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‘Reasonableness’ is paved over by spending proposals

By George F. Will
Opinion: Newsweek

"Genuine alarm was excited throughout the country by what was for the first time widely recognized as a German menace. In the end a curious and characteristic compromise was reached. The Admiralty had demanded six ships: the economists offered four: and we finally compromised on eight."
– Winston Churchill, "The World Crisis: 1911-1918"

And that bit of history brings us to the subject of the highway bill that is currently gestating in Congress. Perhaps it is destined to become historic for provoking President Bush's first veto. Certainly it will tell us something about how American government has, and has not, changed.

The 1998 transportation bill, which expired last year, cost $218 billion. Bush proposes a six-year, $256 billion bill. The Senate has passed a $318 billion bill by a 76-21 margin that could override a veto. The House is pondering a $370 billion bill. They may compromise on $400 billion.

Not really, but the facts are bad enough, beginning with this one: Congress is itching to ditch the principle that highway bills should be paid for by the federal Highway Trust Fund, which means by drivers who pay an 18.4-cent tax on every gallon of gasoline. At least Rep. Don Young (Republican of Alaska), chairman of the Transportation and Infrastructure Committee, has the courage of his convictions: he favors a phased eight-cent increase in the gas tax.

That will not happen, Bush having stipulated two principles: no gas-tax increase and no use of general revenues. It is encouraging, sort of, that there is sufficient residual conscience in the Senate to produce trickery. It is resorting to revenue shuffles and other dubious devices to disguise the fact that the proposed financing of its $318 billion would go beyond the trust fund.

Notice the argument we are not having. Long ago, federal spending on infrastructure, then called "internal improvements," was controversial.

In 1817, South Carolina Sen. John Calhoun's bill for such projects was vetoed by President Madison as exceeding proper federal responsibilities. So prosperous Northern states built their own, and the South became a steadily more backward and disaffected region. Dealing with the consequences of that fell to a man who, as a young Illinois state legislator, supported canals and the rest of his hero Henry Clay's internal improvements.

Before such improvements were undertaken, roads were few and mostly impassable in wet weather. Commerce depended on sailing ships and riverboats. It cost as much to move goods 30 miles in America as to ship them across the Atlantic. Economic growth barely exceeded population growth.

Then came macadamized roads. The Erie Canal ignited construction of 3,700 miles of canals by 1850. Railroads freed winter commerce from frozen canals and cut the travel time between New York and Chicago from three weeks to two days.

The cost of shipping a ton of wheat from Buffalo to New York City fell from $100 to $10, and the difference between the wholesale price of pork in Cincinnati (then called Porkopolis) and New York fell 90 percent. Suddenly urban workers were spending less on food and more on manufacturing goods. Infrastructure spending midwived modern America, and remains an important federal function.

Today's infrastructure spending will not be so transformative. But it is good luck for those eager to maximize highway spending and bad luck for persons concerned with spending restraint that the highway program has come up for renewal during a presidential election that could turn on the issue of job losses.

The Senate passed its bill as the president's chief economic adviser was being pelted with dead cats as punishment for the faux pas of uttering an economic truth. The adviser said that exporting jobs that can be done cheaper elsewhere—"offshoring," as to India—strengthens America. When, for example, American X-rays are analyzed in India, American health-care costs are reduced. Thirty percent of jobs sent to India are performed for U.S. companies. And the export of jobs frees U.S. workers for tasks where America has a comparative advantage.

But trying to slow the highway legislation with mere reasonableness is like trying to lasso a locomotive with a cobweb. Infrastructure spending means jobs, perhaps including the president's. Besides, he knows, and Congress does, too, that in 1987 President Reagan vetoed a highway bill. And was overridden. The sound you hear is the diesel rumble of bulldozers and steamrollers, ready to roll over opposition.