Washington Post Death Spiral Watch

Why oh why can't we have a better press corps?

Here's Chris Conkey in the WSJ, doing some straight reporting:

Bush Ends Opposition to Highway-Fund Boost: WASHINGTON -- The Bush administration reversed earlier opposition to a plan backed by congressional Democrats to provide $8 billion in emergency funding to pay for transportation projects. The move comes as unemployment is surging and gas-tax revenues for road projects are falling short of projections.

The administration has for months resisted seeking general-fund money to plug a shortfall in federal gas-tax collections that has gotten worse as Americans have responded to high gas prices by driving less. The driving decline means less tax revenue is flowing into the federal Highway Trust Fund, the primary mechanism used to finance highway and mass-transit projects. Gas-tax money is running short just as demands to fix aging highways, railways and other transportation networks are soaring.

Congress rejected the White House's preferred solution: shifting money into the highway account from a better-funded mass-transit account.

Spurred by lobbyists for road builders and other business groups, many in Congress instead preferred the idea of transferring $8 billion into the highway account from the government's general fund. The House has already passed such a bill. Partisan quarrels have stalled action in the Senate...

Here is the incompetent Eric Weiss of the Washington Post, in the tank for the Bush administration:

Highway Trust Fund Is Nearly Out of Gas: U.S. Transportation Secretary Mary Peters said the nation's highway trust fund will run out of money this month, which means that federal payments to states for construction projects could be cut. Yesterday, Peters asked Congress to come up with an $8 billion infusion for the trust, a federal account used to help pay for highway and bridge projects. The House has already passed such legislation. The trust has been hammered because its main source of funding is the gas tax, which has not been increased since the Clinton administration. The high cost of gasoline has resulted in less consumption and, therefore, fewer dollars flowing into the trust fund.

"Time and again, the president has warned Congress of the pending shortfall and submitted fiscally prudent budgets to close the gap," Peters said. "Americans cannot afford to have Congress play 'kick the can' with highway funding for another year, another month or, frankly, another week"...

Shut down the Post. Shut it down today.

Comments

[A]

I understand the federal gas tax is a fixed amount per gallon.
(Please correct me if I am wrong).
If so, then, of course, the tax amount raised falls with consumption, even if consumers spend the same amount of money on gas as before a gas price increase. Wouldn't it be rational if the federal gas tax would be a fixed >percentage< of the retail price (as other sales taxes)? If so, part of the price increase would automatically go to federal taxes (and this problem not occur, or its severity less).
Now we'll have the average taxpayer subsidize the highway trust fund.

[NE1]

You might imagine if less gas is being bought, roads are subjected to less wear and tear, so require less maintenance. And, the average taxpayer benefits from the highways, with or without a car. Just how much and how much to tax may be tough to agree on. But the article isn't doing us any favors.

Maybe Brad should change his "Preview and Post" buttons to "Preview and Submit"?

[Frank the sales forecaster]

Of course any shortfall in any other government trust (and there are only 2 other government trusts) is a diaster and requires everything be changed (i.e. lets fix s.s. shortfall by giving the investment banking houses a piece of the action) radically. The highway trust on the other hand, we just write it a check.

[MobiusKlein]

I found a quote in the AP article http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2008/09/07/financial/f082013D47.DTL&tsp=1 saying
'The Federal Reserve and ... said in a joint statement Sunday that "a limited number of smaller institutions" have significant holdings of common or preferred stock shares in Fannie and Freddie, and that regulators were "prepared to work with these institutions to develop capital-restoration plans."'

by "capital-restoration", do they mean some of the shareholders will get money, others not? That certainly sounds like privatizing the profits to me.

[Hedley Lamarr]

My, my, how close to the bone we were living with the highway trust fund - a little downturn and we're out of dough. What if we were like that with Social Security?

[Mike S.]

The gas tax is generally envisioned as a "user fee" -- drivers who use the roads pay for them. However, it's a pretty blunt instrument in that way.

Highway costs -- for maintenance and expansion -- are generally a factor of miles driven. But as vehicles become more efficient, and substitutes to gas are increasingly used as vehicle fuels (ethanol and natural gas don't pay the gasoline tax), revenue per mile driven falls.

The trust fund has been on a glidepath to exhaustion for a long time, in part because of the Bush administration's utter refusal to consider increasing the gas tax in any way that would approximate "indexing" it to miles driven. The oil-price surge and accompanying collapse in gas prices just accelerated the process.

[Mike S.]

BTW, an unremarked story here is the apparent success of the mss transit forces in beating back the Administration's effort to raid their separate, smaller trust fund account to fund the highway spending...

[Nathan Myers]

Brad, it's time for every media critic to drop the "carrying water" idiom (which nobody really understands any more) and move to "picking up his dry-cleaning". Do please help spread the word.

Credit to Dan Lyons, via his "Fake Steve Jobs" blog: "Jerry Yang: And he's like, Hey, tomorrow on your way over here for the meeting, I need you to stop by my dry cleaner and pick up some stuff for me. And then go to the Sufi Coffee Shop on El Camino Real and get me a Turkish coffee. Okay, b*tch?"

fakesteve.blogspot.com/2008/06/sergey-just-called-me.html

[Nathan Myers]

(That's not to say anybody wrote that here.)