Safe, Accountable, Flexible, and Efficient Transportation Equity Act of 2003

SAFE, ACCOUNTABLE, FLEXIBLE, AND EFFICIENT TRANSPORTATION EQUITY ACT OF 2003

Mr. GRASSLEY. Madam President, I want to address the consideration that the Senate Finance Committee gave to the portion of the highway bill that determines the size of the trust fund, source of the trust fund, and our committee's decisionmaking over that. And my speaking to the Senate is based on the proposition, thus far, that we are moving ahead with the total highway package the way that has been suggested by the Senate Environment and Public Works Committee, Senate Banking Committee, and the Senate Commerce Committee, with my committee working in cooperation with those three committees, at that level of expenditure.

Somehow, if the President, in succeeding days, would say he is not going to sign a bill that is that big, I will moderate my remarks to conform with that. But right now, all I know is what this body has done in three of its committees to arrive at where we are now. I want to address, within that framework and that environment, the work of our committee.

I will particularly speak about some other Members of this body who lack a consideration of the hard work that has been put into this product, as well as their philosophical objections to what we have done. I don't have any question that any Senator can have any philosophical objections to anything he wants, but I want everybody in the Senate to know that the 21 members of the Senate Finance Committee did not take this product lightly.

There has been a lot of harsh criticism of the upcoming Finance Committee title of this highway bill.

What I will do is lay out the context of the funding portions of this legislation and respond to this harsh criticism. The role of the Finance Committee on the highway bill is centered on the highway trust fund raising, not expending, funds. Finance Committee jurisdiction involves the Federal excise taxes, the highway trust fund, and the expenditure authority of the trust fund. The Finance Committee has acted in all of these areas as recently as just this Monday.

The authorizing committee's actions will result in outlays from the trust funds of $231 billion for highways, and $36.6 billion for transit, spread out over the next 6 years. Essentially, those figures I just gave you represent the cash-flow out of the trust fund. The Finance Committee's action provided the resources in the trust fund to cover the cash outflows and provide a cushion in the trust fund balances. This is how we arrived at that action of the Senate Finance Committee.

But some of the critics have said the Finance Committee should have funded the trust fund at the level of the motor fuel taxes and the compliant savings resulting therefrom.

This is a very fair debate to have in the Senate, or in any committee, but I want the Members of this body who don't serve on the Finance Committee to understand that we had that fair debate in the Finance Committee on Monday, and in other sessions before that. This committee had to decide otherwise from those critics who have said that the Finance Committee should have funded the trust fund at just the levels of the motor fuel taxes and compliant savings.

So I think everybody in this body has a responsibility to be realistic and wake up to the facts of life as we are considering this legislation and in their responding to it because there will be a time when the Senate will express its will on this floor, and we all have to face the reality of the legislative process. The will of the Senate, at the end of the day, will be to fund highways and transit programs at the outlay levels provided by the three authorizing committees of Banking, Commerce, and Environment and Public Works.

So to my critics, some of whom chose to criticize me directly, let me remind them that last year I was 1 of 21 votes against the Bond-Reid amendment during the budget debate. That wasn't an easy vote. So I understand the sentiments for lower funding levels, but Members of this body need to understand that 21 is a sizable minority of this body, and the vast majority decided more money should be spent on highways and transit.

That was last year, and this is now, today. A majority of the Finance Committee dealt with this fundamental reality. So I would like to ask the critics to come out of their ivory towers and deal with the reality of the Senate.

The reality that faced us on the Finance Committee was how to bridge the gap between the baseline revenue collections and the outlay levels of the three authorizing committees, which was considerably higher.

In consideration of this major problem facing us, the leader of the Democrats on my committee, Senator Baucus, and I-and we try to work together whenever we can, and that is most of the time-had the reality of the Senate to take into consideration. We had to keep in mind the institutional issues with which the Senate Finance Committee has to deal. We could not and we would not choose an option that would undermine the integrity of the trust fund, and we surely are not going to do anything to undermine the role of the Senate Finance Committee.

What do I mean by the integrity of the trust fund? The answer is that the Finance Committee needs to ensure that there is a relationship between the receipts in the trust fund and the spending from that trust fund. To the extent that relationship is undermined, I say to my fellow colleagues, the Finance Committee's role is undermined as well.

I also wish to point out the bottom line for those other 20 Senators who, like me, voted against the higher trust fund spending last year. Again, the political reality is that the Senate is going to approve outlays at the levels approved by these three authorizing committees.

