CONGRESSIONAL. RECORD — SENATE
August 21, 1978
Page 27117
Mr. MUSKIE. Mr. President. the Senate has before it S. 3073, the Federal-Aid Highway Act of 1978. I shall take a few minutes to comment upon the major budgetary aspects of this legislation, particularly as they relate to the spending targets which Congress established in the first budget resolution for fiscal year 1979.
As reported in the Senate, S. 3073 provides highway program authorizations for fiscal years 1979 and 1980 of $8.4 billion each year. The bulk of these authorizations, $7.9 billion in fiscal 1979 and $7.8 billion in fiscal 1980, provide contract authority from the highway trust fund, and thus represent direct spending authorizations not requiring appropriations except for liquidation. The balance of the authorizations are for appropriated highway programs, some of which are funded from the trust fund and some from the general fund.
I am pleased to be able to report to the Senate that these reported authorizations are consistent with the budget resolution for fiscal 1979. Further, the spending pattern established by the bill suggests that highway spending through fiscal 1983 also will be consistent with the 5-year targets set forth in the report on the first budget resolution. I feel I must warn the Senate, however, that very little leeway exists to increase the reported authorizations.
Mr. President, I take this opportunity to compliment the Committee on Environment and Public Works, and particularly its distinguished chairman, Senator RANDOLPH, its ranking minority member, Senator STAFFORD, and its excellent Transportation Subcommittee, led by Senators BENTSEN and CHAFEE, for the exceptionally fine job they have done in writing this 1978 highway bill. Rarely in the time I have been in the Senate — and never in the time I have served as chairman of the Budget Committee — have I seen a Senate committee approach such a difficult task in a more deliberate, objective and fiscally responsible manner. It is because of their efforts that S. 3073 is such a responsible piece of legislation, and one which the Senate can be proud to support.
I base my compliments for this legislation and for its authors on three major features of S. 3073 — its budget totals which are consistent with the congressional budget; its rejection of policy changes which could lead to an unnecessarily expanded role for the Federal Government in highway development and maintenance; and its preservation and protection of the fiscal integrity of the highway trust fund.
First, as I have indicated, S. 3073 is within and totally consistent with the congressional budget. The reason for this is not blind good fortune. Rather it is that the Public Works Committee intended that to be the result and consciously worked to achieve it. In the early months of this year the committee's members were faced with two proposals, both representing significant departures from current Federal highway policy. On the one hand, the administration proposed only a moderate increase in highway spending for fiscal year 1979, but recommended substantial policy changes which if enacted would create pressures to increase Federal highway spending significantly in the future. The leadership of the House Public Works Committee, meanwhile, was proposing to increase Federal highway spending by billions of dollars per year, starting immediately.
Exerting its independence and drawing upon its own substantial knowledge and resources, the Public Works Committee charted its own course and drafted legislation that represents its own more realistic and viable judgment of the appropriate future of Federal highway assistance. The committee carefully assessed the need for increased Federal financial assistance, and concluded that some increase above the administration's request is warranted. It wisely rejected, however, the excessive multibillion-dollar increase proposed in House legislation. The committee then reported its recommendation to the Committee on the Budget, which concurred and included similar budget targets for highway spending in the first budget resolution approved by the Congress. Thus, the fact that S. 3073 is consistent with the congressionally approved budget is no accident. Rather it is because of the good judgment and effective leadership of the Committee on Environment and Public Works.
A second reason to compliment the authorizing committee relates to the policy direction the reported bill establishes. The Department of Transportation's proposal submitted to the Congress in January contained a number of policy changes which, if enacted, would seem certain to result in a new and significantly expanded role for the Federal Government in highway spending.
These proposals included: Extension of eligibility for Federal assistance under the urban highway program to all urban roads; extension of eligibility for assistance under the small urban and rural grant program to any public road; expansion of eligibility under the special bridge program to bridges off as well as on the Federal-aid highway systems; and, perhaps most significant of all, a further increase in the Federal share of non-interstate projects from the current 70 to 80 percent.
Wisely, the Senate Committee chose to reject most of these proposals. The only one which it incorporated into S. 3373 is the one that would open Federal assistance for bridge repair and replacement to bridges not on a Federal-aid system. I remain somewhat concerned about the implications of the precedent this provision establishes, but for now I accept the recommendation of the Public Works Subcommittee which has studied this issue more thoroughly than I, and which has concluded that this new policy is necessary in order to deal with a unique and serious problem. I would note, however, that while the Senate bill as reported included a reasonable authorization of $450 million to fund this expanded bridge program, this amount already has been increased to $525 million on the Senate floor, so that the authorization now exceeds the maximum amount which DOT says can responsibly be obligated in fiscal 1979. And if this is not sufficiently frightening, the House bill as reported provides a $2 billion authorization for fiscal 1979.
