Surface Transportation Reauthorization and Reform Act of 2015—Conference Reportby Senator Mike Lee
Posted on 2015-12-03
LEE. Mr. President, I rise in opposition to the highway spending
bill before us today--and not just the failed substance of the
legislation. I rise to oppose the bill's irresponsible and
unsustainable funding mechanisms and the cynical process that produced
We are told this bill fully funds Federal highway spending for the next 5 years and that it won't add a single dime to the Federal deficit. The math may add up on paper, but does anyone really think the pay-fors in this bill are honest, responsible ways to fund a government program? Let's look at a few examples. Of the $70 billion this bill uses to bailout the highway trust fund over the next 5 years, more than $50 billion comes from an accounting gimmick that steals money from the rest of the Treasury's general fund.
Here is how the shell game works. Normally, the Federal Reserve sends the profits from its portfolio assets directly to the U.S. Treasury. These surplus profits are actually one of the major reasons our Federal budget deficits have fallen in recent years below where they were a short time ago. However, this bill would siphon off that money and redirect it into the highway trust fund.
Just today, Federal Reserve Chair Janet Yellen testified before the Joint Economic Committee, where she commented on this particular provision--on this particular aspect of this bill.
She said: This concerns me, I think financing federal fiscal spending by tapping resources at the Federal Reserve sets bad precedent and impinges on the independence of the central [[Page S8366]] bank; it weakens fiscal discipline, and I would point out that repurposing the Federal Reserve's capital surplus doesn't actually create any new money for the federal government.
That is not the only funding gimmick found in this legislation. It also purports to raise $6.2 billion in revenue for transportation and infrastructure projects by selling oil from the Strategic Petroleum Reserve.
Let's leave aside for a second that the Strategic Petroleum Reserve was never intended to be a piggy bank for congressional appropriators. What makes this pay-for particularly objectionable is that its authors assume they can get $93 for a barrel of oil when it is currently selling for less than $40 per barrel. Only in Washington could we come to love a provision like this. Only in Washington could we come to accept a provision like this as somehow acceptable. If we are going to start selling Federal assets at fantasy prices--prices that do not exist and will not exist in any universe for the foreseeable future-- there is absolutely no limit whatsoever to the number of things that we can pretend to pay for. But that is what we will be doing--pretending to pay.
As bad as this bill's funding schemes are, the cynical process used to secure votes in its favor might well be far more troubling. For instance, this bill adds back $3.5 billion in crop subsidy spending that we just cut last month in the budget deal.
Is this really how we do business in the Senate? We reduce spending one month in order to appear fiscally responsible only to reverse course the very next month when we think no one is looking? You don't need to oppose crop subsidies to see the dishonesty and cynicism of this particular maneuver.
Even worse, this bill would never have had a chance of passing the Senate were it not for a deal to include the renewal of the Export- Import Bank as part of this legislation. I have spoken out against the Export-Import Bank many times before, so there is little need to revisit the mountain of evidence proving that it is one of the most egregious, indefensible cases of crony capitalism in Washington, DC. But it is worth highlighting some of the so-called reforms that Ex-Im supporters included in the bill.
First, there is the new Office of Ethics created within the Export- Import Bank. Presumably, this is supposed to help the Bank's management reduce the rate at which Ex-Im employees and beneficiaries are indicted for fraud, bribery, and other wrongdoing. Since 2009, there have been 85 such indictments, or about 14 per year.
The bill also creates a new position called the Chief Risk Officer and requires the Bank to go through an independent audit of its portfolio. Only in Washington will you find people who believe that an organization's systemic ethical failings can somehow be overcome by creating a new ethics bureaucracy or that hiring a new risk management bureaucrat is a suitable replacement for market discipline or that giving another multimillion-dollar contract to a well-connected accounting firm will somehow substitute for real, actual political accountability.
None of these bogus reforms will make an ounce of difference. None of them will change the essential purpose of the Export-Import Bank, which is to use taxpayer money to subsidize wealthy, politically connected businesses.
Finally, it must be stressed that this bill does nothing to fix our fundamentally broken highway financing system. After this legislation is enacted, the highway trust fund will spend more money than the Federal gasoline tax brings in. And after this series of fraudulent pay-fors are exhausted in just 5 years, we will be right back to where we have been for the last decade, and that is trying to find enough money for another bailout without attracting too much attention from the American people.
Let's not forget that the States are big losers under the status quo system too--under the current system that we have. Federal bureaucrats divert at least 25 percent of State gasoline dollars to nonhighway projects, including mass transit, bike paths, and other boondoggles such as vegetation management, whatever that is.