TEA21 Manna from Shusta

TEA21

Manna from Shusta

“What is about highway bills that causes Republicans to lapse into a state of fiscal insanity?” asked NATIONAL REVIEW of the 40% increase in highway funding passed overwhelmingly by both houses of the US Congress. “Democrats couldn’t have written a worse bill,” the country’s premier conservative organ said of the latest draft six year plan for transportation funding. NR then failed to answer its own initial question, so we’ll try.

For years the talkers of America, the politicians, pundits, professors, and assorted activists and experts have said we can’t build our way out of traffic congestion. Noone much quarrels with that but, the guys in, say, Delaware Co PA want their bit of narrow 2-lane Conchester Rd straightened out and widened to four lanes divided between US-1 and I-95 because they get so frustrated by the daily backups on the way to and from Unionville PA to the job in Glassboro NJ, and recall the ghastly head-on smash that made orphans of Mary Pirotta’s kids and has one them still unable to play soccer because of that mangled leg...and please overpasses etc, well if not now, then later. And the people of Barbour Co in places like Elkins and Buckhannon WV know that the way local communities get a tax base is by providing decent access off an interstate-style highway for the tractor-trailers, and that high tech jobs are created in large office parks on nice landscaped campuses with little lakes and that there is no way any serious corporation would mess with an inner city, and people can only get there in cars and so they support Corridor H...and the people of Goochland and Henrico counties just outside Richmond VA know that to get Intel or Motorola interested they’ll have to support plans to build a 4-lane spur off the interstate...

The answer to NR’s anguished question is that those conservative Republican politicians are more politician than they are Republican or conservative. There are a lot of highway projects out there waiting for money that a lot of ordinary people want, and that have the strong support of county executives, small businessmen, lawyers, chambers of commerce, local papers and the whole array of groups in communities that make things happen. Of course there are also a lot of very unpopular highway projects too, that arouse passionate opposition, and almost every one is a battle, but there are enough battles being won by pro-roads groups that can go ahead and soak up the billions from Washington DC. So while everyone wants to be against “paving America over” in general and pays lipservice to the need to encourage alternative modes, and to assert that the era of “building interstates” is over, in fact we continue to steadily build new motorway standard roads all over the country, but we call them parkways, leave them bland state route numbers, or just regard them as road improvements. Those crazies, people say quietly, why stir ’em up by calling it a freeway or an expressway? Let’s just call it a road upgrade, a bypass, something unprovocative, and maybe they won’t notice. And often they don’t. Or don’t manage to stop it.

Public wants better roads

So the huge increase in federal highway funding can be viewed positively as an acknowledgment that better roads are very popular and have a lot of support out there in the real America, and that the prattlers who are heard belittling roads are inside-the-beltway types, out-of-touch elitists, hot air generators, walk/bike/rail nuts etc.

But there’s something ominous about the silence of the enviro crowd on the 40% increase in roads funding! Not a peep of protest about the multi-billion highway pork, for example, out of Hank Dittmar and his STPP which is usually stridently leading the anti-roads crusade here in this national capital.

Simple: they’ve been bought off by Shuster and his Senate collaborator Chafee. Clean air reviews, alternatives planning, public consultations, enviro impact, flexibility to substitute transit, wetlands, the handicapped, prevailing wages, minority setasides, and all the other paraphernalia of progressivist regulation of roads projects (CMAQ etc) remains intact. And indeed transit and all the environmentally correct modes get increases in funding similar to roads. They are sharing the pork!

Corruption

Indeed there is something that isn’t fully captured in the nerdish term ‘pork’ that is grossly corrupt about the political process that produces this money. Consider this:

“We had notified you that there was $10 million in the bill for your boss (if you’ll vote right). We’re upping that by $5 million (to make the deal more attractive, you recalcitrant, expensive SOB), so you have $15 million, and I am just trying to figure out where you want to put the new money, the new $5 million...” These are the words of a Shuster foot soldier of the House transp committee as recorded on the voice mail of an aide to Rep. Tom Coburn (Rep OK) March 17 (WASH POST Apr 2). The public’s millions were being bargained by the Shuster mafia in return for a vote on the floor of the US House of Representatives. This was just the tip of the iceberg of a whole underworld of massive bribery and extortion that is conducted on Capitol Hill in the name of “politics.”

After one senator, Bob Graham (Dem, FL) complained in a speech about “little piglet” highway demonstration projects growing into “giant hogs” Shuster theatened to cut $500m out of Florida funds. He’d put out the word that Graham blew it for his state. Shuster told Gannett News that subsequently the dispute was settled: “When he groveled, I blinked.”

Power-mongers

We don’t have here people with any concern for the inherent value to society of particular projects. They see control over projects as levers of power, vote-getting tools, and above all as a means to gaining campaign contributions.

