The Highway Trust Fund is running on fumes and that won’t change unless there’s Congressional action.
The dwindling fund, which is seen by some as vital to the nation’s transportation network, is projected to soon exceed its dedicated revenues and become insolvent.
Previously, there’s always been agreement in Washington, D.C. when it comes to financing the fund. But now, that consensus is crumbling as the fund is increasingly seen as “pork spending” and just another example of the federal government’s gluttony. Thankfully, there has been some movement on finding a solution. Last week, the U.S. House Ways and Means Committee passed a measure that might be a fix.
The fund should not be given a blank check to stay sustainable, and a number of solutions have previously been proposed to find cuts elsewhere to allow the highway fund to continue at its current pace.
While the issue hasn’t gained much attention in recent weeks, this is a problem that should be of concern for anyone who wants a pothole fixed or drives over a bridge and expects it not to collapse.
Some Congressional members have proposed eliminating some Saturday deliveries by the U.S. Postal Service to make up the gap. Others have mentioned tightening up overseas taxes to fill the difference. However, it’s hard to believe the momentum will be there to move either of those ideas forward.
Of course, the Congressional solution that has the greatest likelihood of passing is a short-term solution, and while those are never the best answer, the states certainly expect to complete their projects in a set time line using the funding provided by the federal government.
The trust fund is currently funded by the federal gas tax, and it goes toward repairing roads, building new roads, fixing pot holes and other similar infrastructure projects. Federal budget experts have warned the financial “cliff” for the program’s insolvency is in mid-August.
If Congress can’t find a solution, it’s hard to believe construction across the country will grind to a halt. But U.S. Transportation Secretary Anthony Foxx has cautioned that if Congress remains inactive on the issue, the federal government will have to start cutting back on funds to states for projects.
That means construction projects in South Carolina may slow down or be cut back if Congress can’t reach an agreement.
This week, the U.S. House is expected to vote on a bill that would provide funding until May using a rather complicated combination of budgetary moves known as “pension smoothing” and tapping another trust fund geared toward leaking, underground storage tanks. Is this the best solution? No. Could the fund, which disbursed $50 billion to states in 2013, be reformed? Likely so. But having our roads and bridges in good condition is also imperative.
Budget transfers seem to be the short-term solution. That’s OK for now, but a more straightforward solution – one that more effectively prioritizes funding and makes the fund solvent – should be a must for Congress moving forward.