Tags: highway | trust fund | transportation | taxes

Washington Faces Highway Trust Fund Cliff in Coming Months

Thursday, 01 May 2014 10:20 AM

By Melissa Clyne

As D-Day for federal highway funding draws near, Congress is being forced to weigh a host of options, none of them ideal, to keep the fund solvent, Politico reported.

The Highway Trust Fund – the primary mechanism for funding federal highway programs – will run dry sometime in late summer unless Congress figures out how to keep that from happening.

The issues poses a conundrum for lawmakers, particularly Republicans, who don’t want it becoming a fly in the ointment during the important midterm elections, according to Politico.

Some of the options include rewriting the highway bill to change how it’s funded or transferring money from the general fund to keep the Highway Trust Fund from running out. Republican House Speaker John Boehner has indicated he won’t do that, Politico said.

Experts say the chances of Boehner and House Majority Leader Eric Cantor rewriting the highway bill in an election year are slim, according to Politico.

Then there’s the option of a temporary fix, something that would prove both costly – in the billions – and possibly muddy the GOP’s efforts to press forward on immigration reform after the fall midterms, as well as the president’s push for fast-track trade authority.

Democrats have different ideas about how to approach the problem. California Sen. Barbara Boxer has said she will release a bill next week that would address it with a "small inflationary budget increase," while the White House has already released its four-year, $302 billion legislative proposal, which according to Politico, has no chance of getting past the Republican-controlled House.

Tennessee Republican Rep. John Duncan, a member of the Transportation Committee, told Politico that it’s looking like a temporary fix may make the most sense.

"Everybody that I hear from says that we probably can’t pass a bill and it’s going to have to be put off with some temporary patch," Duncan said.

According to a Transportation for America report released Wednesday, beginning this fall, every dollar of gasoline tax revenues collected will be needed to cover the federal share of projects already promised to states, regions, and transit agencies.

Without Congressional action, according to Transportation for America, all federal tax money slated for the trust fund would be needed to pay for existing projects, meaning the coffers are empty for any new roads, bridges and transit that rely on federal dollars.

The American Society of Civil Engineers said last year that it would cost $1.6 trillion more than was currently being spent to bring all of the nation’s infrastructure to standard, NPR reported. The group’s 2013 Report Card for America's Infrastructure gave America’s infrastructure a grade of D-plus.

Since 1956, the Highway Trust Fund – funded by the federal tax on gasoline and diesel fuel – has paid for road construction and transit projects. The tax has not been raised since 1993. Some states, according to Transportation for America, have raised state gasoline taxes in an attempt to bridge the funding gap.

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