MN-02 : Kline Protest results in 8% Cut in Federal Dollars for Minnesota

The next time that your filling up your tank, remember that John Kline’s protest is sending your Minnesota tax dollars elsewhere.
That’s right.
For every gallon of gas that you buy, you pay a Federal Tax of 18.4 cents per gallon. Originally these tax dollars went into the general treasury, but since the Federal-Aid Highway Act of 1956 was established, it stipulated that 100% of the gas tax be deposited into Highway Trust Fund. Those dollars are then re-distributed back to the states. If your congressman is doing his job, all your Federal Tax dollars will be returned to your state resulting in jobs and well maintained infrastructure.

But John Kline decided to protest the system. The result according to Bob Hofstad of MnDOT is that the state receives about 92 cents for every dollar that its residents send to Washington. According to Tony Kellen, president of the Minnesota Public Transit Association, about 40 percent of the money in the state's transportation budget comes from the federal gas and diesel tax.

Now, Kline may give the impression since his favorite imported vodka is SurReal (from Latvia) that he would be a pretty savvy investor, but an 8% loss is not a good return on our tax dollars. Now, maybe private citizen investor Kline is okay with that, but these are our public dollars.

Kline’s concern is with the “earmark” system whereby Congress authorizes specific projects. We can all agree that there are many examples of “wasteful Washington spending” but not all “earmarks” are wasteful.

John Kline believes the “earmark” system “is a broken process” and has pledged not to seek earmarks. According to Kline, the best way to fight an irrational process is not to take part in it but protest it, as a handful of other congressional members have agreed to do. Kline is now joined by Sixth District Congresswoman Michele Bachmann in taking the “no earmarks pledge”.

Some may see that as a noble cause, but taxpayers should view this as unwise idealistic quixotical lonely persuit using our tax dollars.

There are better ways to address the abuses in the “earmark” system.

First District Congressman Tim Walz is a practioner of transparency in his funding requests. According to Walz, “Minnesota sends more money to Washington that it gets back, and it’s appropriate for us to advocate for the good use of tax dollars (in the district).”
Walz stands up and fights for our dollars, while Kline is inclined to stand in protest.

As I wrote in August, 2007, members of Congress must work with state DOT so that monies are allocated based on the needs and not a Congressman’s personal vision.

So transparency and MnDot agreement is what is needed.

According to the Star-Tribune, Kline's rejection of earmarks has reverberations in Second District.

Voters need to consider Kline’s stance versus his challenger, Steve Sarvi … but also John McCain and Barack Obama.

McCain has vowed to veto all legislation that contains “earmarks” … another idealistic quixotical lonely persuit, but as President he could affect some spending. If he is successful, in theory, Congress will have no impact on how gas tax dollars are returned to the states … it is possible that our 8% loss could grow if the new McCain Administration deemed that infrastructure needs are greater in faster developing states like Arizona.

Barack Obama will address the infrastructure challenge by creating a National Infrastructure Reinvestment Bank to expand and enhance, not supplant, existing federal transportation investments. This independent entity will be directed to invest in our nation’s most challenging transportation infrastructure needs. The Bank will receive an infusion of federal money, $60 billion over 10 years, to provide financing to transportation infrastructure projects across the nation. These projects will create up to two million new direct and indirect jobs per year and stimulate approximately $35 billion per year in new economic activity. link

The next president will enter office with a fragile economy. No doubt that some stimulus package will be suggested. One of George Bush’s first actions was in June of 2001 with the “Economic Growth and Tax Relief Reconciliation Act of 2001" which included tax cuts and rebate checks. McCain is talking of maintaining those tax cuts (and the other Bush cuts.) Obama may act instead to push investment in infrastructure that will produce jobs.

If Kline is re-elected and McCain is president, “earmarks” may be over … however if Kline is re-elected and Obama is president, Minnesota will have one Congressman standing in protest.

Does Jim Oberstar Know Best ?

Quick, how many of you recall the 50’s television program Father Knows Best ?

Well, not only is that a question but the series was actually based on the question: Does Father really know what is best ? Yes, Jim Anderson could not only lose his temper, but occasionally be wrong.