I strongly urge the Senate conferees to stand firm against any further increases to the bridge program above the Senate figure. Further, I believe that the Senate should take the House's proposed authorization level as a warning of what could happen to this program if we are not careful. Clearly, the program warrants continued examination to assure that what is intended to be a limited expansion of eligibility for Federal assistance does not produce undesired and unintended financial impacts on the Federal budget.
While I am on this topic of questionable policy changes, I would note also that while the Senate authorizing committee has prudently rejected the Transportation Secretary's proposal to increase the Federal matching share to 80 percent, its House counterpart has not. This means that the provision will be an important issue in conference, and I would therefore like to take this opportunity to encourage the Senate conferees to hold fact to the Senate position that the Federal share should remain at 70 percent. Were it to increase to 80 percent, it would be certain to stimulate significant increases in Federal highway spending in the near future. This is because of the increased leverage it provides to program beneficiaries.
To be more specific, $1 billion of State and local spending on non-interstate products currently can produce $2.3 billion in matching Federal expenditures. With an increase in the Federal share to 80 percent, however, that same $1 billion could produce $4 billion of matching Federal expenditures. Thus, what looks like a 10-percent change could increase Federal expenditures by 74 percent without an additional cent of State and local spending.
Such a shifting of the highway spending burden to the Federal Government is not warranted, particularly when State and local governments are, collectively, in a much more liquid financial position than is the Federal Government. Further, I would remind the Senate that it has been only 5 years since we increased the Federal share on non-interstate projects from 50 to 70 percent. The push for that increase also came from the House, and as I recall it, the principal argument was that Federal spending on the interstate system was about to drop sharply, and it was therefore necessary to increase non-interstate spending in order to preserve prevailing overall highway spending levels. Of course, no such sharp reduction in interstate spending ever materialized. Total Federal highway spending rose steadily, and is projected to continue to do so. In the face of this, however, the House is now proposing yet a further increase in the Federal matching share. If they were consistent in their approach, they should be suggesting instead that the Federal share be returned to its previous 50 percent level.
Mr. President, the third reason — this is really the point I wanted to get at in connection with Senator MORGAN's amendment — I see for complimenting the Public Works Committee is that its reported bill preserves the fiscal integrity and fundamental soundness of the Highway Trust Fund. It does this by preserving a policy which has long prevailed in the management of the Federal highway program, that there should be a basic equality of projected trust fund expenditures and receipts.
This is pretty fundamental. But the House-reported bill proposes to ignore this established policy, and to provide annual expenditure authorizations for programs financed from the trust fund at levels which exceed projected trust fund receipts by more than $3 billion per year!
Those critical of former Redskins coach George Allen's financial management skills claim that "he was given an unlimited budget and he exceeded it." Well, considering what the House is doing with the 1978 highway bill, I would say that in comparison George Allen looks like Ebenezer Scrooge.
Were the new policy proposed in the House bill to be enacted, CBO projects that the highway trust fund would be broke by fiscal 1985. At best, there would be an excessive accumulation of unfunded liabilities mortgaging several years of future revenues. More likely, the cash would be exhausted and the program seriously disrupted.
Financial calamity could be avoided only by one of four means, none of which would be acceptable. One option would be for Congress to again surrender the power of purse to the executive branch by allowing the President to protect the trust fund by impounding highway funds. Or, the Congress could temporarily suspend all or a significant portion of Federal highway spending. Or, it could enact sharp increases in highway excise taxes to finance the "unexpected emergency," which in fact was entirely predictable. Or, it could use appropriations from the general fund to bail out the trust fund.
If this sounds familiar, it is for the simple reason that it is very similar to the financing mess in which we find ourselves in the case of the social security program and its trust fund.
Mr. President, I believe the Senate must do its best to assure that the House cannot "social securitize" the Federal highway program and highway trust fund.
Further, I believe we can strengthen the conference position of the Senate by stating in statutory language the policy implicit in the Senate bill's responsible approach to managing the highway trust fund. The amendment offered by Senator MORGAN does this. It provides simply that trust fund spending policy and revenue policy should be consistent, and that significant alterations to one cannot responsibly be considered without considering compatible alterations in the other.
Overwhelming approval of the bill before us, amended to include the policy statement proposed by Senator MORGAN, will demonstrate to the House the Senate's concern that the fiscal integrity of the trust fund be protected. I therefore urge my fellow Senators to vote in favor of the amendment offered by Senator MORGAN and for the Senate bill as thus amended.
Mr. BENTSEN. Mr. President, I appreciate the remarks of the distinguished chairman of the Budget Committee and those of my able friend, the Senator from North Carolina. In reading his amendments, it is a very sound statement of principle in budget fiscal prudence, one that we have tried very much to comply with, and it has not been easy. But I believe it is a contribution to the legislation and I for one am pleased to accept it subject to the comments of the minority manager of the bill.