Federal Gas Tax

Propping up the Highway Trust Fund

Congress has less than three legislative work weeks until the Highway Trust Fund runs dry and highway and bridge projects across the country grind to a halt, resulting in the loss of thousands of construction jobs, further slowing economic recovery. By law, the Trust Fund cannot shell out more money than it has.

The Highway Trust Fund sends approximately $35 billion annually to states for new construction and road repair. According to the Department of Transportation, the fund began FY 2014 with roughly $1.6 billion in cash. In October 2013, $9.7 billion was transferred from the General Fund to the Highway Account. The latest projection from the Department of Transportation monthly "ticker" showed $8.1 billion available as of June 1, but depleting rapidly by late August.

With the clock ticking and no bipartisan consensus on a long-term solution, members in the House and Senate are scrambling for a short-term fix. Filling that gap to December will require something in the $8-$10 billion range. Senate Finance Committee Chairman Ron Wyden is leading the charge, contained in what he calls the Preserving America's Transit and Highways Act of 2014 (PATH).

Political Brakes Halt Transportation Progress

The Chinese are investing in high speed rail, while Congress dithers on how to maintain American roads and bridges.Don't expect any action in Congress this year on a major transportation bill. A sharply divided Congress is unlikely to approve a gas tax increase or any alternative, which leaves the legislation bogged down just like a motorist on a congested freeway.

Few argue there about the need to upgrade America's infrastructure, which the American Society for Civil Engineers grades out at a "D." Highway safety experts blame deteriorating or unimproved roads and bridges for half of the nation's car crashes.

Where the rubber doesn't meet the political road is how to pay for improvements.

Raising the federal gas tax is unpopular at a time when motorists are already squawking about the high price of gas at the pump. The Senate Finance Committee is rolling around some alternatives such as a fee on vehicle miles travelled, expansion of public-private partnerships and creation of a national infrastructure bank.