Congress Passes Bill to Fund the Highway Trust Fund and Reauthorize Transportation Programs Just Before Deadline

Congress Passes Bill to Fund the Highway Trust Fund and Reauthorize Transportation Programs Just Before Deadline

Facing a deadline of August 1st before the Department of Transportation would have to begin to curtail payments from the Highway Trust Fund (HTF) to transportation programs because its funding was exhausted, Congress finally passed a short-term funding bill for the HTF and the reauthorization of transportation programs the night before the deadline on July 31st. Congress went right up to the deadline as both the Senate and House jockeyed to have their version of the HTF funding and Transportation reauthorization be passed. After some back and forth, the Senate ultimately acquiesced to the House version and passed the bill (HR 5021) by a vote of 81-13. The bill will extend the HTF and current transportation programs without any policy changes (including the Tribal Transportation Program) through the end of May 2015.

Over the last several months, both the House and Senate were unable to develop a long-term HTF funding and reauthorization bill, and instead settled on competing versions to extend the HTF and existing programs. The Senate version only extended the HTF and transportation programs through December 19th of this year in the hope that during the lame-duck session of this Congress a long-term bill could be agreed to. However, the House insisted that transportation programs be extended into the new Congress and ultimately won.

The most significant long-term issue remains how to pay for transportation programs. Currently, the HTF is funded through an 18.4 cents-per-gallon federal gas tax. However, revenues from this tax have not been able to cover expenditures from the HTF for several years. Congress has had to use funds from general revenue to cover transportation spending for the last 2 years, but now this funding has been exhausted. So far, Congress has been unwilling to simply raise the gas tax, which hasn’t changed since 1993. Alternatively, with an aging highway infrastructure, simply cutting spending on transportation projects is not seen as a viable option either. In the short-term, HR 5021 will cover this HTF shortfall between revenue and spending by adjusting pension rules, extending certain customs fees, and using funds from the Leaking Underground Storage Trust Fund. However, these are not long-term alternatives and the next Congress will have to address this problem again early next year.