Trust Fund Hearing – CBO Estimates 100 Percent Cut in 2015

The House Transportation and Infrastructure Subcommittee on Highways and Transit held a hearing July 23 on the fiscal condition of the Highway Trust Fund.  The subcommittee heard testimony from Polly Trottenberg, Under Secretary for Policy at the U.S. Department of Transportation and Kim Cawley with the Congressional Budget Office (CBO).  CBO’s testimony provided a dire warning about the current status of the Highway Trust Fund saying that without additional revenue following September 30, 2014 the federal highway and transit programs dependent will be unable to allow any new funding obligations.  While Ms. Trottenberg offered no new solutions to the trust fund problems, she instead repeated President Obama’s idea to take part of the “Peace Dividend” resulting from the drawdown from the wars in Iraq and Afghanistan and use it for transportation. This idea has little support in Congress.  Members of the subcommittee were told by CBO that unless Congress addresses the fact that the Highway Trust Fund is going broke, sometime soon after the expiration of MAP-21 in September 2014, the HTF will not have enough money to meet all of its obligations.  CBO went on to testify that the fund will need an additional $15 billion in FY 2015 with that number growing in subsequent years.  CBO stated that Congress could address the projected annual shortfalls by substantially reducing spending for surface transportation programs, by boosting revenues, or by adopting some combination of the two approaches. Bringing the trust fund into balance in 2015 would require a 100 percent elimination of the nearly $51 billion authorized in FY 2015, raising the taxes on motor fuels by about 10 cents per gallon, or undertaking some combination of those approaches.   While not completely disagreeing with CBO, USDOT offered no solutions to the problem rather an acknowledging the situation. The solvency of the Highway Trust Fund remains a top priority for AGC. We are currently in the process of educating Representatives and Senators about the pending HTF crisis and the need to act sooner rather than later.  As the House and Senate craft a comprehensive tax reform package, AGC is encouraging that the Highway Trust Fund revenue gap be addressed in any final package.  For more information and to contact your elected official visit AGC’s Legislative Action Center