SPECIAL REPORT: DOT says Highway Trust Fund is broke

| 9/5/2008

Friday, Sept. 5, 2008 – The Highway Trust Fund is going broke much faster than anticipated, U.S. Transportation Secretary Mary Peters announced Friday, Sept. 5.

Officials anticipated the fund would bottom out sometime in 2009, but Peters told reporters by teleconference that there will be zero cash on hand by the end of September.

The reason for the shortfall, she said, is because Americans are driving fewer miles and that means less funding generated by the federal motor fuels tax.

Peters urged federal lawmakers to pass legislation as soon as possible to move $8 billion into the Highway Trust Fund. Peters said President Bush now supports a short-term fix passed by the House in July, which the president originally threatened to veto.

Peters said the short-term solution is not the most desirable, but is necessary. It involves moving funds from mass transit to highways.

“Taking money from other pressing national priorities to plug a hole caused by poor fiscal discipline sets a dangerous and disturbing precedent,” Peters said.

She placed blame on members of Congress for not acting soon enough to fix the problem.

“When it came time to address the rapidly growing Trust Fund solvency issue, Congress chose to do nothing,” she said. “Instead, members continued to earmark, continued to divert transportation dollars to lighthouses and museums, and continued to spend like there was no tomorrow.”

Members of Congress fired back within hours, blaming the White House for blocking previous measures involving the Trust Fund.

“It’s about time this administration accepted the magnitude of the looming crisis facing the Highway Trust Fund and stopped being a roadblock to a solution,” said Rep. Peter DeFazio, D-OR, chairman of the House Subcommittee on Highways and Transit.

House Transportation and Infrastructure Committee Chairman James Oberstar, D-MN, issued a statement urging senators to quickly pass the Senate version of HR6532. That bill passed the House with a vote of 387-37, despite the White House veto threat.

U.S. Rep. John Mica, R-FL, ranking Republican on the House Transportation and Infrastructure Committee, also urged senators to pass the bill.

“We anticipated solvency problems with the Trust Fund, but those problems have materialized much sooner than expected,” Mica responded in a statement.

Peters said that in addition to the short-term fix, lawmakers must come up with a long-term solution for highway funding as they prepare to write the next highway funding reauthorization bill due in September 2009.

Peters dismissed the federal fuel tax as a viable means to fund highways as people drive more fuel-efficient vehicles and cut consumption.

Highway users, including truckers, reacted to Peters’ downplaying of the preferred method – one that has funded highways and bridges for over 50 years – by calling it hasty.

“The fuel tax is not dead,” OOIDA Director of Legislative Affairs Mike Joyce told Land Line.

“It’s the most cost-effective and easiest type of user fee to administer. I think that reforming the way highway funding is utilized should be part of the solution. We need to be taking stock of what we have and how we’re using it.”

Joyce said Peters has little room for laying the blame at the doorstep of lawmakers.

“The DOT has essentially been starving the Highway Trust Fund to death,” he said.

“They’ve had one vision and that’s for selling our existing highways and letting the private sector run everything. That proclaimed solution is not the be all, end all solution for transportation.”

– By David Tanner, staff writer