No Resolution to Highway Trust Fund Shortfall as Deadline Looms

Congress must take action by the end of the week to avert a slowdown in reimbursements to states for on-going highway construction projects. The FHWA has announced a slowdown will happen as soon as the second week of August if additional revenue is not transferred into the Highway Trust Fund. The Administration has projected that the trust fund needs an infusion of $5-7 billion to pay bills through the end of the fiscal year (September 30, 2009) and an additional $10 billion to keep highway and transit funding in FY 2010 at its current level. In addition, spending authorization expires on September 30 and Congress must act on this as well. The Administration proposes an eighteen month extension of spending authority along with a general fund transfer of $20 billion to ensure that the necessary revenue is provided. The House will adjourn for its summer recess on Friday and no legislative proposal has yet been introduced to provide the short term fix. House Transportation and Infrastructure Committee Chairman Jim Oberstar (D-Minn.) suggested at a hearing last week before a House Ways and Means Subcommittee that only $3 billion be transferred to the trust fund now and that Congress continue to work on a six-year reauthorization bill that solves the short- and long-term funding issues. He believes an 18-month extension will undermine those efforts. The Ways and Means Committee is responsible for finding the revenue to fix the funding shortfall.  In the Senate, legislation has begun to move to address the FY 2009 funding problem and a continuation of the program into fiscal year 2010. The Senate Banking and Commerce Committees have joined the Environment and Public Works Committee in approving legislation to extend highway and transit program spending authorization through March 2011. Still to act is the Finance Committee, which must provide the revenue needed to keep the Highway Trust Fund solvent for the next eighteen months. Finance Committee Chairman Max Baucus (D-Mont.) has introduced legislation that would transfer nearly $27 billion from the general fund to the Highway Trust Fund. That legislation, once approved by the committee, will be consolidated with the 18-month authorization provisions and considered by the Senate sometime before its summer recess, which is expected to begin on August 7.