CBO Analyzes Obama's 'Hallucinatory' Transportation Budget
In case you didn't know, the Highway Trust Fund, a user-supported fund for financing highways, dipped into the red in 2011 (i.e. outlays exceeded receipts), as the Congressional Budget Office chart at the beginning of the Streetsblog Capitol Hill article clearly shows. Propped up with transfers from the general fund and then additional infusions of revenue through MAP-21, the trust fund's balance remained in the black as CBO's breakdown (PDF) shows. Come 2015, CBO projects a negative balance.
President Obama's transportation budget, presented here last month, would sustain the fund until 2021, according to a new analysis (PDF) released by the CBO on May 17. Tanya Snyder looks into the source of these life-sustaining funds for the nation's transportation infrastructure.
The source, "from Overseas Contingency Operations (PDF) — is a hallucination", she writes. They include "savings from the drawdowns in Iraq and Afghanistan. Just about every expert we talk to agrees these savings are fictitious."
The CBO calls it an “intergovernmental transfer” to highlight the fact that it’s not traditional Highway Trust Fund revenue.
So, instead of finding a real and sustainable source of revenue for an ambitious budget proposal, the president seeks to puff up the trust fund with a frontloaded infusion of general fund cash over the first couple of years and then spend down this “reserve” until 2021.
Snyder point to a concise summary by CBO analyst Sarah Puro of CBO's Status of the Highway Trust Fund distributed to the Committee on the Budget, U.S. House of Representatives on April 24, 2013. Puro doesn't mince words.
The current trajectory of the Highway Trust Fund is unsustainable. Starting in fiscal year 2015, the trust fund will have insufficient amounts to meet all of its obligations, resulting in steadily accumulating shortfalls.
Snyder lists the three options before lawmakers to keep the HTF solvent should they not pass President Obama's transportation budget:
Cutting (transportation) spending; boosting revenues, or both.
With those choices - it might be preferable to go along with the president's hallucination. While the source of the funds may not be real, the money is.