Update on Highway Trust Fund
Shortfall
With the latest short-term extension of programmatic authority for the
Federal Aviation Administration (FAA) slated to expire at the end of this
month, the Senate is currently negotiating the details of another
extension. For their part, Senate Democrats have floated a proposal
that would continue FAA programs/taxing authority through September;
Republicans, however, generally favor a longer-term extension (through next
year).
It should be noted that included in the Senate
Democrats’ latest FAA proposal is a plan that would transfer funds from
the general Treasury to the Highway Trust Fund (HTF). As you know, the
HTF is facing a projected $3.3 billion shortfall in fiscal year 2009, which
would translate into a program cut of $13.5 billion in federal-aid highway
funding.
Although key senators had initially proposed transferring $5
billion to the HTF, there is now concern that that amount of funding would be
insufficient in covering the growing shortfall due to declines in nationwide
travel (fueled by higher gas prices). Accordingly, Senate Democrats are
now proposing an $8 billion general fund transfer.
According to the American Association of State Highway and
Transportation Officials, roughly 380,000 jobs are at risk due to the impending
hole in the HTF. All told, states are facing a 34 percent cut in highway
funding, with
Although there is bipartisan support for shoring up the HTF,
ongoing disagreements over how to fund the shortfall have complicated
matters. For example, earlier this year members of the Senate were unable
to agree on how to offset the HTF restoration; as a result, another short-term
FAA extension was approved instead of the four-year reauthorization
package. As for the latest proposal by Senate Democrats, the $8 billion
HTF restoration would not be offset. Accordingly, Senate
Republicans are expected to object to this proposal as well.
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Joe Krahn
Waterman & Associates
900
(p) 202.898.1444
(f) 202.898-0188
jk@wafed.com
(posted
6/17/08)