Federal Transportation Spending Cuts Key to Avoiding Fiscal Cliff

A new report provided by Taxpayers for Common Sense, a nonpartisan watchdog group, recommend federal transportation spending cuts that would help to reduce the federal deficit. The budget cuts are recommended as a way to avoid the automatic budget cuts and to keep the economy from going over the fiscal cliff. The group feels that by cutting $11.4 billion in 2013 from the federal transportation spending and cutting $187 billion over a ten year period, the fiscal calamity projected to happen could be avoided. The funds cut are termed as programs that are “inefficient, ineffective, or wasteful” and are detailed in their report entitled “Sliding Past Sequestration.”

Recommended Program Cuts

Eliminate General Fund Transfers to Highway Trust Fund

By eliminating the transfer of funds from the general fund to the Highway Trust Fund (HTF), $109.6 billion can be eliminated from the deficit over ten years. The HTF receives revenues from a federal fuel tax and other excise taxes. The funds are used to finance the federal Intersate Highway System and other roads. Due to the better fuel consumption of vehicles and reduced vehicle miles travelled, the fund has experienced reduced growth in revenue receipts. Because the HTF cannot have a negative balance, it has required the transfer of as much as $34.5 billion since 2008 by Congress. The report recommends that general revenue funds should not be used to make up shortfalls. The HTF will have to find other avenues of revenue or scale back the amount spent on federal highways to bring it in line with its budget.

Eliminate Airport Improvement Program Grants to General Aviation Airports

The report identifies $22 billion over ten years that can be cut from the Federal Aviation Administration's (FAA) Airport improvement Program (AIP). AIP receives the majority of its revenues from airline ticket taxes and provides funding grants used at large and small general aviation airports. The funds go support the needs of a limited audience and not to the major commercial airports that have a great need according to the report.

Eliminate Electric Motor Vehicle Tax Credits

Savings of $1.86 billion between 2013 and 2019 can be derived by eliminating the tax credits available to buyers and producers of electric motor vehicles. This particular income tax credit, which can be as much as $7,500, was created as part of the American Recovery and Reinvestment Act of 2009.

Eliminate the Essential Air Service Program

Over the ten year period, by eliminating the Essential Air Service Program, a program that subsidizes commercial flights for rural airports, the government can save $1.86 billion dollars. The report highlights examples of situations where a smaller subsidized airport is within reasonable distance to larger unsubsidized airports. The subsidy is an example of inefficiency in the funding programs of the FAA.

Cut Funds from Advanced Technology Vehicles Manufacturing Program

Four billion dollars can be saved from the unspent direct loan subsidy program that is designed to provide incentives for the production and purchasing of electrical vehicles. According to the report, funds have already been provided by Congress totaling $7.5 billion and savings can be derived by eliminating the future subsidy costs and the actual loan amounts that are at risk of not being repaid.

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