Another Short-Term Fix Keeps Highway Trust Fund Afloat

WASHINGTON -- Congress has approved a last minute bill to keep highway money flowing to states for another eight weeks. The bill, which was approved by the Senate on May 23, was sent to President Obama who is expected to sign it.

Authority to spend money from the nearly insolvent Highway Trust Fund, the source of financing for most states, was due to expire on May 31. This is the 33rd time in a little over six years that Congress has instituted temporary measures to keep the trust fund afloat.

The problem with the trust fund, as generally perceived, is that it relies on an 18.4¢ tax on a gallon of gas and 24.4¢ tax on a gallon diesel. These taxes, which have not gone up since 1993, cover only $34 billion of the $50 billion the government spends on roads annually. Fearful of backlash from voters, most lawmakers are hesitant to increase the tax at the pump. Proposals to increase fuel taxes by as little as 5¢ a gallon have repeatedly failed.

This latest extension, which will expire on July 31, is predicted to be replaced by yet another short-term fix.