House Dems' 'Transportation Bill' Would DOUBLE Federal Gas Tax

P. Gardner Goldsmith | June 10, 2020

In her powerful 2007 book, “The Forgotten Man,” historian Amity Shlaes chronicles the catastrophic decisions, theories, and machinations behind Franklin Delano Roosevelt’s “New Deal” – a tectonic power-shift in U.S. politics the likes of which had only been seen during the Lincoln administration and Reconstruction. And in it, Shlaes notes the twisted mastery of FDR to use federal handouts as leverage to gain political support.

It’s a form of political gangsterism that allowed FDR to capture huge voting blocks, and it’s a system that nearly all politicians following him have employed.

And, as can be seen in their latest “transportation” bill, House Democrats clearly are eager apprentices.

As Christian Britschgi reports for Reason, the bill is a big one, with a wonderful, exciting, acronym that can be pulled from its title:

Last week, Rep. Peter DeFazio (D–Ore.), who chairs the House Committee on Transportation and Infrastructure, released the Investing in a New Vision for the Environment and Surface Transportation (INVEST) in America Act. The legislation would devote $494 billion over the next five years to the Highway Trust Fund, the main federal spending program for highways and public transit, and other grant programs.

Which inspires anyone familiar with the actual wording of the Constitution to wonder where there’s an “enumerated power” in it for such “investment.” This is particularly notable given the fact that Tennessee Congressman David Crocket said on the House floor in 1830 that the Congress didn’t have the power to do this kind of “internal improvement” – that it wasn’t “theirs to give.”

It’s also notable because for most people, an “investment” is done voluntarily, not under duress, under the threat of federal prosecution for non-payment of taxes while the person taking the cash says it’s for “your own good.”

But, regardless of these niggling constitutional and ethical problems, the Democrats in D.C. are very excited to “invest” for you and your neighbor – and to hang that fruit over the heads of state politicians as a means to get their support, just like FDR showed was so successful to further game the already corrupt system.

A little more than $410 billion, would be devoted to the federal government's Highway Trust Fund. That's a 46 percent boost from the last surface transportation bill, according to a committee summary of the legislation. It's also much more than generous than the surface transportation bill proposed by Senate Republicans last year. That bill, introduced by Sen. John Barrasso (R–Wy.) would spend $287 billion over five years, $259 billion of which would be directed toward roads and bridges.

All of which serves to recall the prescient words of 18th Century French economist and philosopher Frederic Bastiat, who, among many profoundly important observations, noted in his “Parable of the Broken Window”, that government programs fall into the trap of “that which is seen and not seen”. Criticizing a politician for claiming that a storm would “be good for the economy” because the damage it caused would require people to be employed for the repairs, Bastiat correctly noted that to praise such destruction of property as a way to employ someone focuses only on the person being employed, not on the loss of property and the loss of the opportunity represented by the money needed to replace that property.

Government programs, Bastiat correctly observed, all fall into that category.

In some cases, these programs are financed through government debt instruments – bonds – that eventually require future taxation or further bonds to pay for them. In other cases, the state imposes taxes themselves.

And so, as Britschgi notes:

The federal gas tax hasn't fully funded the Highway Trust Fund since 2008. In that time, Congress has had to transfer $144 billion from the Treasury's general fund and other sources to cover the gap, according to an April report from the Congressional Research Service.

And this proposal can’t magically pay for itself, either. Britschgi also observes that Reason Foundation transportation expert Baruch Feigenbaum finds the likelihood of the bill passing to be about as high as the possibility that FDR will be on the next ballot.

‘It's never going to pass,’ he says. ‘The primary reason for that is the amount of spending would require doubling the federal gas tax and that's never going to happen.’

Which would, no doubt, be a terrific way to get millions of unemployed Americans back to work – and sequester even more cash into the hands of politicians, rather than leaving it in the hands of civilians who are the ones whose valuations are supposed to drive resources in the free market.

There’s something very curious about folks like DeFazio who display such jaw-dropping ignorance of fundamental ethics and economics. They don’t seem to understand what drives up living standards and the ability to create new inventions, employ new employees, and expand opportunities.

That’s the productive capacity of the market to create surplus. Without surplus, created in a competitive market at lower and lower costs, there’s nothing “extra” to invest in new ideas.

Government not only consumes that surplus, it destroys future surplus and even the emotional incentive to consider the possibility of there being surplus with which to plan.

It is a poison, and any hope to make it look good by showing off new highways and bridges – which then are left to crack over time as part of a new “unseen” – cannot hide the truth.

Even if this “investment” does not pass, it’s worth looking at it to study how politicians operate, and have operated for far too long.