Deficit Plan Suggests Boosting Transport Funds

A new plan to slash the federal budget deficit through tax hikes and spending cuts also suggests that policymakers find ways to boost spending on transportation infrastructure.

A report from The Bipartisan Policy Center proposes a freeze on discretionary government programs in annual appropriations but says that should apply to overall spending in that category as a whole, allowing some programs to grow.

Such a freeze, it said, would mean scouring the budget for savings in many areas while "addressing the enormous backlog of infrastructure needs," growing costs for homeland security and some other projects.

The center's Debt Reduction Task Force, which issued the report, is co-chaired by former Senate Budget Committee Chairman Pete Domenici, R-N.M., and Alice Rivlin, formerly vice chair of the Federal Reserve Board, White House budget director for President Clinton and head of the Congressional Budget Office.

This plan is the second in a week to offer detailed and sharply differing options for tackling the budget deficit, following one by the co-chairs of a panel appointed by President Obama. Theirs was a draft, to be followed by a full commission report next month, and included a 15-cent increase in federal motor fuel taxes to boost the Highway Trust Fund.

Both groups are issuing proposals while President Obama and congressional leaders prepare to negotiate over large tax cuts that are due to expire Dec. 31 and as Congress begins its lame duck session after Nov. 2 elections gave Republicans control of the House come January.

The BPC plan proposes spurring the economy and job creation through a one-year holiday on payroll taxes into Social Security, and would cut and simplify income tax rates but add a new sales tax devoted to deficit reduction.

It also lists a number of program-specific fees and taxes that lawmakers could increase to generate revenue or cover federal costs. Those include fees on shipping in the St. Lawrence Seaway, on railroads for safety reviews, on barge lines using the federally maintained inland waterway system and on businesses that benefit from trade promotion activities at the Commerce Department.