Gas tax: wrong additive
By voting to accept a five-cent-a-gallon increase in the gasoline tax, the US House of Representatives has taken the first step in fashioning a national jobs program at a time when domestic unemployment is at a 1930s level of 10.8 percent. The Senate should swiftly join the House in approving the program to finance highway and mass transit construction projects. While the program itself will obviously do little to redress the plight of the more than 11 million Americans out of work - and in fact may employ far less than the 300,000 new workers that the Reagan administration argues will be hired under the plan - it represents an important symbol that the federal government will now directly intervene to spur the lagging US economy.
Still, it would be sadly ironic if the legislation - as now passed by the House - carried the seeds of putting as many Americans out of work as back into useful enterprises. Yet, that is exactly what the House bill might do, with its questionable ''made-in-America'' provision regarding use of domestic-made construction materials. Under the terms of the domestic content amendment, which was added to the measure during final stages of House action, repair projects using federal dollars would have to use construction materials, such as cement, made within the US. Such a requirement, enacted in the late 1970s, is already in effect for federal mass transit programs. The amendment would thus extend the provision to roadway projects as well.
It is not difficult, of course, to understand the reasoning behind such a provision. The objective of the jobs bill is to put people back to work. Why not , so the argument goes, put even more Americans to work by having the workers on the jobs projects use only US-made construction products? Unfortunately, good intentions (and questions) do not always make good laws - or add up to sound economics. Such an approach - codified into law - would be inflationary, prop up sometimes marginal or inefficient firms, and work against the fact that today's economy is a global economy. The best test for any materials used in a building project of whatever nature would still seem to remain that of the time-honored competitive bid - with the award going to the manufacturer of the best product at the most appropriate price.
The made-in-America provision in the highway program is only the latest in a series of dubious protectionist schemes that would ultimately - if enacted into law - inhibit US world trade and thus work against US jobs. One such measure aimed against Japan, with several hundred congressional cosponsors, would require that cars sold in the US be made out of predominately American-made parts by the mid-1980s. US trade negotiator Bill Brock has correctly called this measure ''one of the worst pieces of proposed legislation in recent history.''
Exports now account for 8.5 percent of the US economy. Thus, it would be counterproductive for Congress to pass laws that restrict imports - and merely prompt other nations to enact new measures to keep out US exports. The Senate should quickly reject the made-in-America section of the new gas tax bill.
