Sunday, October 25, 2009

Highway Trust Fund Extension Battle Narrows

Last time Congress paid any attention to the need for a long term federal funding mechanism for highway, waterway and transit construction, the battle was between House leaders who wanted a long term bill by the end of this year, and Senate leaders, who wanted an 18 month extension to try and figure out how to make up for declining motor fuel tax revenues as vehicles get better mileage while folks drive less. The Senate desired extension through March 2011 would have pushed any tax increase needed beyond the next election cycle.

The battle is still going on, but Senate leaders have backed down to asking for a temporary funding extension at past levels through the next six months, and House Transportation and Infrastructure Chairman James Oberstar seeking a three month extension, so a six year permanent funding bill can be completed before year end. Either way Congress will have to face the revenue issue before the next elections. Oberstar has a draft bill appropriating $500 billion over the next six years, but House Ways and Means as yet has not begun to explore ways to raise that much revenue. Motor fuel taxes won’t do it at present rates of taxation and fuel consumption. Motor fuel tax increases, a new tax on miles driven, with some method of tracking personal and commercial vehicle mileage, and other alternatives have been raised, but none has been explored in detail.
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