Transportation Secretary Anthony Foxx warned state governors on Tuesday that highway construction will dry up in August unless Congress extends a temporary measure that allows the Federal Highway Administration to continue approving projects and paying out federal funds. The Transportation Department will try to fully reimburse Alabama’s projects under that scenario, but might not be able to if the fund becomes insolvent. “However, if we approach insolvency, the Department will be forced to limit payments in order to manage the dwindling cash flows in the Highway Trust Fund”.
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The new stopgap would be funded by about $8.1 billion in transfers to the trust fund from the general Treasury.
State and regional transportation planners have said they would like to see a long-term transportation bill authorizing funding for six years.
The traditional source of transportation funding has been revenue from the 18.4 cents per gallon federal gas tax.
The federal government typically spends about $50 billion per year on transportation projects, but the gas tax only brings in about $34 billion annually at its current rate.
The money to pay for the extension would come mostly from a series of changes to promote tax compliance.
Republicans Paul Ryan, chairman of the Ways and Means Committee with jurisdiction over taxes, and Bill Shuster, chairman of the Transportation and Infrastructure Committee, urged support for their newly introduced measure, saying in a joint statement that the “country needs a long-term plan to fix our roads, bridges, and other infrastructure, and this bill gives us our best shot at completing one this year”.
The Obama administration proposed a six-year program totaling $478 billion paid in part by a controversial plan to tax overseas business holdings. “Careening from self-inflicted crisis to self-inflicted crisis undermines our system”.
“We need your help explaining to Congress why a short-term bill that perpetuates chronic underinvestment is unacceptable”, the transportation secretary said.
Foxx said recently he had not decided whether he would recommend to President Barack Obama that he veto short-term extensions. But Congress has been unable to compromise on a long-term solution.
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“Not only does this proposal provide states with extended funding certainty, it also increases Federal surface transportation investment by 45 percent, providing funding growth and smart policy reforms to strengthen the American economy”, Foxx continued.
