By Greg Sitek
“May you live in interesting times” is an English expression purported to be a translation of a traditional Chinese curse. Despite being so common in English as to be known as “the Chinese curse“, the saying is apocryphal, and no actual Chinese source has ever been produced.
The nearest related Chinese expression is “宁為太平犬，莫做亂离人” (nìng wéi tàipíng quǎn, mò zuò luàn lí rén), which is usually translated as “Better to be a dog in a peaceful time, than to be a man in a chaotic (warring) period.” (1)
As you read through the 2016 forecasts in this issue you’ll notice that predictions for the coming year are encouraging because they allude to an overall improvement in the economy: GDP + 2 %(+/-),
Nonfarm unemployment 5 % (+/-); motor vehicle & arts sales kissing $94 billion; US auto production 17 billion in 2015 and 20 billion by 2017, housing starts bumping 1.4 million units (combined) and there’s more goo news. Oh yes, construction, non-residential could be up as high as 4% give or take a point.
A major legislative accomplishment was the passing of the FAST Act (“Fixing America’s Surface Transportation” Act) — a five-year, $305 billion initiative (including $207.4 billion for the federal highway program). It only too something like 10 years and 35 extensions to produce the FAST Act (I wonder if there might be a touch of sarcasm in naming this piece of legislation.)
Unfortunately Congress chose not to replenish the Highway Trust Fund (HTF) by increasing user fees (e.g., increasing the gas tax). Instead, the roughly $70 billion needed to fully fund the FAST Act and supplement the projected five-year HTF shortfall will essentially be a combination of general fund transfers resulting from savings and revenues generated by:
- Passport revocation for “seriously delinquent” taxpayers
- Federal Reserve Board dividend payment reduction and surplus account transfer
- Strategic Petroleum Reserve sale of 66 million barrels of oil
- Customs fees on airline and cruise passengers
- Internal Revenue Service hiring private tax collectors
- Office of Natural Resources Revenue royalty overpayment fix
While five-years of guaranteed funding is welcomed and will restore much needed near-term certainty for transportation construction programs, there is work left to do. AED and other industry organizations will continue to work with lawmakers to identify real and sustainable revenue streams to increase and stabilize the HTF for decades to come.
I remember that time before there was a six-year highway bill when we, the industry, waited for a proclamation of how much money was going to be allocated from the general to cover highway construction. It was the other time when potholes grew fasted than corn. We need a Highway Trust Fund because we can’t depend on our representatives in Washington to keep their promises and provide the funds necessary to maintain and upgrade our highways.
That aside, 2016 is also an election year. What will happen with oil prices? Or, what about gold? Silver? Interest rates? Oh they did go up 0.25% as we approached the end of 2015.
Of course there all the other concerns that we as a nation face – ISIS, terrorism, climate,, education, safety, healthcare, wages, insurance, etc. The list is endless. During an election year we are a nation in flux. Is this good? Or, is this bad? One thing for certain, it is interesting…
(1) Wikipedia (https://en.wikipedia.org/wiki/May_you_live_in_interesting_times)