Senate Finance Committee Chairman Max Baucus (D-Mont.) has introduced a bill that would repair the looming revenue hole in the Highway Trust Fund. Baucus's bill, introduced July 20, would provide a total of $26.8 billion in new revenue for the trust fund, with $22 billion designed for the fund's highway account and $4.8 billion for its transit account.
Transportation Secretary Ray LaHood has said that the highway account will require a $20- billion infusion over the next 18 months, or DOT would have to slow down its reimbursements to states for highway-construction obligations they incur.
Time is pressing: LaHood has said the shortfall in the highway account will start to appear as early as August.
Baucus is drawing on two revenue sources for his proposed trust fund "fix." He would reimburse the trust fund for $19.5 billion in interest foregone since 1998, when the Surface Transportation Revenue Act directed that the interest revenue be steered to the general fund. Of that $19.5 billion, $14.7 billion would be deposited into the trust fund's highway account and $4.8 billion into its transit account.
The second part of Baucus's plan is to add $7.3 billion to the fund's highway account for funds disbursed between 1989 and 2004 for emergency highway and bridge repairs after storms and other natural disasters.
Baucus said, "We are faced with the difficult question of how to beat the clock and restore the solvency of the Highway Trust Fund to avoid stalled infrastructure projects, job losses and an unsafe highway system. This proposal represents a clear way to address the projected shortfalls we face."
If the finance panel approves the Baucus measure, it would be merged with a bill that the Environment and Public Works Committee approved on July 15, an 18-month extension for the federal highway program. The extension would begin on Sept. 30, when the current multi-year authorization, the Safe, Affordable, Efficient Transportation Equity Act: a Legacy for Users (SAFETEA-LU) expires.
But House Transportation and Infrastructure Committee Chairman James Oberstar (D-Minn.) opposes an extension. Instead he is pushing a six-year, $500 billion reauthorization bill, which cleared a House subcommittee on June 24.
