Highway Trust Fund fix still alive, despite threat in Senate

| 9/9/2008

Uncomfortable with the method of bailout, two Senate Republicans have blocked a bill that would authorize the transfer of $8 billion into the federal Highway Trust Fund.

Two senators, Judd Gregg, R-NH, and Jim DeMint, R-SC, blocked an attempt by Senate leadership on Monday, Sept. 8, to have the bill passed by unanimous consent. Senate leaders were looking for another way to get the bill approved on Tuesday.

The House approved the bill, HR6532, in July on a vote of 387-37. President Bush threatened at that time to veto it, but administration officials now say he would sign it. U.S. Transportation Secretary Mary Peters said the president now supports the stopgap measure, although reluctantly.

The bill calls for $8 billion to be transferred from the general Treasury into the Highway Trust Fund to shore up the fund until Congress can pass a long-term funding mechanism.

Sen. Max Baucus, D-MT, and Sen. Chuck Grassley, R-IA, of the Senate Finance Committee support HR6532.

They said if a fix is not enacted soon, states stand to lose 34 percent of their federal funding in 2009.

The Federal Highway Administration estimates that the payout to states in 2009 would drop to $24.4 billion, far short of the $35.3 billion authorized to be paid to states through the current fiscal year.

Peters told reporters on Friday, Sept. 5, that the Trust Fund will have a zero cash balance on or about Oct. 1 of this year. Earlier projections put the Trust Fund into the red sometime in 2009. Peters urged lawmakers to act quickly and approve the short-term budget transfer.

Peters said the Trust Fund is not holding up because Americans continue to drive less, and that means there is less revenue coming in from federal fuel taxes.

Next year is a reauthorization year for Congress as the current transportation funding law, known as SAFETEA-LU, is set to expire Sept. 30, 2009.

A number of influential lawmakers on Capitol Hill – including U.S. Rep. James Oberstar, D-MN, chairman of the House Transportation and Infrastructure Committee – are preparing to draft the next reauthorization bill.

Oberstar and other House and Senate leaders are urging their colleagues to release their hold on Bill HR6532.

Highway users continue to speak up on the issue of transportation funding as well.

The American Highway Users Alliance praised Secretary Peters and President Bush for endorsing bill HR6532 to shore up the Trust Fund.

“These taxes, paid by motorists at the pump, were quietly transferred out of the fund in 1998 to be used for non-highway purposes,” alliance officials stated on Monday.

“Now that the money is desperately needed, it is important that Congress restore the funds. Unless these highway user fees are restored, the Federal Highway Administration will be unable to pay its bills for road, bridge, and safety projects currently under way.”

– By David Tanner, staff writer