The House of Representatives today approved a $7 billion infusion into the Highway Trust Fund to keep the account solvent through the end of the fiscal year. The measure passed the House by a vote of 363 to 68. Following are T&I Committee Chairman James L. Oberstar’s comments in support of the legislation.
FLOOR STATEMENT OF THE HONORABLE JAMES L. OBERSTAR
H. R. 3357, TO RESTORE SUMS TO THE HIGHWAY TRUST FUND AND FOR OTHER PURPOSES
JULY 29, 2009
Madam Speaker, I rise today in strong support of H.R. 3357, to restore sums to the Highway Trust Fund.
This legislation, introduced by Chairman Rangel, Chairman Obey, and me, includes a provision restoring $7 billion to the Highway Account of the Highway Trust Fund to ensure that the U.S. Department of Transportation (DOT) can meet its existing commitments under the Federal-aid Highway program.
According to DOT, the Highway Account of the Trust Fund may run out of cash as early as the beginning of September and may not have enough funding to fully reimburse States for their Federal highway investments.
This situation makes clear that we have reached the logical conclusion of the course set by the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU). Unfortunately, the legacy that has been left for users is an over-extended Trust Fund, uncertainty, and potential funding cuts.
SAFETEA-LU intentionally put the Highway Trust Fund on the path to a zero cash balance. Recent declines in vehicle miles traveled due to high fuel prices and the weak economy have merely exacerbated a pre-existing imbalance between Trust Fund revenues and expenditures that was created by SAFETEA-LU.
The previous administration’s unwillingness to make hard choices has left the 111th Congress, and particularly the Committee on Ways and Means and the Committee on Transportation and Infrastructure, with the unenviable task of finding a way to finance the existing program level, in addition to much-needed increases in investment.
Since taking office, the Obama administration has implemented a system to closely track actual Trust Fund revenues, outlays, and balances, and has been communicating with Congress the need to take steps to address this situation before we reach the crisis point.
According to DOT, by September 4, the Highway Account will not have sufficient funds to fully reimburse States for highway projects (-$285 million), and DOT will immediately begin rationing reimbursements to States, creating cash flow problems for States and significant uncertainty for the future of the program.
By October 1, DOT estimates that, without action by Congress, the Highway Account balance will be -$1.9 billion.
However, this shortfall amount is only an estimate and the estimate is subject to a series of revenue and outlay adjustments that occur in August and September that could cause negative adjustments to the Trust Fund balance, including:
* the “true-up” of the account in which the Trust Fund will have to reimburse the General Fund if previous payments of estimated fuel taxes into the Trust Fund are greater than the taxes actually owed;
* the annual mid-session review of the President’s Budget which updates economic assumptions and can affect vehicle miles travelled estimates;
* the receipt of actual revenues and outlays that differ from DOT’s current estimates; and
* the need to maintain a minimum balance in the Trust Fund to continue daily reimbursements for the States.
In fact, last August, reconciling Trust Fund revenue receipts with prior revenue projections caused a downward adjustment in the Trust Fund balance of -$3.2 billion.
While such a dramatic swing in Trust Fund revenues is unlikely under the procedures adopted by the current administration, restoring $7 billion to the Highway Account of the Trust Fund will cover the projected shortfall and provide a cash balance to offset any additional shortfall if the DOT estimates are in error.
Failure to act will mean that the Federal Government will be unable to pay all of the bills submitted by the States for reimbursement under the Federal-aid highway program. If that were to occur, under current law, the Federal Government will be required to pay interest on unpaid bills.
In addition, many states would begin to experience immediate cash flow problems if they are not fully reimbursed for Federal-aid highway projects.
We must enact this critical legislation this week to avoid slowdowns or reductions in infrastructure investment, and the loss of any more American construction jobs.
Both the Congressional Budget Office and the Joint Committee on Taxation have determined that this proposal does not constitute a spending outlay, would not violate pay-go, and will have no revenue effect.
Enactment of this legislation will ensure full funding of the highway investment levels authorized by current law, and prevent devastating slowdowns or cuts in each state’s federal highway funds.
While H.R. 3357 is a short-term solution, it is essential that we resolve this immediate crisis. As we proceed with consideration of H.R. ____, the “Surface Transportation Authorization Act of 2009”, we will continue to work with the Committee on Ways and Means to develop a sustainable financing proposal to address the future of surface transportation.
I thank the gentleman from New York (Mr. Rangel), the distinguished Chairman of the Committee on Ways and Means, for his leadership in ensuring that these funds are provided to sustain the Highway Trust Fund.
I strongly urge my colleagues to join me in supporting H.R. 3357.
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