Federal Highway Trust Fund gets raided funds returned

You would think the sky is falling by returning funds Congress stole from the Highway Fund by listening to Secretary of Transportation Mary Peters. Below, you can contrast her press release to that of the facts laid out by the American Highway Users Alliance.

Congress raided the highway fund in 1998 to the tune of $8 billion and all the lawmakers are doing is returning that money to the taxpayers for roads as intended. Does this sort of robbery sound familiar? Our state legislature has raided the highway fund to the tune of $10 billion, which is even worse, but they expect us to double or triple our transportation costs with toll taxes in order to bail out their bad decisions. Mary Peters is now “spinning” the move by Congress as an irresponsible bailout for a bankrupt highway fund (in order to push privatized toll roads, of course), calling it a “dangerous precedent.” (See article that follows the press release). What’s dangerous, Ms. Peters, about restoring raided funds? They twist everything to push privatization and tolling.

The Senate passed the bill today.

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Motorists Praise Bush Admin’s “Flip-Flop” On Highway Fund
Senate Urged to Take Immediate Action to Keep America Moving

American Highway Users Alliance
For Immediate Release

WASHINGTON, DC (September 8, 2008) –The American Highway Users Alliance, which represents the interests of millions of American motorists and businesses,  today praised Transportation Secretary Mary Peters’ decision to make a “U-Turn” and support solvency for the federal Highway Trust Fund.  Until late Friday afternoon, the Bush Administration had threatened to veto the needed legislation, H.R. 6532, which passed the House of Representatives by a vote of 387 to 37.

In reversing course, the Secretary has asked Congress to expedite passage of H.R. 6532 and has warned that the Federal Highway Administration will be unable to pay its bills unless the legislation is enacted this week.

“It appears that Secretary Peters and the Bush Administration have finally come to their senses,” said American Highway Users Alliance President Greg Cohen.  “Until last Friday, they had planned to allow the highway fund to go bankrupt, expecting that it would happen after they left office.  For years they have been an obstacle to restoring the $8 billion in highway user fees diverted from the fund.  We’re elated that they have ‘flip-flopped’ and hope that any remaining opposition to this bill in the Senate evaporates with the Administration’s change of heart.”

The American Highway Users Alliance supports HR 6532 because a solvent Highway Trust Fund keeps the motoring public moving, bolsters the economy, combats highway congestion and improves safety on major American roads.

“The Senate has just returned from a month long summer recess.  One of the highest priorities before adjournment should be passing HR 6532,” said Cohen, “and there is no reason why this bill should not garner unanimous support.”

H.R. 6532 enjoys overwhelming support because it solves the problem by restoring $8 billion in user fees taken from the Highway Trust Fund and does not increase the budget deficit. These taxes, paid by motorists at the pump, were quietly transferred out of the fund in 1998 to be used for non-highway purposes.  Now that the money is desperately needed, it is important that Congress restore the funds.  Unless these highway user fees are restored, the Federal Highway Administration will be unable to pay its bills for road, bridge, and safety projects currently underway.

Background

On July 23, 2008, the U.S. House of Representatives passed the H.R.6532 bill by a vote of 387-37.  When the Administration threatened to veto the bill, the Senate did not schedule debate on it because individual Senators threatened to use parliamentary maneuvers to waste valuable time.  Now that the Administration has lifted its veto threat and supports passage, the Senate should be able to pass the bill quickly.

H.R. 6532 serves as the only viable solution to the emergency shortfall facing the Highway Trust Fund.  When Congress passed the last major highway bill in 2005, the Bush Administration and Congress agreed to deplete the fund by September 2009 and reassess the problem later.  However, due to recent decreases in highway travel, the Highway Trust Fund has run short of fuel and truck tax revenue a full year earlier than expected.

The American Highway Users Alliance represents motorists, AAA clubs, truckers, bus companies, motorcyclists, RVers, and a broad cross-section of businesses that depend on safe and efficient highways to transport their families, customers, employees, and products.  Highway Users members pay the taxes that finance the federal highway program and advocate public policies that dedicate those taxes that to improve highway safety and mobility.

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DOT 128-08
Contact:  Brian Turmail, Tel.:  (202) 366-4570
Friday, September 5, 2008 

U.S. Transportation Mary Peters Announces Steps to Delay Highway Trust Fund Shortfall, Calls on Congress to Pass Legislation to Address Problem

Trust Fund Fix Needed Because Congress Ignored Three Years’ Worth of Warnings 

            U.S. Secretary of Transportation Mary E. Peters today directed the Federal Highway Administration to take immediate steps to protect the solvency of the highway account of the Highway Trust Fund and called on Congress to act quickly to finally address this long-predicted problem. 

            “Time and again, the President has warned Congress of the pending shortfall and submitted fiscally prudent budgets to close the gap,” said Secretary Peters.  “Americans cannot afford to have Congress play ‘kick the can’ with highway funding for another year, another month, or frankly, another week.” 

She called on Congress to provide immediate short-term relief by passing pending legislation, already approved by the House of Representatives, that would make an additional $8 billion available for the highway trust fund.  She urged Congress, however, to avoid adding pet projects, new earmarks or unrelated provisions on the “must pass” legislation and to get the bill done by the end of next week.           

The Secretary said the legislation was needed now because Congress had failed to heed over three years of warnings from the President and the Department about the long-predicted highway trust fund shortfall.  She added that the recent and sudden decline in American driving and the resulting decline in gas tax revenue during the summer had accelerated the predicted shortfall.   

The Secretary said that, in order to allow for continued highway payments to states while Congress acts, the federal government would begin making reimbursements to states on a weekly basis starting next week.  In addition, she said the agency would make funds available on a pro-rated basis.  For example, if there are only enough funds to cover 80 percent of requests, the highway agency will pay only 80 percent of each. 

            Secretary Peters added that states would receive the balance of the funds in the following week, and then any new requests would also be dealt with on a pro-rated basis.  She added that the Department will also review its personnel and purchasing policies and consult with other federal agencies receiving highway funds to find ways to free up additional funding for reimbursing state partners.

As recently as July, the Administration opposed the House Trust Fund legislation, in part because the $8 billion would come from the government’s general fund.  However, the recent decline in federal gas tax revenue requires immediate action on legislation that has already passed the House to ensure states are not adversely affected.   

Secretary Peters noted that today’s problem would have been avoided had Congress acted on the President’s fiscally responsible proposal from last February to transfer funds from the highway trust fund’s mass transit account, which has a surplus.  That measure would not have affected current transit investments at all, the Secretary added.   

“Taking money from other pressing national priorities to plug a hole caused by poor fiscal discipline sets a dangerous and disturbing precedent,” the Secretary said.  She added, though, that “states are working hard to keep the nation’s bridges and roads in good repair and deserve better than IOUs from Congress.” 

The Secretary said it was time to fundamentally reform the nation’s scattered approach to transportation.  She said Congress should do away with billions in annual earmarks and consolidate the over 100 special niche programs that require states to slice and dice federal transportation funds to do things like build museums and restore lighthouses.  She noted that the Administration issued a comprehensive transportation reform proposal along those lines several weeks ago.  

To avoid future shortfalls, the Secretary said it was time to embrace new funding mechanisms that respond to today’s transportation challenges and are in keeping with national energy policies.  “The current approach may have made sense 50 years ago, but it is ineffective and unsustainable when we are trying to reduce congestion and encouraging Americans to embrace more fuel-efficient cars,” she noted.

Link to complete release here.

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