The $100 Billion Question Facing the New Republican Majority

A huge challenge for the next Congress will be finding the funds to keep the Highway Trust Fund solvent when the current patch expires on May 31.

2 minute read

November 14, 2014, 1:00 PM PST

By Irvin Dawid


Assuming Republicans aren't so focused on overturning President Barack Obama's environmental regulations when the new Congress meets next year, they will devote some time to filling the Highway Trust Fund shortfall, the difference between transportation spending and fuel tax receipts, estimated at about $18 billion annually and expected to widen due to fuel efficiency standards. The 10-month House Republican patch bill met the shortfall by using general fund savings gained by pension smoothing.

Ashley Halsey III, who reports on national and local transportation for The Washington Post, writes that the new Congress will have only five months to locate "(a)n estimated $6.5 billion (to) keep highway projects afloat and construction workers employed until the 2015 fiscal year ends Sept. 30. But it would take about $100 billion in additional revenue to fund a six-year transportation bill that virtually everyone considers ideal."

The most viable way to raise a big chunk of transportation money this year would be to increase the tax on gas and diesel fuel. Bumping up diesel by 15 cents a gallon and gas by 10 cents would raise an estimated $120 billion to fund a six-year bill.

A similarly challenged option: putting a percentage tax on the sale of gas and diesel. That would haul in $218 billion over six years.

While House Speaker John A. Boehner (R-Ohio) recently called a highway bill "in the realm of doable, and Rep. Bill Shuster, chairman of the House Transportation and Infrastructure Committee, expressed optimism on funding a long term reauthorization, "privately most acknowledged that until there is consensus on finding more money, transportation may be doomed to limp along in perpetual crisis," writes Halsey.

A longtime observer of the process predicted that the most likely outcome when the May deadline rolls around is another extension with a patchwork of additional funding sources, something less than the six-year bill state officials say is vital if they are to make decisions about multi-year projects.

[Hat tip to Jackie at Climate Plan]

Monday, November 10, 2014 in The Washington Post

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