Copyright 2008, Traffic World, Inc.
Suddenly, the Highway Trust Fund''s impending insolvency has gone from a political problem in Washington to a tangible reality affecting transportation projects across the nation.
In an abrupt turnabout, Transportation Secretary Mary E. Peters declared the fund, used to distribute federal gas tax revenue to states for their transportation projects, would most likely go broke by the end of the month.
Peters called upon Congress to swiftly pass an $8 billion transfer into the Highway Trust Fund, a dramatic about-face from an administration stance less than two months ago threatening to veto the very same legislation.
The news left Democrats in the Senate scrambling to find a way to make a transfer from the General Fund into the Highway Trust Fund - a proposal that easily passed the House in July.
But last week, opposition from a few Republican "recalcitrants" - as Rep. James L Oberstar, D-Minn., deemed them - was successfully stymieing their attempts.
As a result, starting Sept. 8, state departments of transportation were informed the Federal Highway Administration would begin rationing reimbursements, ending its longtime routine for a prorated payment once a week.
Pennsylvania officials announced the shortfall could cost the cash-strapped state $543 million due to them in the next fiscal year, jeopardizing the state''s bridge and highway program.
Even Peters'' home state of Arizona, which took in $650 million in federal money for highways and other transportation projects last year, was not immune to the cash crunch, announcing they would be putting six highway projects on hold.
"As a result of federal mismanagement and funding loss, Arizona will be forced to delay vital highway projects at a time when we are facing crippling congestion and a need for economic stimulation," said Gov. Janet Napolitano.
The announcement by the Department of Transportation was especially shocking considering five weeks prior the Bush administration had estimated the Highway Account had an estimated $4.3 billion surplus, according to the 2008 Mid-Session Review released by the Office and Management and Budget.
Peters said a remarkably steep decline in vehicle miles traveled - 50 billion over the past eight months - led to a drop in gas tax receipts, causing the Highway Trust Fund to go bust.
"This isn''t a surprise," Peters told reporters. "The fact that it happened somewhat sooner - we''ve contemplated and reported that this could have happened.
Still, highway lobbyists and others who had been sounding the alarm about the Highway Trust Fund''s approaching insolvency were unhappy with the last-minute turnaround.
"It''s too bad that it has taken an emergency to force the administration to pull its head out of the sand and appreciate how serious this problem is," said Sen. Patty Murray, D-Wash., chairwoman of the Transportation and Housing Appropriations Subcommittee.
"This is a problem that could have been averted if they had been on board with the rest of the transportation community in asking for a trust fund fix throughout this year," said Janet Kavinoky, the U.S. Chamber of Commerce''s top transportation lobbyist.
Still, Kavinoky said she was glad the Bush administration had changed position and along with others, such as the National Association of Manufacturers and the American Trucking Associations, joined in calling for quick passage of the legislation in the Senate.
But with less than three weeks remaining until Congress adjourns until 2009, it remained to be seen if Democrats could overcome an effort being led by fiscal conservatives Sens. Judd Gregg, R-N.H. and Jim DeMint, R-S.C., who promised to tie the legislation to such hot-button issues as earmarking and energy policy.
"(When legislation is brought) to the floor to address this shortfall, I will offer amendments to actually fix the problems that caused this shortfall in the first place," DeMint said.
Senate Majority Leader Harry Reid, D-Nev., noted if the transfer is successfully stopped it would mark the fifth time in three months Republicans have blocked attempts to fix the trust fund.
Others remained enthusiastic. Senate Minority Leader Mitch McConnell, R-Ky., has said a solution to the impasse would be found by the end of the week.