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Senate Approves $8 Billion for Highway Trust Fund

Fri September 12, 2008 - National Edition

WASHINGTON (AP) The Senate voted Sept. 10 to shift $8 billion into the highway trust fund, restoring solvency to an account that is going broke and staving off what could have been crippling delays in federal aid for road and bridge projects around the country.

The voice vote came five days after Transportation Secretary Mary Peters said the trust fund would be out of money by the end of the month and urged Congress to approve the $8 billion replenishment bill that the White House previously had threatened to veto.

The House passed a nearly identical bill in July and was scheduled to vote Sept. 11 to send a final version of the legislation to the president.

"I’m pleased that the Bush administration has finally come to its senses and realized the need to address this problem," Senate Finance Committee Chairman Max Baucus, D-Mont., said.

"What we are facing is indeed a crisis," agreed Sen. Jim Inhofe, R-Okla., the top Republican on the Senate Environment and Public Works Committee, warning that failure to act would disrupt projects in every state. "There are projects that have already been bid. People have been hired. Shovels are in the ground."

The Senate has tried several times this year, and as recently as Sept. 8, to funnel money into the fund, only to be blocked by Republicans who wanted to offer amendments or who objected to transferring $8 billion from the Treasury’s general fund into the trust fund, which is made up of money coming from the federal gasoline tax.

But Peters’ announcement that the fund was running out of money much faster than expected, and the White House’s reversal of position on the bill, changed the dynamics.

Sen. Judd Gregg, R-N.H., who previously had opposed moving on the legislation without an opportunity for amendments, said it would not be right for those involved in projects to "be blindsided by the fiscal irresponsibility of the Congress." But he said he still felt that transferring money from the general Treasury "does even more egregious harm to the future of this country by significantly extending the deficit."

Peters commended the Senate for its swift action to address the immediate crisis, but added in a statement that "Congress must eliminate the billions in wasted spending, thousands of unneeded earmarks and hundreds of conflicting and contradictory special interest programs in order to make sure states don’t face this situation again."

The 52-year-old trust fund provides nearly half of public funding for surface transportation capital projects. It enjoyed a surplus of $10 billion just three years ago, but has seen its financial situation deteriorate rapidly as high gasoline prices forced drivers to cut down on their driving and switch to more fuel-efficient vehicles.

Congress also has refused to raise the federal fuel tax since 1993 despite inflation and sharp increases in construction costs. The federal fuel tax is 18.4 cents a gallon, or 24.3 cents for diesel.

Because highway money is paid out over a number of years, postponement or delay in starting a project can have long-term ramifications. "The urgency of this bill is very critical. We cannot delay it," said Sen. Patty Murray, D-Wash. Without the money, she said, next week federal reimbursements for state projects could drop to as little as 64 percent of promised funds.

Sen. Barbara Boxer, D-Calif., chairman of the Environment and Public Works Committee, said 379,000 construction jobs would be lost if Congress doesn’t endorse the $8 billion infusion.

Congress must act next year to rewrite a five-year, $286 billion highway and mass transit spending bill that expires next September.

Democrats provided statistics showing that, without the fix, federal highway funds going to the states would drop by one-third, from $35 billion in the fiscal year that ends this month to $24 billion in fiscal year 2009. California would see its funds fall from $3.2 billion to $2.3 billion, and Texas from $2.8 billion to $1.9 billion. Job losses would range from 32,000 in California to 1,600 in Vermont.

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