Oberstar Proposes $3-Billion Highway Trust Fund Remedy

House Transportation and Infrastructure Committee Chairman James Oberstar (D-Minn.) has recommended a $3-billion infusion for the struggling Highway Trust Fund, a sum that Oberstar says will be enough to carry the trust fund through Sept. 30. Oberstar, who made his proposal July 23 during a House Ways and Means subcommittee hearing, said that the boost for the trust fund should come through a transfer from the general fund.

The trust fund's highway account is projected to start running a shortfall in August. Oberstar's proposal for fixing that immediate problem is at odds with the plan now shaping up in the Senate. Those differences over the shape of a trust-fund "fix" are intertwined with varying views about how to reauthorize the overall federal highway and transit programs before the end of September.

Oberstar has been vociferously advocating a six-year, $500-billion highway-transit-rail reauthorization bill. His repair for the trust fund would only run until Sept. 30, because that is the date on which the current multiyear transportation statute--the 2005 Safe, Accountable, Flexible, Efficient Transportation Equity Act: a Legacy for Users (SAFETEA-LU)--is due to expire. Oberstar is pushing to get that big, six-year bill passed in September.

Meanwhile, the Senate is taking a different path. It is pursuing an 18-month reauthorization that, most observers presume, would be coupled with an 18-month infusion for the trust fund. Senate Finance Committee Chairman Max Baucus (D-Mont.) on July 20 proposed a $26.8-billion shift to the trust fund from the general fund which he says will keep the fund fully solvent for 18 months, ending March 31, 2010.

Three other Senate committees recently have approved pieces of what would be an 18-month package. Environment and Public Works cleared an 18-month reauthorization for the highway program on July 15. That would be merged with a a highway-safety extension that the commerce committee passed on July 21 and a public-transit provision that the banking committee cleared on July 23.

A senior U.S. Dept. of Transportation official is worried that Oberstar's proposed $3 billion may not be enough to keep the trust fund's highway account healthy enough through September. Roy Kienitz, DOT's undersecretary for policy, told reporters that a $3-billion plan "makes me very nervous." DOT has estimated that the trust fund would need $5 billion to $7 billion to get through September. It favors an 18-month SAFETEA-LU extension coupled with a $20-billion boost to the trust fund over that period.

"It's all a question of probabilities," says Kienitz. "At $3 billion, I just figure the probability that we get into a shortfall in mid- to late September is just too high. It's not a risk worth taking."

If new revenue isn't added to the trust fund's highway account, DOT would have to slow down its reimbursements to states for highway construction funding commitments they make.

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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