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Solutions to Highway Fund Shortfall in the Slow Lane

Kevork Djansezian/Getty Images File Photo
The Highway Trust Fund, which is on the hook for about $45 billion in road projects this year, will drop below a sustainable level in late July unless lawmakers can enact legislation to fund it.

Congress is once more setting itself up for a last-minute funding crisis, set to hit right before lawmakers take off for their August recess.

Sometime in late July, the Highway Trust Fund, which is expected to pay for $45 billion in road projects this year, will drop below a sustainable level, preventing federal officials from sending money out to states. That could produce huge problems in states that depend on federal money for contracts they’ve already signed. In principle, the trust fund should be entirely funded by federal gas tax receipts. But rising fuel efficiency in new vehicles, coupled with a slowdown in Americans’ driving habits is leaving revenues stalled, even as states face costly repairs to aging infrastructure.

So far, there is little sense of panic among lawmakers about the looming deadline. This is not the first time the trust fund has run low, after all. In 2008, for instance, Congress agreed to bail out the fund with $8 billion in general fund money. Subsequent years have brought more bailouts of the fund to keep it solvent.

What’s different now is the fiscal 2014 House resolution (H J Res 59) that stipulated that any transfer to the Highway Trust Fund must be offset. The two-year budget agreement crafted by Washington Democrat Patty Murray and Wisconsin Republican Paul D. Ryan, the chairs of the Senate and House budget committees, did not overwrite that provision, leaving it in effect for House members.

And once this funding crisis is resolved, another one looms in the fall. The legislation authorizing transportation programs expires at the end of the fiscal year, in September. That may mean lawmakers would have to interrupt their re-election campaigns to extend transport programs that touch virtually every corner of the country.

In all likelihood, however, legislation to finance the trust fund would also include an authorizing extension. The last two surface transportation authorizations survived on serial extensions before full bills covering the six-year authorization cycle were enacted.

At this point, only House Republicans have put forward a suggestion to keep the trust fund solvent. Their plan would cut most postal deliveries down from six days a week to five and use the savings to maintain the Highway Trust Fund for another year. That would give the 114th Congress until May 2015 to come up with a long-term transportation funding solution.

Their idea has been roundly panned by Democrats, labor unions and conservatives at Heritage Action. Senate Democrats say they’re working on their own ideas to keep highway programs afloat but have been mum on the details.

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