Highway Bill Forces Federal Union to Swallow Bitter Pills

The final version of the $305 billion highway bill that President Obama is expected to sign contains two provisions affecting agency staffing bitterly opposed by the National Treasury Employees Union and several travel industry groups.

The Fixing America's Surface Transportation Act cleared by Congress on Thursday—which the Congressional Budget Office said would reduce the budget deficit by $1 billion from 2016-2025—is funded through an array of sources other than the traditional gasoline tax.

Among them is a controversial provision to outsource some of the Internal Revenue Service’s debt collecting to private contractors. Another would redirect $4 billion in customs fees and $3.5 billion in fees collected by the Transportation Security Administration.

NTEU had spent months protesting the privatizing of IRS debt collection, calling it ineffective and noting that two past experiences with the approach were unsuccessful according to statements last year from Commissioner John Koskinen, Taxpayer Advocate Nina Olson and IRS Oversight Board chairman Paul Cherecwich.

“Congress should not be giving the green light to debt collectors,” said NTEU National President Tony Reardon in a statement this week. “Nor should Congress allow critical funding to be diverted away from strengthening our borders and ensuring the quick and efficient flow of people and products through our ports.” NTEU argued that Customs and Border Protection could use the fee revenues to hire 2,700 needed officers.

Reardon told Government Executive the union will work to reverse the provision on private debt collection, noting that the “Federal Trade Commission and state authorities recently launched sweeping new investigations to stop these companies from hurting vulnerable Americans,….exactly the taxpayers that need assistance from a trained IRS employee to become compliant.”

The final bill adjusts customs fees for inflation, a move NTEU had favored. But rather than keeping the fees with the customs agency, the measure would allow their diversion to the highway trust fund. It also spells out specifics on how the private debt collectors shall be chosen and incentivized by the Treasury secretary while reimbursing the IRS’ budget for its administrative costs and requiring regular reports to Congress on the program’s effectiveness.

Funding highways from customs fees was also opposed by an array of travel industry groups. The U.S. Travel Association in a November letter to Congress said the move “will divert precious resources away from improving the already underfunded customs and entry process at major U.S. gateway airports. The travel industry has worked closely with CBP over the past three years to reduce the unacceptable passenger processing wait times at our nation’s airports that serve to discourage inbound travel and tourism to the United States,” the group stated. “Nevertheless, we know that in order to fully address the demand at our ports of entry, CBP may need to hire hundreds of new officers. By diverting the Customs user fees to pay for highways as proposed by the Senate, it will tie CBP’s hands and jeopardize the growth in travel and trade that is needed to create millions of American jobs across the country.”

Eric Katz contributed to this report.

(Image via Tim Roberts Photography / Shutterstock.com)