Another Highway Bailout and How Not to Finance It

On May 30, 2014, House Republican Leaders announced a plan to bail out the federal Highway Trust Fund (HTF) to the tune of $15 billion, paying for it with savings generated by reforms to the U.S. Postal Service (USPS). This proposal is flawed on a number of levels and should be rejected by Congress.

Highway Bailout:

Under current law, drivers pay a tax of 18.4 cents per gallon on gasoline and 24.4 cents on diesel fuel, which gets deposited into the HTF. Excessive spending levels set by highway bills enacted in recent years, and many spending diversions to non-road, non-bridge activities, have left the HTF with too many bills to pay but not enough money on hand. An additional $5 billion is needed to keep spending on pace through the end of the fiscal year, and that figure jumps to $15 billion for a one-year extension at current spending levels. If Congress does not bail out the HTF by the end of July, the federal government will continue to collect federal gas tax revenues, but it would have to begin slowing down its reimbursements to state Departments of Transportation.

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