The Highway Trust Fund will run out of money in August
By Roger Caldwell
As the President’s hair turns a spotty grey, the financial problems in the federal government never stop. With a dysfunctional national legislature that remains gridlocked, “The Highway Trust Fund” is running out of money. This year there are estimated 112,000 highway projects and 5,600 transit projects, presently under way.
An empty trust fund could stall all these projects, and 700,000 jobs would be affected. August is the peak of the summer construction season, and stopping these jobs would devastate the economy. It would be necessary for Congress to find $18 billion in spare change in Washington D.C. as a temporary funding source to help keep the fund solvent.
The United States Highway Trust Fund is a transportation fund which receives money from a federal fuel tax of 18.3 cents per gallon on gasoline, and 24.4 cents per gallon on diesel fuel. This rate was established by President Clinton in 1993, and has never been increased since that date. The rate has been discussed many times for an increase, but the new rate has never been approved by both the houses and signed by the President.
In the last 6 years, Congress has been forced almost every year to authorize a transfer of funds from the General Fund to keep the highway fund solvent. Basically, the Congress must rob Peter to pay Paul, and this appears to be the standard operating procedure for the government.
The infrastructure system in America is in deplorable condition, and when you travel around the country, it appears that the projects are corrupt and filled with fraud. President Obama has offered a four-year, $302 billion transport spending plan, but will that be enough funding across the country. It appears the more money that contractor and states get the more money they need.
President Obama and his Transportation Secretary Anthony Foxx, a black man is going around the country to drum up support for funding, and light a fire under Congress. When the president first got into office, he talked about “shovel ready jobs” and cutting the red tape on infrastructure projects. But, with The Highway Fund getting ready to run out of money someone dropped the ball.
The U.S. needs more infrastructure projects to meet the needs of a growing country. In the last week and a half, the president and his administration plan to accelerate, and push approvals for infrastructure projects across the country. Many of the leaders in Congress and across the country agree with the concept, but everyone is wondering where the money will come from.
As President Obama and Congress get ready for another fight, there is no mechanism to increase revenues to cover a chronic shortfall in U.S. fuel tax revenues. Construction and fuel cost continue to rise, and the U.S. Chamber of Commerce is calling for the fuel tax to be increased. It will be up to the tax-writing committees in the House and Senate to make that decision, but the Republicans are always against increasing taxes.
As the roads and bridges continue to deteriorate across the country, there must be action, and major funding. Everyone in the country must get ready for an increase in the gas tax, which will increase the cost of gasoline and diesel fuel. Americans love their cars, so they will travel more miles in the future, and they must be ready to pay for this convenience.