Transportation Secretary Ray LaHood says the Obama administration will propose a remedy for the projected shortfall in the Highway Trust Fund by mid-August, but adds that the White House wants any revenue infusion to the fund to be "paid for," or offset.
He also expressed confidence that the problem will be resolved. "It's going to get fixed," he says.
Key Senators have said DOT and Office of Management and Budget officials told Democratic congressional staffers the trust fund will need an injection of $5 billion to $7 billion by August or federal highway payments to state DOTs will have to be slowed. They also project that an additional $8 billion to $10 billion would have to be added to the trust fund in fiscal year 2010.
The problem, LaHood says, is that motor vehicle travel is down, slowing the inflow of fuel-tax receipts to the trust fund. On the other hand, with the peak summer construction season drawing near, payments from the trust fund for road building are expected to continue at strong levels.
Testifying June 4 before the House transportation appropriations committee, LaHood was quizzed about the trust fund. He didn't say what sort of remedy would be be proposed.
Speaking to reporters after the hearing, he said the type of "fix" is the subject of discussions under way among DOT, OMB and congressional leaders. But he told the subcommittee, "The administration is committed to paying for the $5 to 7 billion to 'plus-up' the trust fund."
LaHood said, "The administration is adamant about this." But offsetting any infusion of money to the trust fund would require finding a way to increase other revenue or cut spending, or a combination of both.
Last September, Congress patched an $8-billion "hole" in the trust fund, by transferring that amount from the general fund to the trust fund. That revenue loss to the general fund wasn't offset.
Increasing federal motor-fuels taxes would solve the trust fund's problem, but LaHood emphatically said the White House wants to put that option off the table. Reiterating a position he has voiced since taking the top DOT job, LaHood told the subcommittee,"The administration does not want to raise the gas tax." He said, "There are a lot of people out of work and I think the last thing you want to say to people is: 'We're going to raise your gasoline taxes.'"
LaHood wouldn't be pinned down about when a trust-fund proposal would be announced, saying only that he hoped it would be "sooner rather than later." He said the deadline is mid-August, when the shortfall is projected to appear.