Senators set ‘principles’ to prevent highway fund bankruptcy

Senators on Thursday said they have agreed to “principles” that willl guide work on a new transportation funding bill as they race to take action before the highway trust fund runs dry.

The announcement fell short of a specific funding proposal that transportation advocates were hoping for, as a Sept. 30 deadline for reauthorizing the legislation looms.

Still, the lawmakers hailed the agreement as a crucial first step.

{mosads}“The bipartisan principles we’ve agreed to will provide the foundation we need to do our part to deliver on that promise,” Sen. Tom Carper (D-Del.) said. “It will build on the comprehensive reforms of MAP-21, which promised higher performance and more accountability.”

Carper is the chairman of the Senate’s Environment and Public Works subcommittee on Transportation and Infrastructure. He was joined in the announcement on Thursday by committee Chairwoman Barbara Boxer (D-Calif.) and the top ranking Republicans on the panel, Sens. David Vitter (R-La.) and John Barrasso (R-Wyo.)

Carper said the agreement was “encouraging,” even though no specific funding sources were unveiled on Thursday.

“Every state, city, and town in the country has a stake in this bill, which provides for more than a forty percent of all highway capital investments and a quarter of public transit funding in America,” Carper said. “We haven’t been able to give our governors, mayors, and other officials the certainty of long term funding since SAFETEA-LU expired in 2009.” 

Lawmakers are grappling with a shortfall in transportation funding that is projected to reach as high as $20 billion next year. The Congressional Budget Office (CBO) has said the Department of Transportation’s Highway Trust Fund will run out of money as early as August without congressional action. 

The Highway Trust Fund’s coffers have traditionally been filled with revenue collected by the 18.4 cents-per-gallon federal gas tax. However, the gas tax has not been increased since 1993, and receipts from the fuel levy have been outpacing infrastructure expenses by about $20 billion per year.

The current transportation funding legislation, which includes the authorization to collect the gas tax, contained more than $50 billion in annual infrastructure spending. The gas tax, which is not indexed to inflation, brings in about $34 billion per year in its current form.

Lawmakers in the House and Senate have said they want to close the transportation funding gap with enough revenue to approve a five or six-year infrastructure bill this year.

The CBO has projected it would take $100 billion on top of the money that is expected to be brought in by the gas tax to provide enough money to pay for a long-term transportation bill.

Neither chamber has said yet where they anticipate getting the money from, but President Obama and House Ways and Means Committee Chairman Dave Camp (R-Mich.) have each proposed using savings that are anticipated from corporate tax reform to pay for the infrastructure spending.

Boxer said Thursday that the agreed to principles “include passing a long-term bill, as opposed to a short-term patch; maintaining the formulas for existing core programs; promoting fiscal responsibility by keeping current levels of funding, plus inflation; focusing on policies that expand opportunities for rural areas; continuing our efforts to leverage local resources to accelerate the construction of transportation projects, create jobs, and spur economic growth; and requiring better information sharing regarding federal grants.”

— This story was updated with new information at 12:44 p.m.