Congress must fix highway funding shortfall, says U.S. transport chief

Reuters News
Posted: Feb 20, 2014 1:38 PM

By Eric Beech

WASHINGTON (Reuters) - With federal funding for U.S. highways set to run dry within months, U.S. Transportation Secretary Anthony Foxx urged Congress on Thursday to show "a little political courage" and come up with long-term solution to pay for roads.

The Highway Trust Fund, which relies on an 18.4-cents-a-gallon tax on gasoline to pay for the federal share of spending on roads, could run out of money "perhaps as soon as August," Foxx said at a U.S. Chamber of Commerce conference.

The tax hasn't been raised in two decades, and with Americans driving less since 2007 and turning to more fuel-efficient vehicles, the trust fund can't keep pace with the country's road building and maintenance needs.

"Congress is going to have to show a little political courage to face this problem," Foxx said.

He said the long-term health of the U.S. economy and its global competitiveness depended on a robust infrastructure.

"It's a problem not just in Washington, it's a problem on Main Street because literally, things will grind to a very slow pace for infrastructure in our country at a time when we need to be investing," Foxx told reporters after his speech.

In a report in 2013, the American Society of Civil Engineers said the country's infrastructure was in a woeful state from lack of investment, with one in nine bridges structurally deficient and 40 percent of major highways congested.

Foxx said more than $70 billion a year was needed to fix U.S. highways.

The U.S. Chamber of Commerce and the AFL-CIO labor federation have proposed increasing the fuel tax, which raises about $35 billion a year in revenue and includes a 24.4-cents-a-gallon levy on diesel, but there appears to be little support in Congress for such a move.

President Barack Obama has called for using some of the savings from proposed corporate tax reform to replenish the highway fund, but it seems unlikely that a major tax overhaul could pass Congress in an election year.

Foxx suggested the administration was open to other ways of finding the revenue.

"We're interested in working with folks that want to get something done," he said.

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Senate Environment and Public Works Committee Chairwoman Barbara Boxer, a California Democrat, has proposed doing away with the gas tax and instead, raising revenue from a levy on oil at refineries.

House Transportation Committee Chairman Bud Shuster, a Pennsylvania Republican, has supported a tax based on the number of miles driven, rather than fuel consumption.

Federal funds account for about 45 percent of state spending on roads and bridges, and Foxx said concern that the trust fund was running out of money had caused some projects to be put on hold.

He said the administration may have to slow payments to states as the fund becomes depleted.

"We don't want to go into emergency measures but that has got to be on the table if we get close to a crisis," Foxx said.

(Reporting by Eric Beech; Editing by Bernadette Baum)