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House backs $8 billion for highway trust fund
By JIM ABRAMS
Associated Press
July 24, 2008

WASHINGTON (AP) -- The House on Wednesday approved an $8 billion infusion into the highway trust fund, restoring temporary solvency to the federal account essential to keeping the nation's roads and bridges safe, functional and in good repair.

By transferring $8 billion from the general Treasury fund in the fiscal year beginning in October, Congress would stave off an anticipated revenue shortfall in the trust fund that could reduce federal highway aid for state infrastructure projects by more than 30 percent, endangering hundreds of thousands of construction jobs.

"This is not the time to begin to reduce our already pathetic and inadequate investment in our transportation infrastructure," said Rep. Peter DeFazio, D-Ore., chairman of the Transportation subcommittee on highways.

But the White House said President Bush would be urged to veto the bill if it reaches his desk. It said taking money from the general fund to prop up the highway system was "both a gimmick and a dangerous precedent that shifts costs from users to taxpayers at large."

Supporters of the legislation, which passed by a veto-proof 387-37, argued that it would merely make up for the $8 billion the Treasury took from the highway trust fund in 1998 when it was in much better financial shape.

"In 1998 it was believed that we didn't need the money for highway investments," said Sen. Patty Murray, D-Wash., who earlier this month included a similar $8 billion transfer in an annual spending bill for next year. "Well, we definitely need it now."

But Reps. Jerry Lewis of California and Paul Ryan of Wisconsin, top Republicans on the Appropriations and Budget committees, wrote to their colleagues urging defeat of the measure, saying it would increase the deficit and remove revenues "that would normally be used to pay for national defense, education, medical research and other congressional priorities."

The trust fund, created in 1956, relies on the federal gas tax of 18.4 cents a gallon, or 24.3 cents for diesel. Just three years ago it enjoyed a surplus of more than $10 billion, but the balance has deteriorated as higher gas prices reduced vehicle miles traveled and induced people to drive more fuel-efficient vehicles. Another factor is that the gas tax has stayed the same level since 1993 despite inflation and rapidly rising construction costs.

It is currently estimated that the trust fund will run a shortfall of more than $3 billion next year. Rep. John Mica of Florida, top Republican on the Transportation Committee, said new estimates about to come out will bump that up to $5 billion to $6 billion.

"The highway trust fund is basically busted," he said. "This is a national crisis."

Because highway money is paid out over a number of years, a shortfall in the $3-4 billion range would result in only about $27 billion being available to state and local governments next year for new infrastructure projects. The current highway act calls for federal aid of $41 billion in fiscal 2009.

The U.S. Chamber of Commerce, in a letter to lawmakers, urged support of the bill and indicated it would be included in their annual scorecard of how members vote on key issues. "Reduction in guaranteed spending in 2009 would disrupt projects already under way and further delay necessary maintenance, upgrades, and expansion of our nation's infrastructure," the business group said.

Senate Democratic leaders tried several times this year to attach provisions to other bills on the Senate floor replenishing the highway trust fund, but Republicans objected to tax revenues proposed to pay for the extra trust fund money.

Copyright 2008 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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