Highway fund running on fumes

Lawmakers are under pressure to refill the Highway Trust Fund when they return to Washington after the Fourth of July weekend or risk losing thousands of construction jobs that could set back recent job growth.

The Department of Transportation has warned that allowing the Highway Trust Fund to go broke would cost the U.S. about 700,000 jobs - more than twice the 288,000 that were created last month, according to a jobs report celebrated by the administration.

The agency has said that it will have to begin cutting back payments to state and local governments next month adding to the uncertainty unless Congress prevents the fund that pays for road and transit projects from running out of money, which is predicted to occur at the end of August.

Those cuts could leave drivers facing congested or damaged roads, sparking anger ahead of November's midterm elections.

Transportation advocates are calling for quick action to break the stalemate and avoid jeopardizing employment growth.

The job market is steadily improving but the threat that Congress will let the Highway Trust Fund go bankrupt looms large,” BlueGreen Alliance Executive Director Kim Glas said in a statement on Thursday.

“Despite months of debate, lawmakers have failed to act,” Glas continued. “They’re putting thousands of jobs on the line.”

President Obama also warned that recent job gains could easily be lost if Congress lets the highway fund go bankrupt.

“My hope is, is the American people look at today’s news and understand that, in fact, we are making strides,” Obama said Thursday. “We have not seen more consistent job growth since the ‘90s.

“We’re not going to be able to fund the Highway Trust Fund and to ramp up our investment in infrastructure without acts of Congress,” the president said, urging lawmakers to act quickly.

The traditional source of money for the highway trust fund is the 18.4 cents-per-gallon federal gas tax, but a $16 billion-per-year hole has developed as cars have become more energy efficient in recent years.

The current transportation bill includes approximately $50 billion in infrastructure spending, but the gas tax only brings in about $34 billion per year.

Transportation advocates have pushed Congress to consider increasing the gas tax for the first time since 1993 to close the funding gap, but lawmakers have resisted raising the price of gas for drivers in the middle of an election year.

Glas said lawmakers must make some difficult choices to avoid a transportation funding shutdown in the middle of the traditionally busy summer construction season.

“It’s time we let construction workers, manufacturers and small businesses get to the work of revitalizing America’s infrastructure systems - especially during the height of construction season - without Congress mucking it up,” she said.

“Congress must authorize a fully funded, long-term plan - like the [president’s] GROW AMERICA Act proposed by the administration and Department of Transportation - to fix the problems caused by decades of deferred maintenance and to repair and modernize our infrastructure to support a prosperous 21st century economy,” Glas continued.

The Obama administration wants lawmakers to approve a four-year, $302 billion transportation bill to prevent future standoffs over infrastructure funding.

Democratic senators are also pushing the GOP-led House to act.

"The clock is winding down for Congress to avoid lurching toward another unnecessary crisis - this time with a construction shutdown,” said Sen. Patty Murray (D-Wash.). “States and businesses need certainty to create jobs and grow local economies ... failing to solve the shortfall would mean the exact opposite.”

A Senate panel in May approved a $265 billion highway bill, but senators still haven't found a way to pay for it beyond the gas tax revenue.

Despite the pressure, House leaders have stayed silent on transportation funding.

House lawmakers are focused on passing a short-term patch in the neighborhood of $9 billion to carry the Highway Trust Fund through the end of the year.

Transportation Secretary Anthony Foxx said this week that lawmakers should turn to a longer-term fix, though he acknowledged a temporary patch would be better than nothing.

"As a country, we've got to stop playing small ball with transportation because it is so critical," Foxx said at an event Tuesday.

"If we get to Sept. 30, and there hasn't been a funding solution, and there hasn't been a reauthorization extension at a minimum, we will not be able to spend money even if we have it," he added. "That's another part of the crisis."

In the meantime, Foxx told states to get ready to have their reimbursements cut back next if Congress remains gridlocked.

"States will be paid not as they sent their bills in, but every two weeks as money from the gas tax comes in," Foxx said. "This is we believe the most equitable approach.

“But there is to be very clear, no good option when we're talking about a trust fund that is running short in supply of dollars," he added.

Source: The Hill