SPECIAL REPORT: Senate votes to bail out Highway Trust Fund

| 9/11/2008

Thursday, Sept. 11, 2008 – The U.S. Senate passed a bill on Wednesday, Sept. 10, to send $8 billion to the Highway Trust Fund and sidestep a major funding crisis.

The short-term fix, passed by the House of Representatives in July, came via an $8 billion transfer from the general Treasury into the Highway Trust Fund.

The action reverses a move by lawmakers in 1998 to transfer $8 billion in transportation funds into general funds.

Highway users applauded the vote to restore the transportation funds, but recognize that long-term funding solutions are needed in 2009.

“This $8 billion was Highway Trust Fund revenue to begin with,” said Todd Spencer, executive vice president of the Owner-Operator Independent Drivers Association. “It was not general fund money.”

Lawmakers and transportation officials anticipated that the shortfall in the Trust Fund would occur in 2009, but the crisis arrived much sooner.

U.S. Transportation Secretary Mary Peters announced Sept. 5 that the Trust Fund would be broke by Oct. 1 of this year because of a decline in fuel-tax revenues. She said that Americans driving fewer miles, combined with a busy summer construction season, tipped the scales – giving urgency to the Senate vote.

Following the Peters announcement, President Bush lifted a veto threat and demanded the bill be passed and on his desk by Friday, Sept. 12. Bush previously threatened to veto the bill, saying the fix amounted to nothing more than a shift in borrowing.

Once signed into law, the fix helps states avoid a cut in federal funding in 2009. A recent report published by the Federal Highway Administration predicted that federal funding would be cut 34 percent.

The Highway Trust Fund should remain solvent for approximately a year, officials said, but long-term solutions are needed.

“The lesson is clear; it’s time to embrace a new approach to transportation that does not rely on high fuel consumption and instead directs funds where they are actually needed,” Peters stated in reaction to the Senate vote.

“Congress must eliminate the billions in wasted spending, thousands of unneeded earmarks and hundreds of conflicting and contradictory special-interest programs in order to make sure states don’t face this situation again.”

Lawmakers are preparing to draft a new transportation funding reauthorization bill as the current law known as SAFETEA-LU gets closer to its September 2009 expiration date.

A number of senators and representatives issued comments in reaction to the Senate vote.

“As we move beyond this crisis, I look forward to addressing transportation funding comprehensively in the upcoming transportation reauthorization, because we must find a way to fund this program sustainably over the long term,” said Sen. Barbara Boxer, D-CA, who chairs the Senate Environment and Public Works Committee.

Boxer is one of the lawmakers who will take part in drafting the long-term funding plan in 2009.

– By David Tanner, staff writer