Highway Trust Fund Faces New Hole, Lawmakers Say

The Highway Trust Fund, which had to be rescued last September, is facing another big shortfall this summer and will need a new infusion of $5 billion to $7 billion by August to avoid a slowdown in spending, key senators say.

Photo: Senate Environment and Public Works Committee Majority Staff

Senate committee leaders Boxer (above) and Inhofe (below) raise warnings about looming problems in highway fund.

Photo: Senate Environment and Public Works Committee Majority Staff

Obama administration and U.S. Dept. of Transportation officials have said that the trust fund will not have enough cash to cover commitments to states for highway projects, according to Senate Environment and Public Works Committee Chairman Barbara Boxer (D-Calif.) and the panel's top Republican, James Inhofe of Oklahoma.

According to administration and DOT officials, $5 billion to $7 billion will be needed by August to avert having to slow down Federal Highway Administration reimbursements to state DOTs, Boxer and Inhofe said on June 2. The lawmakers added that a further $8 billion to to $10 billion will be needed in fiscal year 2010 to maintain the highway program at its current level. Congress has set the 2009 federal highway program obligation limit at $40.7 billion.

Boxer and Inhofe discussed the trust fund's problem at a June 2 committee hearing on the nomination of former Arizona DOT Director Victor Mendez to be the new head of the Federal Highway Administration.

Inhofe raised the possibility of tapping the interest on the Highway Trust Fund balance as one solution. That interest goes to the general Treasury, not the trust fund.

Jack Basso, American Association of State Highway and Transportation Officials' director for program, finance and management, says his rough estimate is that the interest on the fund's balance has been accumulating at $750 million per year for the last 10 years. That would be more than enough to plug the projected $7-billion hole for 2009. But it wouldn't fix the 2010 shortfall.

According to AASHTO, the administration officials briefed Democratic congressional staffers about two weeks ago on the state of the trust fund.

Mendez had bipartisan support and generally smooth sailing through his confirmation hearing. Sen. Christopher Bond (R-Mo.), a senior committee member, referred to "the hallelujah and amen chorus" that his colleagues on the panel were voicing on Mendez's behalf.

Tom Ichniowski has been writing about the federal government as ENR’s Washington Bureau Chief since the George H.W. Bush administration, and he has covered at least five major highway bills. A recognized expert on government policy on infrastructure and regulation, Tom is also a Baltimore native and Orioles fan who grew up rooting for Brooks and Frank Robinson. He is a graduate of Columbia College and Columbia’s graduate school of journalism, where he once used “unrelentless” in a headline.

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