POTHOLES AND POVERTY–OR SOMETHING BETTER

On September 30, unless Congress acts to extend it, the 18.4 cent Federal gasoline tax will expire. It’s hard to imagine an overt act more immediately damaging to our economy or more inconsistent with our long term economic needs.

The tax, which has not been raised since 1983, is clearly inadequate. In 2008, the Highway Trust fund – which is the fund intended to support transportation improvements in the U. S. – ran out of money. Spending from the Trust Fund has exceeded revenues since 2002. Although Congress has plugged the gap with revenues from the General fund, it has failed to come up with an integrated plan – and a funding program –to assure adequate maintenance of our existing assets and provide the improvements needed to assure competitive capabilities in the years ahead.

Allowing the gasoline tax to lapse would, among other things:

· Encourage people to drive more, thus worsening the already severe congestion that irritates us all – and costs more than $100 billion annually in extra fuel costs.

· Increase our negative trade gap, and increase our energy dependence

· Cost lots of jobs. $1billion in infrastructure spending supports about 25,000 jobs; if the tax lapses and we stop spending, hundreds of thousands of jobs will be in immediate jeopardy.

· Accelerate the already severe deterioration of existing bridges and highways

It’s hard to understand why anyone would even consider allowing the tax to lapse. Americans pay far less for gasoline than driver’s in other countries, and much less in fuel taxes as well. The recent Simpson-Bowles Commission recommended an immediate 15 cent per gallon increase in the tax; others have suggested more substantial increases. Everyone except politicians seeking votes seems to agree that our infrastructure needs immediate and substantial help.

It is clear that it does – and that the needed help will cost lots more than another 15 cents a gallon at the pump. In 2008 the national Surface Transportation Policy and Revenue Study Commission – a Congressional creation – recommended spending at least $225 billion annually, far more than we now spend. Various estimates put the bill for deferred maintenance of our highways and bridges in the neighborhood of $2 trillion.

In addition to needing lots more maintenance on our roads and bridges, we also need an integrated plan to upgrade and expand our capabilities in many areas. We need a plan that measures the adequacy of our highways, mass transit capabilities, airports, ports, communication systems, energy transmission systems, waste facilities, water systems, hospitals, law enforcement facilities and educational assets against those of other countries – and that provides for the many and substantial improvements needed to put the U. S. back in a position of leadership.

Around the world, our competitors are spending far larger shares of GDP on infrastructure improvements than the U. S. Brazil, India and China, are reportedly spending more than $1trillion annually! And we are clearly falling behind.

In 2005, the World Economic Forum rated the U. S. # 1 in economic competitiveness; today, we are ranked #15. Unless we fix the problem, we’ll rank even lower in the years ahead.

Solving the problem is a necessity if we want the country and our kids to have a satisfactory future– and stepping up to that necessity also represents an opportunity to solve one of today’s major problems. If Congress and the President were to come up with a national infrastructure plan this fall, and fund it at just $200 billion annually for the next ten years, we’d generate about 5 million new jobs.

Although it is clear that $200 billion will not be sufficient to meet the competitive challenge being mounted by others, it will be enough to provide a big chunk of the roughly 12 million jobs we’ll need during those ten years to put the currently unemployed back to work and provide opportunities for new workers. Moreover, the economic activity created and facilitated by that infrastructure investment will drive GDP growth, create lots of additional employment opportunities and – hopefully – provide the resources needed to build the capabilities not included in the initial plan.

Some will doubtless say we can’t afford it. In my view, these are investments we cannot afford to forego. Moreover, since we have spent or committed between $3 and $5 trillion during the last ten years in Iraq, Afghanistan and other military adventures – spending which has produced nothing and has yielded neither assets nor infrastructure to support our future growth – I just don’t buy the argument that we can’t find a way to finance the assets and capabilities needed to assure a decent future for our kids and grandkids.

Those interested in a more comprehensive examination of our infrastructure problem can find an excellent recent report here:

http://www.rockefellerfoundation.org/news/publications/falling-apart-falling-behind

Why Not, Pray Tell

The California Legislature recently approved the National Popular Vote Bill, joining eight other states that have approved the idea.   The question we all ought to be asking is “What’s holding everyone else up?”

Under current law, in all but two states, the candidate for President who gets the most votes receives all of that state’s electoral votes. There are lots of bad things about that arrangement. 

