House Budget Reform Paper Addresses HTF Solvency (Obliquely)

August 31, 2016

The Congressional budget process is so badly broken these days that the chairmen of the House and Senate Budget Committees have had to find things to do other than write budgets. They have settled on addressing ways to fix the broken process. This ETW article from three months ago examined the process reform ideas put forward by the chairman of the Senate panel, Mike Enzi (R-WY), and how they might affect federal transportation and infrastructure spending.

Now the majority staff of the House Budget Committee has produced its own working paper on how to reform the enforcement aspects of the budget process. (Warning: while the Senate paper was four pages of bullet points, most of which can be grasped easily by an educated layman, the House paper goes deep, deep into the procedural weeds where us budget nerds live.)

All you really need to know about the House staff paper is this:

  1. It does not directly address transportation-specific process issues, but…
  2. It does talk a lot about the need to reform section 401 of the Budget Act of 1974 to make it easier to enforce.

Section 401 was the provision of the 1974 law that was supposed to put an end to new “backdoor” spending programs outside the annual appropriations process. As part of this, section 401 created a point of order in the House and Senate against bringing up bills that create new contract authority, unless that contract authority is drawn on

…a trust fund, 90 percent or more of the receipts of which consist or will consist of amounts (transferred from the general fund of the Treasury) equivalent to amounts of taxes (related to the purposes for which such outlays are or will be made) received in the Treasury under specified provisions of the Internal Revenue Code of 1954.

The 90 percent threshold (the “Nunn amendment” per its adoption on the Senate floor via amendment by Sen. Sam Nunn (D-GA) in 1974) was long cited by Highway Trust Fund supporters prior to 2008 as the reason why the HTF was “deficit-proof.” $140 billion in bailouts of the HTF from the general fund later, the rule is an unenforceable embarrassment, forcing Congress to waive it or else see all highway, transit and highway safety programs grind to a screeching halt.

Any reform of section 401 and its enforcement process would likely have to make some kind of accommodation for the new system of periodic general fund infusions to the HTF or else establish some other kind of process for supporting the ongoing highway, transit and safety programs within a new budget framework.





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