Highway-Funding Crisis Has Lawmakers Scrambling

Traffic jams up on the Kennedy Expressway leaving the city while inbound traffic remains light as motorists hit the road for the start of the Memorial Day weekend on May 23, 2014 in Chicago, Illinois.
National Journal
Billy House
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Billy House
June 2, 2014, 4:01 p.m.

Mem­bers of the Sen­ate Fin­ance Com­mit­tee will meet be­hind closed doors Wed­nes­day to try to find a way to pre­vent the High­way Trust Fund from go­ing broke at the height of the con­struc­tion sea­son this sum­mer.

The pan­el’s ses­sion comes on the heels of a House Re­pub­lic­an pro­pos­al to shore up the high­way fund for a year by al­low­ing the U.S. Postal Ser­vice to end Sat­urday de­liv­er­ies and put­ting the sav­ings in­to in­fra­struc­ture pro­jects — a plan ri­diculed and dis­missed by two Sen­ate com­mit­tee lead­ers.

“Strange” and “un­work­able” was the re­sponse of Sen­ate En­vir­on­ment and Pub­lic Works Com­mit­tee Chair­wo­man Bar­bara Box­er, D-Cal­if. “This idea is a jobs killer which does not even fund the High­way Trust Fund for a long enough peri­od of time to provide the cer­tainty that states, cit­ies, and busi­nesses need.”

Sen­ate Home­land Se­cur­ity and Gov­ern­ment­al Af­fairs Chair­man Thomas Carp­er, D-Del., called the House GOP idea “a non­starter” that “kicks the can down the road yet again on resolv­ing two is­sues — fix­ing the Postal Ser­vice and the trust fund.”

But neither Box­er nor Carp­er offered an al­tern­at­ive plan for res­cuing the high­way fund, which will reach a zero bal­ance by late Ju­ly or early Au­gust without a sig­ni­fic­ant in­fu­sion of cash.

Box­er, in her re­sponse to the House plan, did men­tion that her com­mit­tee had done its job — a ref­er­ence to its ap­prov­al in May of a six-year trans­port­a­tion bill that would keep fed­er­al spend­ing on high­ways and mass trans­it at cur­rent levels. But that bill did not dir­ectly ad­dress the loom­ing High­way Trust Fund short­fall, or how to re­plen­ish it.

That is­sue is be­ing left for the Sen­ate Fin­ance Com­mit­tee to re­solve, and it is that pan­el’s chair­man, Ron Wyden of Ore­gon, who has called for Wed­nes­day af­ter­noon’s meet­ing of pan­el mem­bers from both parties, where only a few staffers are to be present. The private ses­sion will be to “dis­cuss pro­pos­als and dir­ec­tion for the High­way Trust Fund,” said Wyden spokes­wo­man Lind­sey Held. “More to share after that dis­cus­sion.”

Time is run­ning out. Thou­sands of high­way and bridge pro­jects and hun­dreds of thou­sands of jobs could grind to a halt in two to three months un­less a solu­tion is found to keep the fund’s bal­ance above zero.

In a memo Fri­day to rank-and-file House Re­pub­lic­ans, Speak­er John Boehner and oth­er GOP lead­ers floated the idea of stop­ping most Sat­urday mail de­liv­er­ies — ex­cept for such things as pack­ages, medi­cine, and pri­or­ity or ex­press mail. That would lead to an es­tim­ated $10.7 bil­lion in sav­ings over 10 years that could be used as an off­set to a gen­er­al-fund trans­fer to keep the trust fund run­ning through May 2015, the Re­pub­lic­ans said. The short-term fix would also al­low time for a longer-term solu­tion to the high­way fund’s sta­bil­ity.

The di­lemma stems from the fact that 90 per­cent of the fund’s rev­en­ue comes from the 18.4-cents-per-gal­lon fed­er­al tax on gas­ol­ine and the 24.4-cents-per-gal­lon tax on dies­el, neither of which has been in­creased since 1993. Over that 21-year peri­od, mo­tor-vehicle fuel ef­fi­ciency has in­creased sig­ni­fic­antly — mean­ing mo­tor­ists are us­ing far less fuel — and the fund has not kept pace with rising con­struc­tion costs. In fact, law­makers have trans­ferred $54 bil­lion to the high­way fund from the gen­er­al fund since 2008 in or­der to meet its ob­lig­a­tions.

Nev­er­the­less, House Ma­jor­ity Lead­er Eric Can­tor and oth­er Re­pub­lic­ans have shut the door on the idea of rais­ing the gas­ol­ine tax or rais­ing tolls dur­ing this midterm elec­tion year. And an over­haul of the na­tion’s tax code, which might have in­cluded a ded­ic­ated stream to fully fund road pro­jects, has also been put on hold un­til at least next year.

Wyden, too, has ques­tioned adding new tolls on ex­ist­ing roads or char­ging mo­tor­ists based on the miles they drive, say­ing those pro­pos­als raise ques­tions about pri­vacy and feas­ib­il­ity. He also says tem­por­ary fixes or emer­gency patches are not the an­swer, either, and that it will take up to $100 bil­lion just to keep the trust fund solvent for the next six years.

One idea that Wyden has talked about is re­sur­rect­ing the Build Amer­ica Bonds pro­gram, which was part of the stim­u­lus strategy in 2009. By the time the pro­gram ended after two years, Wyden said at a hear­ing last month, it had helped fin­ance more than $180 bil­lion worth of pro­jects from one end of Amer­ica to the oth­er.

“The les­son is clear: There are hun­dreds of bil­lions of dol­lars in private cap­it­al sit­ting on the Amer­ic­an side­lines. Surely some of that can be in­ves­ted in Amer­ic­an in­fra­struc­ture,” he said.

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