Congress Going Postal to Bail Out Highway Trust Fund

House leadership’s recent proposal to use savings gained from reforming the U.S. Postal Service (USPS) to bail out the dwindling Highway Trust Fund (HTF) has received substantial criticism—and rightly so.

USPS does need the flexibility to change its business model and would benefit from the resulting savings, but Congress should not use these savings to avoid implementing crucial reforms in the HTF and the federal surface transportation programs it funds.

Legislative text is forthcoming, but a memo from House leadership to House Republican Members proposes ending USPS’s Saturday delivery of first-class mail, catalogs, and related low-priority pieces of mail while maintaining delivery of priority and express mail. It would bring in about $10.7 billion in savings over 10 years, which would be used to offset (pay for) a General Fund cash transfer to shore up the HTF through May 2015—or less than one year.

Congress is responsibly seeking to pay for a General Fund transfer, but this spend-now-save-later approach is irresponsible.

Congress should pursue reforms at USPS that change the way it can do business and avoid asking taxpayers to bail it out. Congress should also pursue structural reforms at the HTF—such as ending the federal gas tax diversions to urban mass transit, bicycle paths, streetlamps, and other local activities—as important steps toward handing over transportation decision making to the states.

In the near term, Congress should seriously consider requiring federal surface transportation programs to live within the trust fund’s means. The states will not sit idly by for long, if at all, even if the federal role is scaled back appropriately and funds a limited set of activities. The states have a great stake in having sufficient and efficient transportation infrastructure and indeed are already assuming more leadership in funding and financing their projects.

However, marrying USPS reforms and HTF spending levels, as this proposal would do, does not amount to responsible policy. It only lets Congress keep kicking the can down the road.