Acting to avert a highway financial crisis, Congress has approved an $8-billion infusion for the ailing Highway Trust Fund, which should allow the Federal Highway Administration to fully reimburse states' for road-financing expenses for about the next 12 months.
Following Senate action earlier in the week, the House approved the "fix" by a strong 376-29 vote on Sept. 11. The bill now goes to the White House, where President Bush is expected to sign it. That action would represent a major switch for the White House, which in July had issued a veto warning over a nearly identical measure.
As recently as late July, federal officials had estimated that the trust fund's highway account would have a $4.3-billion surplus on Sept. 30. But Dept. of Transportation officials said Sept. 5 that the highway account had grown much weaker in recent weeks. They said new revenue estimates that were lower than earlier projections combined with higher-than-expected requests for reimbursements from state DOTs to squeeze the account.
The reduced revenue forecasts stem from a falloff in vehicle miles traveled on the nationls highways and a resulting decline in motor-fuels tax revenue that supports the trust fund.
With the new numbers, US DOT said the highway account's surplus would disappear as early as Sept. 30. That led US DOT Secretary Mary Peters to reverse an earlier Bush administration stance and urge Congress to approve an $8-billion transfer from the general fund to the trust fund. She also directed FHWA to restrict reimbursements to states for the "invoices" they submit to the agency.
The legislative vehicle was a bill the House had approved in July that authorized the $8-billion shift. But following Peters' recommendation, the bill was amended to make the additional money available on the bill's enactment. The measure passed in July would have released the funds on Oct. 1.
House approval of the revised rescue plan was widely expected. The tougher hurdle was in the Senate. That chamber did approve the $8-billion fix on Sept. 10, but passage there would have come sooner if Sens. Judd Gregg (R-Vt.) and Jim DeMint (R-S.C.) hadn't objected.
The congressional approval of the $8-billion remedy for the trust fund is a relief for state DOTs and construction firms that carry out highway and bridge work financed by the trust fund. But Peters and other observers warn that the fix is only a short-term one and called for steps to revamp the highway-funding system in the multi-year surface transportation bill that Congress will debate in 2009.
After the House vote, Peters said, "Congress has acted quickly to protect states from the pain of a funding shortfall, but the fundamental problems that plague the nation�s transportation system are far from healed. Congress must now address the pressing need for meaningful reforms to the way we raise and invest transportation funds with the same bipartisan spirit and energy as it did in voting for these additional resources."
House Transportation and Infrastructure Committee Chairman James Oberstar (D-Minn.) said the newly passed House bill "is a short-term solution to a much broader problem" and added that his panel would work with the tax-writing Ways and Means Committee "to develop a sustainable financing proposal to address the nation's transportation needs."