Rep David Hobson (Repub OH) says that the vote buying scheme being worked by the Shuster gang recently was so big it was being systematized according to a sliding scale formula of payoffs:

• $40m for Transp Committee members

• $20m to $30m for members facing tough re-election fights

• $10m to $15m for other members

Rep Steve Largent (Repub OK) says he got a vote buying call from a Shuster staffer so similar to that recorded by Coburn that it would seem the Shuster soldiers were manning a phone bank, almost reading from a script like some enormous telemarketing operation.

Largent told them “My vote is not for sale.” And with those six words his constituents lost $15m of highway pork that the chairman had offered in return for the vote.

But such principled politicians as Largent are an anomaly in any legislative assembly with such awesome power to direct the vast monies garnered by the machinery of state taxation. Like virgins in a brothel, they are absurdly out of place. How can they survive in politics?

Come election time the opponents of Hobson, Largent, Coburn and other whistleblowers-on-Shusterism will charge them with poor “constituent service” in the oily euphemism of the fixers, and contrast the US$s flowing in other districts to the paucity of federal dollars that they produced. What comeback do they have that doesn’t sound like priggish self-righteousness and moralizing? All they can hope for is that the quirks of politics will throw up egregiously weak opponents. The odds are heavily against them for fighting the whole corrupt logic and quasi-criminal process of big government, that Shuster represents, whose modus operandi is to quietly take in taxation from the unorganized and unwary many, to dispense favors to the well-connected few.

Contrary to what the highway user lobbyists say, the result is thoroughly bad for highway users. It basically pays off special interests, and the real highway users get the left-overs. Discriminatory and almost certainly unconstitutional setasides for approved minorities remain entrenched, and to pay off union racketeers phony ‘prevailing wage’ mechanisms are perpetuated in law — these to buy the acquiescence of Democrats. The money continues to be channeled to roads via wasteful multi-layered federal, state and local bureaucratic mechanisms heavily encumbered by political and regulatory strings. The new legislation keeps roads in the thrall of an odious socialism, funded basically via the fuel tax and controlled by politicians and bureaucrats. As Gabriel Roth has said it is more reminiscent of the late Soviet Union than what we like to think of as the US of A.

Pork was once outlawed

Stephen Moore a budget expert at the Cato Institute points out that historically legislators understood the dangerous temptation to buy local constituency support with national funds, and under pressure from some to do this in the early days of the automobile, the US House of Representatives in 1914 passed an anti-pork rule: “It shall not be in order for any bill providing general legislation in relation to roads to contain any provision for any specific road.” That rule was subverted in 1982 when local “demonstration projects” were approved, supposedly different from real road projects. Though most of them demonstrated nothing, at least the distinctive terminology was a tribute vice paid to virtue. Now the demonstration claim has been dropped and the floodgates have now been opened by unprincipled politicians like Shuster to an unending stream of what are now just called “special projects” —special only to the extent they are motivated by the incumbent politician’s desire to demonstrate his ability to bring home the “pork” to his local district to help him gain re-election. (see table “Porkers”) Pork allows the selection of highway projects to bypass entirely any rational evaluation and planning process, and to be committed without any criterion of benefit/cost ratios or likely return on investment compared to alternatives. It is the purest exercise of arbitrary command-&-control of resources, of the kind a Stalin, a Mussolini, or an Al Capone would indulge in.

Both the Justice Dept and the House Ethics Committee have Shuster and his office under investigation. Apr 9 a US grand jury indicted Ann Eppard, a close associate of Shuster on 7 counts of bribe-taking, embezzlement and fraud involving $250k. Eppard got a lobbyist to channel money via her son in return for congressional influence over land being acquired for Boston’s Central Artery project, the indictments say. At the time Eppard was Shuster’s chief of staff. She has since positioned herself perfectly to attract corrupt contributions from all manner of interested groups since she is simultaneously his chief campaign fundraiser, and a transp lobbyist! She currently both represents people and groups who want to influence Shuster’s machine, and she works as a paid ‘consultant’ within the Shuster machine.

The WASH POST and PHIL INQUIRER ran detailed articles outlining the corruption in the Shuster camp earlier this year. But they were lowkey in tone and the rest of the media were fixated on the sexier Clinton scandals. Shuster and Eppard have run up tens of thousands in bills at food stores, restaurants, dry cleaners, theatres etc charging personal expenses to the campaign fund. Eppard traded up last year from a $824k house in Alexandria to a $1.4m waterfront place, and she complained to the POST about how “tough” it was with that mortgage. All cry for the poor gal!

The US Congress supposedly has some ethics rules about staffers turning lobbyist. Yet as the POST reports: “She (Eppard) and Shuster however remain close. They dine together frequently. They still travel together frequently. (The relationship is platonic, it’s said - TRnl) She still exercises influence over the operation of his congressional office. And she is still his principal fund raiser... they still crisscross the country together, the transp chairman and the transp lobbyist. As they do, they combine the chairman’s tours of proposed (highways) with the candidate’s fundraising events...”

