USDOT Secy LaHood Says Highway Trust Fund May Be Insolvent By Mid-August; Vows to Avert Bankruptcy and Pay For It
(Source: Streetsblog & Wall Street Journal)
The Obama administration is working on a plan to fill the shortfall in the nation’s highway trust fund by August without adding to the federal deficit, Transportation Secretary Ray LaHood told Congress yesterday.
The highway trust fund, which relies mostly on gas-tax revenue, will need up to $7 billion in additional money by the end of summer to ensure states continue receiving payments, LaHood told the transportation subcommittee of the House Appropriations Committee. The fund also will need up to $10 billion in the 12 months after September to ensure its solvency, LaHood said.
“We believe very strongly that any trust fund fix must be paid for,” LaHood told members of the House Appropriations Committee’s transportation panel. “We also believe that any trust fund fix must be tied to reform of the current highway program to make it more performance-based and accountable, such as improving safety or improving the livability of our communities – two priorities for me.”
The administration’s quest to offset its trust fund fix, which will cost as much as $7 billion, could prove fruitless. Rep. John Olver (D-MA), chairman of the panel that greeted LaHood today, put it simply when asked if the necessary spending cuts could be found. “That’d be very tough,” he said, noting that his own annual transportation spending is unlikely to become law before the highway trust fund runs out of cash. Replenishing the trust fund with a cost offset, as LaHood suggests, requires a serious conversation about finding new long-term revenue sources for not just highways but all modes of transportation.
But he said the President Barack Obama administration has ruled out raising the gas tax to provide additional funding, saying an economic recession isn’t the time to make such a move. ”We are not going to raise the gasoline tax. I’ll just say that emphatically,” LaHood said.
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[...] the fact the Highway Trust Fund, the piggy bank that your gasoline taxes get fed into, is about to go bust. So the administration–which has shown very good leadership on transportation issues for the [...]