Category: The Dish

As the Highway Trust Fund approaches its fiscal cliff, the DOT is preparing to take drastic measures to ration funds for state infrastructure projects before the money runs out by the end of August. That is, unless Congress does something quick (ha!):

Any solution will need to pass the House of Representatives, whose own plan for funding DOT involves shuttering Saturday deliveries by the U.S. Postal Service—a plan that critics described as “unworkable” and “bad transportation policy.” The Congressional Budget Office estimates that DOT would require $8.1 billion to meet its obligations through Dec. 31. A spending solution that moved the deadline to the end of the year would push it past the November midterm elections, after which solutions like gas-tax increases might stand a chance. Senate Finance Committee Chairman Ron Wyden (D-Ore.) supports a $9 billion bill that would do exactly that: kick the ball down the road.

But the damage may be done already: Even if construction projects aren’t suspended in the middle of the summer construction season, states may be reluctant to launch big transportation infrastructure projects—especially since states depend overwhelmingly on federal funds for transportation spending. If the funding stream is shaky, the infrastructure planning will be, too.

Vinik looks over the options:

Congress is contemplating three proposals – none of them with broad support and all of them seriously flawed, for reasons I discussed last week. The White House proposal is not much better:

It’d use revenues from corporate tax reform as a short-term patch, which would mean we’ll be back in the same position four years from now. The optimal solution remains what it’s always been: Raising the gas tax by six cents in each of the next two years, then indexing it to inflation. By recouping the value lost to inflation and ensuring such erosion doesn’t happen in the future, this would make the Highway Trust Fund whole over the long-term.

It’s easy to see why the White House isn’t endorsing such a policy: It’s a political nightmare. Doing so would break the president’s promise not to increase middle class taxes. Beyond that, Republicans would never agree to it. Obama has spent enough of his presidency searching for a compromise by proposing politically risky policies. He’s not about to do it again with the gas tax. But that means it’s up to Congress to craft a sensible solution to this problem. So far, it’s not looking very good.

But Chris Edwards argues that excess spending is to blame for the shortfall, rather than a lack of tax revenue:

Tax-hike advocates say the gap is caused by insufficient gas tax revenues. It is true that the value of the federal gas tax rate has been eroded by inflation since it was last raised two decades ago. But the gas tax rate was more than quadrupled between 1982 and 1994 from 4 cents per gallon to 18.4 cents. So if you look at the whole period since 1982, gas tax revenues have risen at a robust annual average rate of 6.1 percent (see data here). In recent years, gas tax revenues have flat-lined. But the source of the HTF gap was highway and transit spending getting ahead of revenues, and then staying at elevated levels.

Previous Dish on the HTF here.

In a clip-laden essay, Oliver Farry surveys a history of cinema that turns the spotlight on itself:

Picture houses became a handy (some might say lazy) plot device for screenwriters, a place for characters to disappear into when pursued by police or the baddies. This was lampooned by Mel Brooks in Blazing Saddles where the villainous Hedley Lamarr ducks into an anachronistic cinema in the Old West and tries to get a student rate at the box office. …

Nostalgia for one’s youth forms much of the nostalgia for picture houses, which, in the movies is often elegiac.

This stands to reason – the cinema is a place for the young, for people with time and just enough money on their hands, for young lovers, student loners and groups of teenage friends. Peter Bogdanovich’s The Last Picture Show uses the closure of the local cinema in a small Texas town as a totem for the passing of an era, and of burnished youth. …

The ultimate cinema-nostalgia film is Giuseppe Tornatore’s Cinema Paradiso, in which a successful film director reminisces about his childhood helping projectionist Alfredo (Philippe Noiret) in the cinema in a Sicilian village. The film doesn’t stint on sentimentalism but it does have a pragmatic heart underneath it all. Alfredo encourages the boy, Toto, to leave the village to do something with his life, even obstructing a blossoming relationship with a local girl to do so. The cinema, palatial as it is for such a small town, exists only thanks to good fortune – after the initial one is burned down, costing Alfredo his eyesight, it is rebuilt thanks to the lottery winnings of a local, not exactly the wisest investment, it must be said. Toto’s future career is made possible by a film industry that stays alive, while the cinema, like many others in small towns, falls by the wayside.