The Highway Fund is Almost Broke

Written by SK Ashby

In a little over two weeks time the federal government will be unable to pay for ongoing infrastructure projects unless Congress acts.

Transportation Secretary Anthony Foxx has informed every state department of transportation that they could be on their own soon.

"Unless Congress acts prior to [May 31], the Federal Highway Administration (FHWA) will be unable to make new obligations of Federal-aid funds for your department's highway projects," he continued. "Furthermore, unlike last summer's cash shortfall when states faced the prospect of delayed payments, under a lapse in authorization, reimbursements on all projects will be halted completely, not simply delayed."

Why hasn't Congress acted? Because they can't agree on how to pay for it.

Moreover, it would be fair to say that congressional Republicans cannot agree if we should pay for it.

Congressional Democrats sought to pay for the legislation by increasing the tax on gasoline, which hasn't been raised in over 20 years, but congressional Republicans ruled that option out.

After returning to the drawing board, Democrats proposed that we pay for our infrastructure project by levying a tax on overseas profits. Republicans, for their part, appear to be open to the idea, however they believe taxes on repatriated profits should be paid voluntarily.

I can't fathom a reason why any corporation would voluntarily chose to pay taxes that they are not obligated to pay.

Needless to say, Congress is at the impasse and it's not clear how the highway fund will be restored. "Fiscal responsibility" apparently does not include paying for things.

Consumption taxes are all the rage among so-called fiscal conservatives these days, but they oppose increased gasoline consumption taxes for dubious reasons.