Congress could hit dead end with highway funding
The Highway Trust Fund runs out of money this summer.
Congress is back after the July 4th recess with at least one major piece of legislation that really needs to get worked out: funding for transportation.
The Highway Trust Fund is financed by an 18.4 cent-per-gallon gas tax, which hasn’t increased in 20 years. And that’s just part of the reason there may not enough money.
“Sometime in August, perhaps late July, you’ll see the trust fund running low on fumes to the point where the Federal Highway Administration will have to slow down payments to states,” says Joshua Schank, president and CEO of the Eno Center for Transportation, a nonprofit based in Washington DC. “The immediate effect would be a slowing down or termination of construction projects around the country.”
That means a possible dip in jobs -- According to the Obama administration, as many as 700,000 jobs in all.
But there’s also a long term reason to be concerned.
“The road network suffers dramatically, the transit systems can’t expand, and all of this really has an economic downside to it," says Jack Basso, a former Assistant Secretary for Budget and Programs and CFO at the US Department of Transportation.
Basso says poor infrastructure slows the movement of people and goods. Plus, he says those bridges and roads become even more expensive to fix later on.