Lanterna Rally

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Published: 1998

Total Pages: 0

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Some Members of Congress believe that the transportation trust funds should be viewed independently of other federal programs, and that federal transportation program spending should closely track revenues collected for the funds. Other Members of Congress believe that the transportation trust funds must be viewed as components of the entire federal budget and not as a separate element of the budget. Supporters of changing the budget treatment of trust funds, and especially those in favor of moving the trust funds off-budget, state that such a change would create the equivalent of a fire wall around federal transportation programs similar to, but not the same as, the one that exists for the Social Security program. They believe that this mechanism would provide an incentive for budget discipline and reserve the full value of user-fee-funded programs for their mandated purposes. Most importantly, this action would fulfill what they view as a “contractâ€ŗ between the taxpayer and the federal government to spend what are essentially viewed by supporters as user fees. The basic argument of those opposed to changing the treatment of trust funds is the need to maintain the accountability and integrity of the unified federal budget. They assert that the “surplusesâ€ŗ in the transportation trust funds do not exist because the federal government underspends on transportation programs. Transportation spending increased significantly until FY1995 - FY1996 and then increased slightly in FY1997. In FY1998, transportation spending is again appropriated at an increased level. To opponents of changing the treatment of trust funds, this situation demonstrates that special budget treatment of trust funds is not needed to facilitate necessary federal expenditures on transportation programs. The 1st Session of the 105th Congress ended without floor action on legislation that would change the budgetary treatment of transportation trust funds. Legislation giving the transportation trust funds off-budget status was introduced in the House early in the 105th Congress. The Truth in Budgeting Act, H.R. 4, attracted wide support in the House and had 242 cosponsors listed as of September 4, 1997. In addition, the provisions of H.R. 4 were incorporated in H.R. 2400, the Building Efficient Surface Transportation and Equity Act of 1997, (BESTEA) as Title VII. In committee markup on March 24, 1998, this title has been modified to take only the highway trust fund off-budget. Floor action on this legislation occurred on April 1, 1998. The Senate did not consider off-budget legislation in the 1st Session. Instead, legislation that could be viewed as a counterproposal to the off-budget initiative has been introduced. S. 404, the Highway Trust Fund Integrity Act of 1997, proposes the creation of a “revenue constrained fundâ€ŗ within the federal budget that would have some, but not all, of the same spending results as the off-budget bill. The Senate did not consider the budgetary treatment of trust funds during its recently completed floor action on S. 1173, the Intermodal Surface Transportation Efficiency Act of 1997 (ISTEA II), which provides for the long term reauthorization of surface transportation programs. It is likely that the budgetary treatment of trust funds will become an issue in conference on surface transportation legislation.