Fund, Fund, Fund 'Til Less Driving Takes the Funding Away

Federal Highway Trust Fund nearly depleted due to driving cutback

Posted at 5:20 AM on 08 Sep 2008

High gasoline prices have spurred Americans to sharply curtail their driving in recent months and the resulting sustained dip in fuel sales has helped bankrupt a federal fund for major transportation projects across the country. The Highway Trust Fund, which is paid for almost entirely through money generated by the federal gasoline and diesel taxes, will be $8 billion in the (pot)hole by the end of September; the huge deficit will delay highway payments to states, could cause a big dip in construction jobs, and may impact future highway projects. Just this summer officials were projecting the fund wouldn't be depleted until at least October and that the debt would only exceed $5 billion sometime in 2009, but they seem to have underestimated the impact of high gas prices. Earlier this year, President Bush had adamantly opposed a spending bill that would provide $8 billion to prop up the highway fund, preferring instead to shift money from a federal mass-transit fund to make up the shortfall. However, faced with the enormous deficit much sooner than thought, Bush reversed course and has agreed to support the legislation.

sources: The Washington Post, Associated Press, The Wall Street Journal, The New York Times, Los Angeles Times

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Comments: (4 comments)

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Raise gas tax?

Um, hello... a fund paid for by gas tax revenue is not keeping up with the costs associated with infrastructure needed FOR CARS.

Federal gas tax is $0.18 per gal, and has been for decades (inflation takes it's toll). If that were jacked up 33% to $0.24, revenue would increase 33%, and the price of gas would increase all of $0.06... which is about as much as it changes week to week these days anyway. A fill-up would cost ~1.5% more. Who'd even notice?

Bikes can save us!!

by GoodCheer at 9:32 AM on 08 Sep 2008

People are Driving Less, Why Build Roads

I'm not sure what the problem is.

If people are driving less, build fewer roads, or even better none at all. The US needs massive investment in rail and public transit to catch up with the rest of the world. The last thing it needs is more roads which only serve to make people more car dependent.

It is not about us, it is about everyone. http://www.everyoneforever.org/

by racc at 11:04 AM on 08 Sep 2008

Drill?

Think about it. If this fund is going brke because of reduced driving, in turn creating less oil demand, why would investors want to fund more drilling?

They don't, drilling is proceeding as fast as it can already. Refining capacity blocks the effect of increased drilling on gas prices even if it could help increase supply.

The only way out of stagflation for this economy is the Obama plan. Reduce oil demand. Stabilize energy prices.

McCain's drill drill drill is more of the same bush strategery that got us into this mess. Oil war to increase supply? We see how that is working.

http://amazngdrx.blogharbor.com/blog John Schneider, Northern Wisconsin

by amazingdrx at 11:13 AM on 08 Sep 2008

Raise gas tax?...

Um, hello... a fund paid for by gas tax revenue is not keeping up with the costs associated with infrastructure needed FOR CARS.

They won't raise gas taxes 'cause it'll be too unpopular.

Yes, they'll still haveta raise taxes anyway, in other areas, and it will cost the same.

But just sayin' the words "gas" and "tax" in Congress is enough to shoot it down, even though they'll end up payin' for it through other taxes anyway.

People are just scared and ignorant like that.

by Tasermons Partner at 2:05 PM on 08 Sep 2008

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