Last updated: July 01. 2014 11:17PM - 379 Views
Associated Press



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WASHINGTON — Gridlock in Washington will lead to gridlock across the country if lawmakers can’t quickly agree on how to pay for highway and transit programs, the Obama administration warned Tuesday.


States will begin to feel the pain of cutbacks in federal aid as soon as the first week in August — peak summer driving time — if Congress doesn’t act, Transportation Secretary Anthony Foxx said in a letter to states. That’s because the balance in the federal Highway Trust Fund is dropping and will soon go below $4 billion, the cushion federal officials say is needed for incoming fuel tax revenue to cover outgoing payments to states.


The cuts will vary from state to state, but will average about 28 percent, Foxx said at a breakfast with reporters. By the end of August, the trust fund’s balance is forecast to fall to zero and the cuts could deepen.


Obama raised the issue briefly in a Cabinet meeting, and was expected to expand on it further at an event at Washington’s Key Bridge later in the day.


Revenue from federal gas and diesel taxes continues to flow into the fund, but the total is expected to be about $8 billion short of the transportation aid the government has allocated to states this year. Over the next six years, a gap of about $100 billion is forecast if transportation spending is maintained at current levels.


At the same time, transportation experts and industries that depend on the nation’s highways to get their products to market are calling for greater spending on transportation to shore up aging roads, bridges and tunnels and to accommodate population growth.


The reason for the shortfall is that revenue the federal 18.4-cents-a-gallon gasoline and 24.4-cents-a-gallon diesel tax hasn’t kept pace with transportation needs. The taxes haven’t been increased in more than 20 years, while construction and other costs have continued to go up.


The most obvious solution is be to raise fuel taxes, which is what several blue-ribbon commissions have recommended and business groups like the U.S. Chamber of Commerce and the American Trucking Associations have urged. But neither party or the White House wants to get out front on a proposal to raise taxes in an election year. The administration is pushing a plan to close tax loopholes and use the revenue to pay for increased transportation spending for the next four years.

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