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Deficit Puts Brakes On Highway Spending

Tax Software Multibillion-dollar legislation authorizing new highway construction in hundreds of communities has become unexpectedly bogged down in Congress by differences between GOP fiscal conservatives and Republicans willing to spend more to create jobs.

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Software Tax House Republicans last week abruptly delayed long-planned action on a $375 billion, six-year version of the bill that had been scheduled for floor action the second week of February. In the Senate, conservative members called on Majority Leader Bill Frist (R-Tenn.) to postpone debate set for today on a smaller, $318 billion package.

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Every Landlord Tax Deduction Their letter called the measure "potentially the biggest budget-busting spending bill the Senate will consider this entire year," and said it would be "irresponsible" to vote on it until its full cost and impact on the deficit are known.

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Tax Help The controversy, party officials said, was a telling example of how the growing budget deficit -- and jitters about the way voters might perceive GOP fiscal policy this fall -- has begun to change Republican priorities. Frist last week appeared to back away from his support of a major energy bill because of its $31 billion price tag.

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Help Tax "I think the American people and members of the United States Congress said that that is too much," Frist said. Congressional Republicans meeting in Philadelphia last week indicated the energy bill could be substantially revised or even broken into smaller parts.

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Ernst Ernst Guide Guide Tax Congressional Democrats and GOP conservatives alike also vowed to alter parts of the recently enacted Medicare prescription drug bill, after new estimates suggested it would cost $134 billion more over 10 years than Congress had advertised less than two months ago.

Tax Return Republican leaders have made enactment of a far-reaching transportation bill -- meant to fund highways, bridges, road improvements, mass transit and safety programs -- the first order of business this year. Quick action is needed, GOP officials say, to prop up the nation's stagnant job market before the fall elections.

Return Tax Rep. Don Young (R-Alaska) -- who chairs the House Transportation and Infrastructure Committee -- and other veteran committee members from both parties have been besieged by requests from lawmakers to earmark funds for favored projects back home.

Guide Guide Master Master Tax "Every member has an obligation to fight for the highest amount possible for roads in the district," said Rep. Donald Manzullo (R-Ill.), who indicated he was disappointed with his allocation and is pushing for more.

Tax Preparation "In order to pass the highway bill, you've got to placate members first on the committee, then off the committee," said Rep. John L. Mica (R-Fla.). "It's the money that oils the wheels that turns the transportation legislation."

Preparation Tax But this year the spending proposed for highways has run into strong philosophical and fiscal objections from the GOP's conservative wing. In a "Dear Bill" letter to Frist on Wednesday, eight Senate Republicans warned that restraint was essential in light of projected budget deficits of $1.9 trillion over the next 10 years. The signers included Republican Conference Chairman Rick Santorum (Pa.), Republican Policy Committee Chairman Jon Kyl (Ariz.) and Budget Committee Chairman Don Nickles (Okla.).

Employer Tax Guide In the House, Young has proposed an 8-cents-a-gallon increase in the federal gasoline tax by 2009 to fund his proposed $375 billion, six-year measure. The current tax is 18.4 cents a gallon. Young's plan, supported by the committee's ranking Democrat, Rep. James L. Oberstar (Minn.), would add 1.7 million jobs.

Tax Services But House conservatives are up in arms about the gasoline tax proposal. "There's a lot of people who don't see eye-to-eye on this," a senior Republican aide said. "Don Young isn't going to get everything he wants with the current budget reality."

Services Tax Among the leaders of the anti-tax faction is freshman Republican Rep. Marilyn Musgrave, who represents a mainly rural district in eastern Colorado. Musgrave campaigned for the House seat on a promise to fight the increase, said Guy Short, her chief of staff.

Master Tax Guide Nonetheless, Musgrave last year asked Young's committee to fund several highway projects in or near her district, including a multimillion-dollar project to widen sections of Interstate 25. The projects' total cost was about $1.5 billion, but the requests are now on hold, said Young spokesman Steven Hansen.

Tax Attorney "It's been indicated to members that if they oppose increasing revenues for highways and transit, it will be difficult to fund their projects because we simply won't have the money to do it," Hansen said.

Attorney Tax "We can't get our phone calls returned from the committee," Musgrave said.

Guide Law Tax Rep. Jeff Flake (R-Ariz.), another member of the anti-tax group, said Young was providing projects only to those willing to "sell your vote. . . . It's not worth that price."

Tax Accountant Under Young's proposal, gasoline taxes would be raised a nickel the first year and would then be adjusted annually for inflation, reaching about 26.4 cents a gallon by 2009. Hansen said the road-building program would relieve congestion, enabling motorists to reduce driving times and gasoline consumption.

Accountant Tax The Senate Finance Committee on Thursday released a funding plan that provides substantially less for the transportation program than the House, and avoids a gasoline tax increase. However, it uses a series of budgetary maneuvers to increase the amount of money going into the Highway Trust Fund, which pays for road building, by about $35 billion. This move would reduce tax revenue that now goes to finance other government activities. To plug this hole, GOP strategists in the Senate are proposing to close a series of tax loopholes.

Circular Employer Tax Guide The Bush administration opposes an increase in the gasoline tax and favors a more modest road-building program. Last week, Transportation Secretary Norman Y. Mineta outlined a $247 billion, six-year plan that would meet the nation's transportation needs "in a fiscally responsible manner," a spokesman said.

Income Tax By Dan Morgan and Juliet Eilperin
Washington Post - 2/2/2004

Topic: Transportation

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