The most offensive is that we can – and have – ended up with a President who gets fewer votes than another candidate -- a result I think most people find repugnant.  When there is an election, the candidate who gets the most votes ought to win!!!  In 4 of our 56 presidential elections – most recently in 2000 -- the person who “won” got fewer votes than another candidate.

The most important problem is that the current system discourages voting, and thus deprives both politicians and citizens of knowledge about which policy choices the public actually favors.   If you are a Republican in a state that is regularly and heavily Democratic, what’s the point of voting?  You know in advance that you will be voting for a candidate who cannot win in your state and that as a consequence, your vote will effectively be ignored. The result is that voter participation – lamentably low in the “ battleground states” at about 67% -- was a truly disgraceful 61% in “spectator” states. 

Moreover, citizens in states that are tilted heavily in favor of one party are essentially ignored by those seeking the presidency. Why should a candidate bother to poll, organize or advertise in a state he or she is assured of winning? In 2008, to choose an example, 98% of post-convention campaign events involving either a presidential or vice-presidential candidate occurred in just 15 closely divided “battleground” states. The rest of the states were essentially ignored by the presidential campaigns. 

As many people know, the Constitution gives the states exclusive control over the manner in which their electoral votes are allocated. Maine and Nebraska now award electoral votes according to the popular vote in congressional districts; many states have altered the way in which electoral votes are allocated several times during the evolution of our political system. Thus, the  states can solve this problem anytime they choose to do so.

The Congress cannot alter the way in which states allocate Electoral College votes. The National Popular Vote Bill, although it sounds like pending legislation, is in fact simply a pact between states that have approved it.  Its terms provide that it will come into effect when it is approved by states with at least 270 Electoral College votes, which is enough to secure an Electoral College majority. However, since there are many and varied opinions about whether Congressional approval would be required, and since litigation – by someone on some grounds – would almost certainly result, it seems likely that when and if enough states sign on, the next step will be to petition Congress for approval and move on to a Constitutional Amendment.

The mechanics, while interesting, are not really important. What is important – for all of us -  is that state level polls have found strong public support for the Bill in virtually every part of the country, in both parties, and in all demographic groups. 

So why haven’t more legislatures responded?  Because most of us haven’t made it clear that we are not content with the status quo.   So, if you agree that it’s time to be sure that  the candidate who gets the most votes wins, and if you are tired to having presidential contenders ignore large numbers of us,  let your state legislators know that you want your state to approve the National Popular Vote Bill.

It’s about time, in my opinion, to be sure we all have a reason to vote and to be sure that every vote counts!!! 

Anyone interested in more information of this subject can find it here: http://www.nationalpopularvote.com/pages/explanation.php

Anyone else willing?

In a recent NY Times column, Joe Nocera wanted to know why people who are willing to pay higher taxes don’t stand up and say so.

Ok, I’m both able and willing, and I’ll bet there are lots of others like myself who are equally willing.   Any sensible person can look at recent events in London and see what lies ahead for the United States if we don’t bring an end to the era of constantly increasing income inequality and lost hope.  When people lose hope – as they will unless we invest what’s needed to fix our ever worsening educational system, repair our infrastructure, eliminate the complexity and unfairness of our ridiculous tax code, and encourage innovation --- they think they have little to lose by destroying the sense of security and social comity which from their perspective  benefits everyone but themselves.

So let’s get real. If we want to fix the country’s problem – instead of just talking about doing so – we need to roll taxes back to where they were before the Bush tax cuts, means test the big entitlement programs and get our absurdly high defense spending under control --- because those are the big ticket revenue and spending items that are driving the budget deficits.  At the same time, we need to do winnow out the countless governmental programs that represent unnecessary intrusions into everyday life and insist that essential government programs  operate  efficiently and honestly.  We need to give government the resources needed for its appropriate functions while eliminating functions and activities the government cannot and should not be doing. We can do so only by holding those we elect to a much higher standard of performance.

To meet that goal, we need to fix our political process by eliminating the gerrymandering which enshrines radicalism in most congressional districts as well as the Electoral College, which neutralizes the votes of millions of Americans in every national election. These archaic structures make it impossible to elect people willing to find middle ground rather than cling to ideological extremes.

Since all this will take time – and since we need change now – let’s begin by adopting all of the Simpson-Bowles Commission’s recommendations.  Doing so, now, will be a great down payment on the broader changes needed, and will give an immense and immediate boost to public confidence.