BREAK IN TRANSCRIPT
Mr. RYAN of Wisconsin. Madam Speaker, I commend the Speaker, Chairman MICA, Chairman CAMP, the conferees and their staffs for their work on this surface transportation reauthorization conference bill. With a history of short-term extensions and bailouts of the highway trust fund since the last highway bill was enacted, to the credit of Chairman MICA and the Transportation and Infrastructure Committee, they acted at the beginning of this year to report legislation to fundamentally reform this program to put it on a sustainable basis. While H.R. 4348 does not ultimately achieve that goal, it makes progress and the Chairman, the Committee, and the leadership are to be commended for that effort. For the first time, it offsets general fund transfers to the highway programs to keep the program operating through September, 2014. The bill also is at current level funding, earmark free, reduces the federal bureaucracy by consolidating transportation programs, and cuts red tape to institute significant reforms to complete major infrastructure projects. Relative to the Senate highway bill that irresponsibly relied on taxpayer bailouts for highway spending and past funding practices, the conference bill before us today is an improvement.
Despite this bill's progress, it does not address the structural problems in our transportation programs and I have some concerns with some aspects of the legislation.
First, though the Highway Trust Fund was intended to be financed at the level of gas tax revenues, Congress has increased spending for the program well beyond gas tax revenue levels. As a result, the fund has increasingly operated in the red by relying on general fund transfers to pay for annual funding shortfalls. The trust fund has required three large general fund transfers, or taxpayer contributions, totaling $35 billion since 2008. Over the next decade, the Congressional Budget Office (CBO) anticipates the Highway Trust Fund to run cash deficits in total of $105 billion, even upon enactment of today's bill. Through a budgetary loophole, these transfers of general taxpayer revenues are not captured for budgetary effects, allowing Congress to bail out the program without being recorded as a net increase in spending or deficits.
The FY 2013 House budget resolution, H. Con. Res. 112, included a reform to close the budget loophole for general fund transfers to ensure future transfers are fully offset and assumed potential funding streams in the form of new oil and gas revenues for the Highway Trust Fund. Congress needs to continue to reform the critical highway program to put it on sound financial footing without further bailouts with borrowed money. H.R. 4348 makes an important effort to offset the $18.8 billion in general fund transfers contained in the bill. But, instead of continuing to rely on general fund transfers going forward, we need to address the systemic factors that have been driving the trust fund's bankruptcy.
In terms of the bill's cost estimate, according to CBO, the unified budget impact of the entire bill is $16 billion in net deficit reduction over ten years. However, under traditional budget scoring, this does not include the cost of general transfers to the highway fund nor the flood insurance reforms' net income. When considering the bill under House budget enforcement per its budget resolution, if we include the costs of higher spending under scored general fund transfers and the flood insurance income, it leads to a small deficit reduction over ten-years.
Second, I am concerned with H.R. 4348's use often-year savings to finance two years of spending. We need to be reducing spending and deficits and when we increase spending, we should be offsetting the cost in as short a timeframe as possible.
Based on CBO scoring, the bill produces ten-year savings from pension law changes, but some of these changes come with long-term costs. It appears possible that any savings gained in the ten-year window may be offset by greater federal obligations in the future. I expressed my concern over a similar `smoothing' provision when used in past legislation.
Finally, this bill extends the current interest rate on certain student loans for another year. This is another example where Congress established a temporary subsidy with sudden expiration dates and no plans for next steps. I believe it is imperative that we work toward responsible, long-term reform in this area. Congress must stop playing games with students' interest rates to score political points. A well-educated population is critical to higher incomes and stronger economic growth, but our current education programs have serious problems. The right question is not should the interest rate be 3.4 or 6.8 percent. The focus should instead be on how developing an effective, fair and sustainable process for providing capital to students one that ensures access to higher education without fueling tuition inflation and exposing the taxpayer to unacceptable levels of risk. I look forward to working with my colleagues to achieve such reforms.
BREAK IN TRANSCRIPT