Insider lobbyist

Ann Eppard Associates, her lobby company is reportedly booking over $1m/yr in lobbying fees at the same time she is a paid consultant to the chairman, and Eppard uses her tours with Shuster, paid for by the campaign, to pick up lobbying clients. For example there has been intense lobbying for federal favors from the Gulf of Mexico TX towns of Harlingen, Corpus Christi and McAllen (for tax-funded upgrades of US-59/US-77). The Shuster-Eppard pair made several fundraiser/inspection visits and during the same time that she picked up lucrative lobbying jobs. Harlingen is paying her 10k/month! She had the chutzpah to tell the POST she landed these clients quite “independently” of her visits with Shuster. And she says she never “talks lobbying” at any Shuster campaign event. She hardly needs to.

One of Eppard’s “consulting” tasks was to raise money to commission an artist’s portrait of the chairman — $40k pandering to the ego of the champion fixer!

Braggadocio seems likely to be the downfall of some of these rogues, but their timing was good. The US budget is unexpectedly in surplus and other interests were slower and less well-positioned than Shuster to exploit the windfall. It is unclear how large their legacy will be for highways. Special interests skim off so much from fed$s (20 to 50%?) it doesn’t buy that much real road. There are various views as to how far it affects the prospects for toll roads. (see p4) The mere perception that there’s a big increase in fed$s available has to undercut the political case for toll roads and pricing, at least short-term.

“Why should we pay tolls when there’s all this extra money coming from Washington,” will be the cry every time someone proposes a toll or pricing project. That has been a factor in the $300m Legacy West Davis UT first proposed as a toll road and it is a major theme in the financing of the $1.6b Wilson Bridge replacement VA/MD (future TRnl reports). It will be more difficult all over the place to say the alternatives are a toll road or no road. It’s tough competing with something that’s given away for free!

Many in the toll business say the extra money will be dissipated in thousands of small projects and that there will be plenty of good larger projects left. Some like Neil Schuster (unrelated) of IBTTA don’t think there are many standalone toll projects anyway. He views tax money and tolls as complementary, not competitive. To the extent that pessimistic assessment is correct, the extra tax money could help as much as displace toll projects.

The latest year for which there are numbers, 1995, shows of $95b spent naionwide on roads, just $20b came from the fed taxes, $49b from state taxes and $26b from local taxes. The federal role has been declining but now thanks to Manna-from-Shusta likely will increase. It is quite possible that many states and localities will simply let their fund raising for roads decline and offset in whole, or part, the increases in federal contributions. Matching fund arrangements are meant to limit that, but local politicians and bureacurats can usually find ways around those provisions by redefinitions of the scope and nature of projects. To the extent state and locals just coast at the expense of fed funding, the overall gap left for tollsters to fill will be much the same.

Late note

As we go to press there are several versions of what the conference finally agreed on and what is likely to be made law. As compared with the last-6 year’s $155b (approx 123hwy/32transit) there’s $173b for highways and $41b for transit and AASHTO finds a total of $214b together with a “discretionary firewall.” (see Puzzles) The Senators had protested long and loudly about the 1,850 “pork” projects in the House bill costing some $9.3b, but in an imaginative last minute compromise the Senators said they would let the House pork projects go through if the Reps agreed to reduce the funding of the 1850 to $7b and let an additional 360 Senate porkers be added costing the $2.3b. Now there’s the great chamber of principled review at work.

Asked about the protracted disagreement over what reporters and other policy nerds had pompously called the “apportionment formulae” of the body of the bill, the no-nonsense Sen. Daniel Patrick Moynihan (Dem NY) declared: “You don’t have any formula here, you have 50 negotiated numbers.”

So it isn’t just the special projects but the whole caboodle of $200b+ that has been divvied up in political horse trades by the Shuster/Chafee political favors trading house that they call the US Congress.

As for the split of the overall loot by states, the following do very well: SC +79%, GA +70%, TN, VA, NV, ID +62%, MI, TX, AL, DE, MT +61%. Doing poorly are: MD +29%, ME +17%, CT +13%, HI +7%. Among the big states CA gets 46% more, NY +35%, PA +47%, IL +30%, NJ +30%, FL +57%. UT with an array of winter Olympics highway projects gets +58%. MA really lucked out losing 41%. That’s a negative there, the only one out of 50, and she’s a biggie. (Contact Bud Shuster 202 225 9446)

Puzzles:

AASHTO reports ominously that various congressional conspirators are “working to develop the design of a budgetary firewall” — a firewall which is somehow “discretionary.” If you want to let the place next door burn, you have the discretion to just roll the firewall aside?

AASHTO also reports the compromise bill contains a “Drunken Driving Incentive Program (DDIP).” (p3) That name seems unpolitic. Must have been very late at night they wrote that one, apparently after the booze and the wreckers lobbies got to them. Free booze for drivers? Vaaaairy mad will be MADD! (Mothers Against Drunken Driving)

That 41% drop in MA funding? Inside word is the MA state delegation lost their shirt because they had been relaxing together, and didn’t make it up to the Shuster conference room on Capitol Hill at the critical juncture in the final negotiations. Were these Bostonians taking an advance on that free booze under that DDIP? Don’t tell us it was because they couldn’t pull another Central Artery.