle’s South Park Bridge because it was on the verge of collapse and beyond repair. The bridge had received a grade of four out of a hundred on the Federal Highway Administration’s safety scale, far worse than the fifty-out-of-a-hundred grade given to a bridge in Minneapolis whose collapse in 2007 killed thirteen people.1
Spanning the Duwarmish River, the Seattle bridge had linked South Park, a working-class neighborhood, with a Boeing plant and other large workplaces on the opposite side of the river. No longer could Boeing employees pop across the bridge to eat in South Park during their half-hour lunch break. The shortest alternative route required traveling an extra five miles in urban traffic. “It’s going to kill us,” said Chong Lee, the owner of one of the lunch spots.2
On the bridge’s final day of operation, the residents of South Park mourned their loss. Thousands of them, led by Native American drummers and followed by bagpipers, walked across the bridge one last time. At the foot of the bridge stood a couple with handmade signs reading, “Rest in peace dear old bridge, you’ll be greatly missed.”
The loss of the bridge also harmed people far beyond South Park. The bridge had been crossed every day by twenty thousand cars and trucks plus the buses on three urban routes. The trucks had carried ten million tons of freight per year.3
Photograph by Meg Brown, 2010.
FIGURE 2. South Park mourns its bridge.
Even with emergency funding from every level of government, it took four years to replace the bridge. These years of disruption were unnecessary. Transportation officials had known for years that the bridge was beyond repair and repeatedly sought money to build a replacement before it had to be closed. Only five months before the bridge closure, federal officials rejected a proposal to fund a replacement, allocating funds to other projects instead.4
The old South Park Bridge was in sad shape, and so, too, is our nation’s overall transportation system. One in nine of the nation’s 607,380 bridges are structurally deficient, according to the (not-altogether-disinterested) American Society of Civil Engineers, and it finds roads and mass transit to be in even-worse shape.5
Yet, only a half century ago, the federal government paid for building and maintaining a highway system that was the envy of the world. In 1956, Congress imposed a three-cents-a-gallon tax on gasoline to finance the Highway Trust Fund, which would pay for building and maintaining the Interstate Highway System and some of the lesser highways connecting it to homes, factories, and farms. Three cents might not sound like much, but back then a gallon of gas cost only about twenty-three cents, tax included. As the years went by, Congress increased the gas tax to keep up with inflation and changing needs, and in 1982 it started using the trust fund to pay for mass transit as well. In 1993, when the price of a gallon of gasoline was $1.16, Congress increased the gas tax to 18.4 cents per gallon.6
Since then, Republicans in Congress, with significant support from Democrats, have refused to increase the gas tax. At the same time, inflation has reduced the buying power of the tax on a gallon by 39 percent. Moreover, with cars and trucks getting more miles per gallon, drivers pay tax on fewer gallons while causing much the same wear and tear on the roads. As a result, the Highway Trust Fund pays a smaller share of the cost of providing decent roads, bridges, and mass transit. Bad transportation hurts the economy, which is why the usually tax-shy Chamber of Commerce urged Congress to increase the gas tax in 2013.7 Congress didn’t act.
Of course, increasing the federal gas tax isn’t the only way to increase funding for transportation. States and localities provide three-quarters of the funds for highways. Congress was not, however, about to say that the states should be the source of any additional transportation funding. With the money gauge on the Highway Trust Fund pointing toward empty by the summer of 2014, federal officials would have to stop authorizing any new projects after September. That threatened to idle the contractors that were paid by the Highway Trust Fund and their employees.8 If that happened, many corporations and unions would have used their money and manpower to unseat members of Congress in the 2014 elections. That prospect, unlike broken bridges for constituents, stirred Congress to act.
On July 31, 2014, Democrats and Republicans in the House and Senate joined in passing, by wide margins, a statute that kept the contractors and their employees working, but without increasing the gas tax. Signed into law eight days later by President Barack Obama, the Highway and Transportation Funding Act of 2014 put $10.8 billion into the fund to pay for projects from October 2014 through May 2015. Spending at that rate is too slow to fix our broken transportation system. Fixing just the fifteen structurally deficient bridges on one interstate highway (I-95) as it runs through one city (Philadelphia) would, according to former Pennsylvania governor Ed Rendell, cost $7 billion.9 However, the $10.8 billion saved the legislators from the wrath of the contractors and unions during the 2014 elections.
From here on in, the plot thickened, but it’s not important to recall all of its twists and turns. Just note the various kinds of blame that members of Congress have ducked, and continue to duck, as the plot unfolds. There have been two so far: they ducked the blame that would have come their way had they (1) increased the gas tax or (2) inflicted losses on construction contractors and layoffs on their employees.
Legislators, of course, had to get the $10.8 billion from somewhere and in this, too, they ducked blame: they ducked the blame that would have come from (3) having the government borrow it. To avoid being accused of adding to the deficit and the national debt, they claimed to have generated additional revenue. How they got away with this claim is really bizarre, so take a deep breath and read the next sentence slowly. Legislators temporarily eased a law that requires businesses to put aside enough money to honor their promises to their employees to pay them fixed-benefit pensions after they retire. Because putting money into a pensions fund counts as an expense in calculating a corporation’s profits, cutting payments to the fund increases corporate profits and therefore increases the current revenue the federal government earns from the tax on corporate profits. Largely because of this increased revenue, the Congressional Budget Office concluded that the Highway and Transportation Funding Act of 2014 would not add to the budget deficit for the coming ten-year period.10
This change in the pension law delighted corporations because it meant they would have more profits to keep even after paying taxes. “It means more cash for us,” stated International Paper’s chief financial officer Carol Roberts.11
Congress had thus seemingly produced more money without increasing the tax rate on corporate profits. So members of Congress thereby also ducked blame for (4) increasing the tax rate on corporate profits.
Congress did not, however, produce something for nothing. Businesses will have to make up for their temporarily reduced pension contributions by increasing contributions years from now, which will then reduce the taxes they pay. So Congress did not increase tax revenues long term but rather arranged to collect future taxes early. To make up for this advance, Congress will have to raise taxes or cut spending later on. The legislators, in effect, borrowed the money but finagled to keep the borrowing
