Huge Taxpayer Bailout Of Highway Fund

Taxpayers, not transit users, will bail out motorists to keep the highway trust fund solvent. The administration had initially proposed to use transit funds and veto using general funds, but with the fund scheduled to go bust in Oct., they relented.

"With the nation's highway fund running out of money faster than expected, the Bush administration on Friday (9/05) pulled a political U-turn and urged Congress to approve an $8 billion rescue plan that the White House had previously opposed.

To address the shortfall, the House of Representatives earlier this summer overwhelmingly voted to transfer money from the government's general fund to bail out the highway account. The White House threatened to veto that measure as a dangerous precedent that would shift the costs for road projects from highway users to taxpayers at large."

"At current spending rates, we will start the new fiscal year on Oct. 1 with a zero balance in the trust fund and will continue to spend more than we take in," (Secretary of Transportation Mary) Peters said.

On Friday, Peters explained the shift on highway funding by saying that the administration essentially had no choice but to support the transfer.

The administration had earlier proposed borrowing money from mass transit to fund highways, but that idea ran into congressional opposition because commuters are increasingly turning to bus and rail lines because of high gasoline prices."

Thanks to John Hartz

Full Story: Bush pulls U-turn as highway funds run out

Comments

Comments

Michael Lewyn's picture
Blogger

Bye bye argument

I guess we can now officially wave good-bye to the argument that roads "pay for themselves" and are thus superior to transit.

messed up

I agree this is a horrid idea. But, before you oversimplify this concept, you should acknowledge that a lot of highway funds are allocated to transit and bike paths and other things at the regional/local level. It's not quite as straightforward as you have presented.

Nevertheless, this could spark an even greater movement to privatizing highways, a better way to go in my opinion.

This is true

When I was a city planner, we used transportation funds for just about everything EXCEPT roads. Bike paths, landscaping, you name it.

Road Funding

So where does the funding for all the roads come from?

Looking around, I see lot more freeways and roads than bike paths. If all the transportation funding goes to bike paths and landscaping, how did they get funding to build all those freeways and roads? Maybe ginsocal can show us a picture of an American city or suburb that is dominated by bicycles and landscaping rather than by cars.

(Answer: freeways largely from the gas tax, with subsidies from other taxes. Local roads from the general fund, paid for by everyone, including bicyclists who use one-tenth as much road space as car drivers.)

Charles Siegel

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