By Robert A. Vella
The Highway Trust Fund, an ongoing federal project to maintain the nation’s vitally important transportation infrastructure, will become insolvent next month unless the U.S. Congress acts to fix it. Otherwise, some 700,000 construction jobs will be lost which would negatively impact America’s uneven economic recovery.
The budget shortfall in the fund results from a federal gas tax that hasn’t kept up with inflation. It was last raised in 1993, and is currently set at 18.4 cents per gallon.
So, what’s the big deal? Raise the tax, right? Wrong! This is Congress we’re talking about here, and 2014 is an election year. Republicans are now ideologically opposed to all taxes (except for those which penalize clean energy development), and Democrats have become reluctant to raise taxes even to keep pace with inflation.
Instead, Congress is implementing a short-term fix that will push the issue out of the public spotlight until next spring (i.e. after the midterm elections). Their solution is to allow corporations to reduce payments to their employees’ pension funds! Since these payments are tax-deductible, it should – theoretically – raise federal government tax revenues which would – again theoretically – be put into the Highway Trust Fund.
Here’s a caveat: corporations which are restructured or dissolved through bankruptcy proceedings are often permitted to have their pension obligations lowered. In other words, their workers get screwed.
If this “fix” sounds insane to you, you are not alone. Jon Stewart thought so on Wednesday’s edition of The Daily Show (watch the “Shabby Road” segment here).