Peters says highway trust will be empty by end of month, cites less driving, Congressional inaction
Transportation Secretary Mary Peters says the federal government doesn't have the funds to pay its portion of state projects.
The Trucker News Services
9/5/2008
WASHINGTON — Transportation Secretary Mary Peters says the federal highway trust fund will run out of money this month.
Peters blames the shortage of funds on the high price of gasoline, which has prompted Americans to drive less. And by driving less, they use less fuel and pay less in federal gasoline tax.
At a midday press conference Friday, Peters said the agency will have to delay payments to state road and bridge projects that the federal government is helping finance.
At the same time, she wants Congress to pass legislation that includes $8 billion to help cover the shortfall.
Four times this year, Republicans in the Senate have blocked a measure that would shore up the fund.
“Time and again, the President has warned Congress of the pending shortfall and submitted fiscally prudent budgets to close the gap,” Peters told reporters. “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, 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.
Peters said the legislation was needed now because Congress had failed to heed over three years of warnings from the President and the DOT 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.
Peters 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.
Peters said 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 DOT would 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.
Peters claimed 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,” Peters 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.”