New Year's Eve could be a bad day for the Obama administration if Congress doesn't act to extend the payroll tax cut. But while that fight dominates year-end conversations on Capitol Hill, lawmakers have paid scant attention to another worker benefit that also is set to expire Dec. 31--the mass transit commuter benefit. Without congressional action, the $230 that transit commuters are now allowed to shield from taxation every month will be reduced to $125 per month. The American Public Transportation Association, Transportation for America, and the National Treasury Employees Union all have weighed in urging lawmakers to extend the current benefit as part of any final package that leaves Capitol Hill.
(My take: The chances of action are pretty slim. No one I talk to can tell me how much an extension of the current commuter benefits would cost, a bad sign for last-minute haggling. And lawmakers have their hands full trying to keep the government funded.)
Mass transit advocates are crying foul because the reduced benefit would put them in the all-too-familiar position of being at a disadvantage with respect to the formidable highway and automobile lobby. As it turns out, only transit riders will see their tax shelters reduced next year; drivers will still be eligible for a $230 per month pre-tax commuting benefit. "They'd like you to start driving to work, where you can get $230 for parking deducted from your paycheck tax free," Transportation for America's Deputy Communications Director Stephen Lee Davis ranted in a blog post.
How important is this transit benefit? Would it do any harm to extend it? Why has it gotten lost in the congressional shuffle? Is mass transit really at a disadvantage with respect to roads and automobiles? Aside from tax benefits, are there other ways to encourage mass-transit commuting?