One option would be a direct general fund transfer. A direct general fund transfer erodes the integrity of trust funds, and it dilutes the role of the tax-writing committees. It directly delinks highway spending and highway receipts, and we believe those have traditionally been tied together and should be tied together. Because of that, the Senate did not go there.

There is a danger for us fiscal conservatives of such an approach because direct general fund transfers would potentially be open ended and no fiscal discipline whatsoever.

If the Finance Committee had done what the critics argue, what would have been the outcome on the floor of the Senate? Does anyone believe that we would have been left at the authorized funding amounts? No, we all know the funding levels would have gone way up. Where would we end up? The answer is that we would end up with a direct general fund transfer.

Any Finance Committee member should be concerned about that bottom line result and what that does to the trust fund concept and the history of our committee's jurisdiction over that trust fund but, more importantly, our responsibility we have to the Senate.

In the Finance Committee, we decided to maintain the relationship between the trust fund receipts and the trust fund spending. It is so important then to distinguish between trust fund receipts and revenues that is counted for budget purposes.

Embedded in the trust funds are several policies that burden the trust fund. The clearest of these, and one we always hear, is the treatment of ethanol. The tax benefit for ethanol is the only-the only-energy production incentive that is not borne by the general fund. There are billions of dollars in tax benefits for oil and gas that are charged to the general fund, for instance. Do Senators from oil and gas States understand that the tax benefit for ethanol is the only energy production incentive that is not borne directly by the general fund?

Under current law, the use of ethanol is prejudiced in terms of the highway trust fund resources. That is because the benefit is charged against the trust fund up to this point when we adopt this legislation because my VEETC proposal eliminated the inequity by making sure the trust fund is fully funded by those who use ethanol fuel. For my friends who are always criticizing, the tax benefit for ethanol, like that of any other energy source, will be borne then by the general fund.

There are numerous other exemptions from the fuel taxes in addition to ethanol. These exemptions further important policy purposes but purposes which are not embedded in highway policy. No one takes issue with the exemption but whether they should be borne by the highway trust fund. We don't hear that argument.

Contrary to what has been suggested, increasing highway funding in this manner is not unlimited like the direct general fund transfers but is limited by the universe of exemptions.

For the 20 other Senators who, like me, last year voted for lower highway spending, they have an interest in what the Finance Committee did. By maintaining the relationship between highway receipts and spending, we maintain a ceiling on the spending. A direct general fund transfer does not have such a limit.

I repeat and remind my colleagues, the bottom line is that the so-called illusory receipts that Finance came up with result in a ceiling on highway and transit spending. Don't these other 20 Senators want some sort of a ceiling? The ceiling is not available with a direct general fund transfer.

The Finance Committee bill contains a self-imposed ceiling that relates the receipts to expenditures of the trust fund and everything connected with the trust fund.

Do these receipts end up as refunds or exemptions? No, those are legitimate policy choices made by Congress in law. I cited the case of ethanol. There are others. Those receipts represent the burden users put on our roads. The trust fund then properly accounts for these users.

Where we have shifted the burden of an exemption or refund from the highway trust fund to the general fund, the Finance Committee has provided offsets. In the end the Finance Committee has made sure this will not add to the deficit.

To those who choose to ignore the political reality of the Senate, decisions made overwhelmingly by three other committees, decisions made last year on the budget we are still operating under with only 21 dissenters, the rest of the Senate decided there ought to be more massive amounts of money spent on roads.

That is the political reality of the Senate. I say to these people, what would you do? What would you do to make the trust fund a relevant part of the highway program, where it has been since we have had Federal gas taxes? What would you do to maintain the relationship of the trust fund receipts and trust fund spending? What would you do to avoid an open-ended general fund transfer where there is lesser, or maybe absent any, fiscal responsibility?

I get back to some old sayings that can say it better than I can, and I think I read in Lyndon Johnson's biography, "The Master of the Senate," that Sam Rayburn said something about any jackass can push a barn down, but it takes a carpenter to build one.

We have a few people who are trying to kick the barn down. These people are not really interested in building a barn like the three authorizing committees are, as they tried to put something together. Albeit there might be some sort of disagreement about exactly what the right and ideal level of expenditure is, but they have worked hard. The American people want us building the legislative barn.

I turn to these people who do not want to build this barn-our Federal obligation under highways. It has been a pretty dominant Federal policy since Eisenhower and the interstate system, and of course a long time before that with other highways. They ought to quit kicking and focus on the reality of getting this highway bill done. The Finance Committee amendment took a step forward to getting this job done.

The Finance Committee did the job. We provided the funding. More importantly, we linked the highway receipts to the spending, and we did this in a deficit-neutral way.