If Jim Anderson could be wrong, could Jim Oberstar also be wrong ? Not according to Oberstar when it comes to who knows best about transportation funding.

On Sunday, CSPAN Newsmaker program, link , Rep. James Oberstar (D-MN), Transportation Committee, Chairman was interviewed by John Hughes, Bloomberg News, Transportation Reporter & Kevin Diaz, Minneapolis Star Tribune, Washington Correspondent.

Diaz had previously reported that Oberstar plans to offer a temporary 5-cent-a-gallon gas tax for a national reconstruction program. Diaz speculates that this could be a campaign issue that some such as freshman Democrat Tim Walz may not want to have to vote on due to the higher taxes. (Personally, I find that speculation unprofessional … either get a quote as Diaz did from Ramsted but don’t take a quote from the executive director Club for Growth and imply that is Walz’s position.)

Oberstar correctly argued that the gas tax is a pure user tax. Yet, Norm (TaxCut and Spend) Coleman says ”I'm not yet prepared to accept a gas tax increase as the solution" and backs Bush’s assertion that it is a matter of priority.

In this case, both Oberstar’s user fee and Coleman’s prioritization makes sense.
Many Republicans embrace the idea of a Consumption-Based Taxes, so is Coleman’s reluctance that he does not want to actually vote for a tax increase … especially in a pre-election year ?
Where Oberstar fails is his impassioned defense of earmarks. He stated that Congress has a better idea on where the monies should be spent than individual state's Department of Transportation. That is a problem. A Congressman should consult with the state’s DOT and ensure that their needs are addressed. When the Congressman and the DOT disagree, there needs to be input from the state Legislature. The SAFETEA-LU 2005 legislation includes funding that Minnesota’s DOT did not rate as a high priority …that’s wrong. The complaints concerning the Alaska Bridge to Nowhere were expressed loud and clear by fiscal conservatives and the Main Stream Media … but they still got in the final bill. But that doesn’t mean that the monies are being spent … just last week officials of Lee County Florida turned down $10million for a project they did not want.


Recent polls indicate that Congressional performance is unsatisfactory in the voters mind. There were a number of reasons why Democrats defeated Republicans in 2006 … and corruption and earmarks were at the top of the list.

Congressman Oberstar, in this instance, you don’t know best. Blindly accepting the earmark system does not make sense. Yes, earmarks can be purposeful. They need to be discussed with state DOT and represent fairness in allocating the monies based on the America’s needs.

DME Problems Exposed Infrastructure Needs

The FRA decision to reject DM&E’s loan request should be applauded in that they made a merit-based decision as opposed to the back door efforts to fund this project by Senator Thune.

The DM&E loan proposal highlighted a number of issues that need to be addressed. What is the future of rail in the US? And, what responsibility does the government have to provide funding for railroads?

The magnitude of this loan and the viability of the carrier concerned many fiscally responsible people. Yet, historically government has supported rail … and there is no reason that it should not in the future. But what is needed is a rational plan that does not favor one company over all others.

The railroads were built for the 19th Century; Congress needs a comprehensive plan for the 21st Century. Congressman Oberstar proposed legislation last session entitled the Railroad Track Modernization Act of 2006 and Transit Rail Accommodation Improvement and Needs Act. It would promote Transit Use & Develop a Rail Infrastructure Program that would create a stimulus package of infrastructure investment that upgrades the pipeline for biofuels – the freight rail system – in order to get an affordable and reliable supply of biofuels to market.

DM&E is in trouble as reflected in yesterday’s stock performance by LB Foster, which owns 13.4% of the DM&E diluted stock and saw its stock value drop 21 %. DM&E currently serves a market and it needs to address its safety record and operation.

Before Thune attempted to hijack the Federal Railroad Authority's program in the 2006 Transporation bill with provisions to "alleviate rail capacity problems" and removed any prohibition on the size of any single loan, it was designed to help railroads fix existing track with impetuous that small railroads would need the monies. That is still true today.

As a fiscal conservative, I opposed a loan that would create a market imbalance while rewarding one company while other railroads are investing in their businesses. However, I do support the orginal provisions of the FRA program. But any Congressional action should be done in a transparent manner that is based on merit and not lobbyists influence.