Letter to the Honorables Erskine Bowles and Alan Simpson, Co-Chairmen, National Commission on Fiscal Responsibility and Reform

Letter

U.S. Senator George V. Voinovich (R-Ohio) and Sen. Tom Carper (D-Del.) sent the following letter today to the co-chairmen of the National Commission on Fiscal Responsibility and Reform. The Highway Trust Fund needs $34 billion over the next six years to maintain the nation's roads, and Sens. Voinovich and Carper urged the co-chairmen, Erskine Bowles and Alan Simpson, to consider raising the gas tax to replenish the Highway Trust Fund and improve our nation's infrastructure.

Sens. Voinovich and Carper urged the commission to strongly consider the importance of transportation investment to job creation and the fact that the federal fuel tax has not been increased since 1993, when it was raised by 4.3 cents to 18.4 cents per gallon. The purchasing power of the current fuel taxes has decreased during this time; thus, the federal government's contribution to the transportation system has continued to fall behind.

"This proposal will fix the transportation program's major fiscal challenges. It will remove the approaching need for further General Fund transfers to the Highway Trust Fund, will provide additional deficit reduction, will supply essential investment for transportation infrastructure, and will create more than 750,000 jobs," Sens. Voinovich and Carper wrote.

Dozens of stakeholders signed a separate letter to the commission urging its members to raise the gas tax to improve infrastructure, including:

* America Bikes
* American Association of State Highway and Transportation Officials
* American Concrete Pavement Association
* American Public Transportation Association
* American Road & Transportation Builders Association
* American Society of Civil Engineers
* American Traffic Safety Services Association
* Apollo Alliance
* Associated Equipment Distributors
* Associated General Contractors of America
* Association of Equipment Manufacturers
* Association for Pedestrian and Bicycle Professionals
* International Union of Operating Engineers
* Laborers-Employers Cooperation and Education Trust
* Laborers' International Union of North America
* League of American Bicyclists
* LOCUS: Responsible Real Estate Developers and Investors
* National Asphalt Pavement Association
* National Association of Railroad Passengers
* National Construction Alliance II
* National Railroad Construction and Maintenance Association
* National Stone, Sand and Gravel Association
* National Utility Contractors Association
* Portland Cement Association
* Railroad Cooperation and Education Trust
* Rails-to-Trails Conservancy
* Smart Growth America
* Transportation for America
* United Brotherhood of Carpenters & Joiners of America

Please find a copy of Sen. Voinovich's Nov. 5 letter to the National Commission on Fiscal Responsibility and Reform below:

Nov. 5, 2010

The Honorable Erskine Bowles The Honorable Alan Simpson
Co-Chairman Co-Chairman
National Commission on Fiscal National Commission on Fiscal
Responsibility and Reform Responsibility and Reform
1650 Pennsylvania Ave., NW 1650 Pennsylvania Ave., NW
Washington, D.C. 20504 Washington, D.C. 20504

Dear Chairmen Bowles and Simpson,

We write to urge your commission, in its report to President Obama, to address the fiscal deficiencies of our nation's transportation budget. The federal transportation program is suffering from two crises. First, the Highway Trust Fund's revenue stream is insufficient for current outlays. Second, the existing level of transportation investment is inadequate to maintain our infrastructure and provide for 21st century improvements.

The Highway Trust Fund, which includes the Highway and Mass Transit accounts, is the primary federal funding mechanism for our nation's surface transportation network. Since 1956, federal excise taxes on gasoline and diesel have been deposited into the Highway Trust Fund and utilized to repair and expand federally-eligible transportation systems. However, the Highway Trust Fund can no longer sustain the level of outlays authorized under current law and recently has experienced near negative balances. To deal with this problem, Congress has transferred a total of $34.5 billion from the General Fund in 2008 and 2009 to maintain a positive balance in the Highway Trust Fund. These transfers delayed immediate insolvency but did not fix the underlying problem. As a result, the Congressional Budget Office estimates that the Highway Trust Fund will require $34 billion over the next six years to maintain existing outlays. This situation will force Congress to decide between two unacceptable solutions: additional transfers from the General Fund, which will lead to a higher deficit, or a sharp reduction in federal transportation funding for every state, which will create additional unemployment and continued deterioration of infrastructure.

The Highway Trust Fund's fiscal problems occur at a time when our transportation system is showing its age. The Interstate Highway System is more than fifty years old and many roadways and bridges are reaching the end of their useful life. In fact, nearly fifty percent of all bridges were built before 1966. In addition, the average age of transit rail vehicles is twenty years, with thirty-two percent of the fleet considered over-age. The U.S. Department of Transportation estimates that an additional $60 billion per year is needed to return our highways, bridges, and transit systems to a state of good repair. Expanding our infrastructure to accommodate growing population and economy will cost even more.

To address these fiscal challenges, we suggest that the commission include an increase in the federal tax on gasoline and diesel as part of your report to the president. We suggest that the taxes be increased by one cent per month for 25 months -- a total of 25 cents over a three-year period. Within this increase, 10 cents should be temporarily dedicated to deficit reduction, raising more than $83 billion over 5 years, and 15 cents should fund transportation improvements, providing $117 billion in new investments over five years. When the deficit is under control, the 10 cent increase for deficit reduction should revert to transportation funding, so as to maintain the user fee concept of the gasoline and diesel taxes. Upon completion of the month-by-month increase, the taxes should be indexed to inflation to prevent an erosion of purchasing power. Finally, all revenue from the 15 cent increase should be deposited into an escrow account at the U.S. Department of Treasury until Congress enacts a surface transportation authorization bill to allocate the new funding.

This proposal will fix the transportation program's major fiscal challenges. It will remove the approaching need for further General Fund transfers to the Highway Trust Fund, will provide additional deficit reduction, will supply essential investment for transportation infrastructure, and will create more than 750,000 jobs.

We thank you for your work on the behalf of fiscal responsibility. The task that you have undertaken is essential to the long-term strength of our nation. We hope that you will recognize that integral components of long-term strength are a manageable deficit and a robust and self-sufficient transportation system.

Sincerely,

Sen. George Voinovich

Sen. Tom Carper

CC: All Deficit Commission members

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