Here’s a look at the Highway Trust Fund that is notoriously in danger of going in the red. For now, there’s a short-term fix to keep it afloat.
By Brian Ethridge
It felt like an eternity went by before Congress passed a bill to fund the Highway Trust Fund through May 2015. Unfortunately, for as long as it took, nobody ended up happy with the outcome. Congress had months to work out a long-term plan that ultimately solves nothing. Below is a timeline of events that took place leading up to the patch. (For an electronic version of this timeline, go to betterroads.com/highway-trust-fund-2014-timeline-of-events.)
It was clearly early in the year that the HTF was running out much quicker than originally thought. Transportation Secretary Anthony Foxx warned Congress in February (betterroads.com/foxx-htf) that the HTF would begin bouncing checks in August is a new deal wasn’t agreed upon.
“A number of commentators have expressed concern about what happens to transportation spending when the Highway Trust Fund runs out in fiscal year 2015,” Foxx said at the time. “Little do some of them know that the Highway Trust Fund is on track to bounce checks before fiscal year 2015—as soon as this August.”
States began to cut back on construction projects once it appeared the HTF could shortfall as early as July (betterroads.com/u-s-dot-highway-trust-fund-could-shortfall-as-early-as-late-july). Every day it seemed like more and more road projects were getting put on the back burner, which was causing unsafe transportation conditions.
Sen. Barbara Boxer (D-Calif.), chairman of the Senate Environment and Public Works (EPW) Committee, was aware of the problem (betterroads.com/boxer-on-highway-trust-fund-we-are-running-out-of-time-for-action).
“Make no mistake – we are running out of time for action,” Boxer said. “Already states are cutting back on the construction projects they planned to go forward with this spring, and this trend will only continue to get worse as we get closer to insolvency,”
As part of President Obama’s four-year, $302 billion transportation reauthorization proposal (betterroads.com/obama-to-present-congress-with-proposed-transportation-reauthorization-bill), Foxx sent a long-term transportation bill to Congress. The bill was notably dubbed the GROW AMERICA Act (dot.gov/grow-america),
The DOT noted that the bill includes the following proposals:
Address the shortfall in the Highway Trust Fund and providing an additional $87 billion to address the nation’s backlog of deficient bridges and aging transit systems;
Create millions of new jobs to ensure America’s future competitiveness;
Increase safety across all modes of surface transportation, including increasing the civil penalties the National Highway Traffic Safety Administration (NHTSA) can levy against automakers who fail to act quickly on vehicle recalls;
Provide certainty to state and local governments that must engage in long-term planning;
Reduce project approval and permitting timelines while delivering better outcomes for communities and the environment;
Bolster efficient and reliable freight networks to support trade and economic growth; and
Create incentives to better align planning and investment decisions to co
“Failing to act before the Highway Trust Fund runs out is unacceptable – and unaffordable,” Foxx said in a written statement. “This proposal offers the kind of job creation and certainty that the American people want and deserve.”
The bill would never pass Congress.
Senate Environment and Public Works Committee unanimously approved a six-year surface transportation reauthorization bill. Dubbed the MAP-21 Reauthorization Act (betterroads.com/senate-epw-releases-map-21-reauthorization-act), the six-year bill planned to reauthorize surface transportation projects through fiscal year 2020 and was indexed for inflation.
Under the bill’s provisions, the core highway program would get a nearly $4 billion boost, from $38.44 billion in 2015 to $42.59 billion in 2020.
There were not enough supporters of the bill to ever pass Congress. Some people, like Transportation Secretary Anthony Foxx, didn’t think the bill was large enough.
“I just spent the better part of a week going to eight states, 12 cities large and small,” Foxx said, referring to his April bus tour. “And I have to tell you that America has been waiting on a bigger solution.”
With the current Highway Trust Fund quickly running dry, people started to scramble for a solution. One idea was to (betterroads.com/lawmaker-looks-to-crude-oil-tax-indexed-diesel-tax-for-highway-trust-fund-solution-plan-would-remove-gas-tax) repeal the federal gas tax in favor of other funding options like taxing oil barrels and indexing the diesel tax to inflation and fleet fuel economy.
Another plan was to cut some services offered by the U.S. Postal Service and use the savings over 10 years to make up for the fuel tax shortfall.
Both proposals were dismissed.
“We’ve got to get past the gimmicks in transportation and really get serious about trying to get a long-term strategy done,” Foxx said.
With hopes of a long-term deal, the Senate decided to delay voting on a proposed $9 billion patch (betterroads.com/wyden-offers-short-term-patch-for-transportation-funding) that would have provided funding through December. The month of June saw other proposals as well, most of which caused for a gas tax increase. None of them were seriously considered.
July marks the month when Congress finally started to seriously look for a solution. After all, several states were found to be in dire need of highway funding (betterroads.com/10-states-in-dire-need-of-highway-trust-fund). With no long-term deal in sight, the House and the Senate focused on finding a short-term solution.
In mid-July, the House passed a $10.8 billion plan (betterroads.com/house-approves-11-billion-trust-fund-patch) to pay for the federal government’s share of road and bridge repairs through May. On July 30th the Senate would reject the House’s bill and respond with of its own. The Senate reduced the bill from $10.8 billion to $8.1 billion and sent it back to the House.
With Congress’ summer recess beginning on August 1st it was important for an agreement to be in place as soon as possible.
The next day, on July 31st, the House voted down the Senate’s revised bill and sent back its original $10.8 billion bill (betterroads.com/house-votes-down-senates-highway-bill-sets-up-must-act-situation-for-senate).
Just hours after the House turned down the Senate’s $8.1 billion bill, Congress passed the $10.8 billion bill and sent it to be signed by President Barack Obama. The bill should allow continued funding for road, highway and bridge construction through May 2015.