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House Leaders Propose Plan to Plug Highway Gap by Cutting Postal Services

June 2, 2014

By Oliver Patton

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Republican leaders in the House are proposing a stopgap plan that claims money from postal service reforms to keep the Highway Trust Fund solvent through next May.

Cutting back on Saturday service, the Postal Service could save $10.7 billion over 10 years. Kevin Payravi, Wikimedia Commons
Cutting back on Saturday service, the Postal Service could save $10.7 billion over 10 years. Kevin Payravi, Wikimedia Commons

The Fund is expected to run into the red in July, even before the current highway program expires at the end of September.

State transportation departments are alarmed by the pending shortfall. Many are suspending projects and future plans for fear that there will not be enough money.

House Speaker John Boehner, R-Ohio, Leader Eric Cantor, R-Va., and Whip Kevin McCarthy, R-Calif., acknowledged the problem in a May 30 memo to their colleagues.

“The Trust Fund will require an additional transfer of funds prior to the August District Work Period,” they said. “Failing to provide additional funds would mean a disruption of ongoing construction projects.”

The Fund needs $14 to $15 billion to pay for a one-year extension of the current highway program, called MAP-21, they said.

Their plan says that by cutting back service on Saturday, the Postal Service could save $10.7 billion over 10 years. This could reduce the size of a future federal bailout of the Postal Service, which will be necessary because the Service’s retiree benefit program is underfunded.

The service cutbacks involve ending delivery of first class mail, catalogues and low-priority mail on Saturdays. The Post Office still would deliver packages and priority and express mail, and offices would stay open.

The projected savings could be combined with the $1.3 billion in the Leaking Underground Storage Tank Trust Fund to keep the Highway Trust Fund whole, they said.

They said the postal savings are a realistic offset because President Obama’s 2015 budget also recommends ending Saturday mail deliveries.

They acknowledge that this is a one-time maneuver that does not address the long-term funding problem plaguing the federal highway program.

Because the fuel taxes that feed the Highway Trust Fund have not been adjusted since 1993, and because cars and trucks have become more fuel efficient, the Fund is on a downward path.

Boehner and his colleagues said they need more time to come up with long-term structural reforms.

“The serious work needed to develop acceptable policies to achieve structural reform has not been done yet,” the said.

“There is no consensus on what those reforms should be. In the meantime, we must address the problem of near-term trust fund insolvency to prevent a shutdown of federal highway and transit programs.”

The memo generated a negative response from transportation leaders in the Senate.

Sen. Tom Carper, D-Del., a leading proponent of raising the federal fuel tax to save the Highway Trust Fund, said the proposal is “a non-starter.”

“It kicks the can down the road yet again on two pressing issues – fixing the Postal Service and the Highway Trust Fund – and fails to solve either problem,” he said in a statement.

“If House Republicans want to prevent a taxpayer bailout of the Postal Service, they should focus on passing comprehensive postal reform legislation, not shirking the responsibility of making tough decisions regarding the future of our nation’s infrastructure.”

Sen. Barbara Boxer, D-Calif., chair of the Senate Environment and Public Works Committee, described the plan as “strange.”

“This idea is a jobs killer which does not even fund the Highway Trust Fund for a long enough period of time to provide the certainty that states, cities, and businesses need,” she said in a statement.

Noting that the EPW Committee recently unanimously passed a bill to reauthorize the highway program, she said, “Surely the House can begin to do the work needed to solve this problem – and not kick the can down the road with a totally unrelated and unworkable idea.”

Comments

  1. 1. Ben [ June 03, 2014 @ 06:16AM ]

    Is Boehner beyond his time or what? The Postal Service is bankrupt. Cutting service on Saturdays is common sense. There are no savings to "fund" something else. Savings in Postal Service helps stop the bleeding.

 

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