9 - Barriers to trust fund adoption: the failed cases of energy security and lead abatement

Summary

Political institutions – even mechanisms as arcane as trust fund structures – do not arise automatically. They must be created. What policy actors fail to do is thus at least as theoretically important as what they do. This chapter briefly explores two cases – the Energy Security Trust Fund and the Lead Abatement Trust Fund – where Congress considered proposals to establish new government trust funds but ultimately rejected them. The analysis provides further evidence that trust funds are not casual or inadvertent creations; politicians oppose and support these devices with a purpose. In the final section, I draw some conclusions about the politics of trust fund adoption from the cases examined here and in the preceding five chapters.

Energy security trust fund

When proposals to create new trust funds fail, Congress typically rejects both the substantive expenditure program and any accompanying dedicated tax. Yet Congress in 1980 accepted a Carter Administration proposal to levy a windfall profits tax on oil industry profits but spurned its request to dedicate the revenues for an Energy Security Trust Fund. The Energy Security case is an excellent limiting case to explore for two reasons. First, there is evidence that the public was receptive to this idea. Indeed, a Harris Survey found that 85 percent of respondents favored the proposal, with only 10 percent opposed (5 percent were not sure). Second, much of the debate over the proposal in Congress focused explicitly on the appropriateness of trust fund financing.