Government

LaHood vows to avert federal transportation bankruptcy

by Elana Schor   •   June 4, 2009 5:30 pm

The Obama administration is working on a plan to fill the shortfall in the nation's highway trust fund by August without adding to the federal deficit, Transportation Secretary Ray LaHood told Congress today.

Transportation Secretary Ray LaHood (Photo: HillBuzz)

The circumstances behind the trust fund's financial troubles are well-known: a nationwide decline in driving coupled with political resistance to raising the gas tax—which has remained static since 1993—forced the Bush administration to push $8 billion into the federal transportation coffers last summer. But that infusion was not offset by corresponding spending cuts, which LaHood says the Obama team is committed to this time around.

"We believe very strongly that any trust fund fix must be paid for," LaHood told members of the House Appropriations Committee's transportation panel. "We also believe that any trust fund fix must be tied to reform of the current highway program to make it more performance-based and accountable, such as improving safety or improving the livability of our communities—two priorities for me."

Urbanites and transit riders may be cheered by LaHood's call to tie new highway funding to livability. Yet the administration's quest to offset its trust fund fix, which will cost as much as $7 billion, could prove fruitless.

Rep. John Olver (D-MA), chairman of the panel that greeted LaHood today, put it simply when asked if the necessary spending cuts could be found. "That'd be very tough," he said, noting that his own annual transportation spending is unlikely to become law before the highway trust fund runs out of cash.

Livable streets advocates may wonder why the highway trust fund is relevant to their cause, particularly since the mass transit account of the fund isn't projected to go bust until 2012.

The answer is pragmatic and incremental—but unfortunately, so is Congress. Replenishing the trust fund with a cost offset, as LaHood suggests, requires a serious conversation about finding new long-term revenue sources for not just highways but all modes of transportation.

If lawmakers take the easy way out by not paying for the trust fund fix, it doesn't bode well for their chances of writing a new federal transportation bill that dedicates more money to streetcars, buses and rail, not to mention more responsible spending on roads.

Already there is a broad acknowledgment in Congress that the six-year federal bill will likely be put off until 2010. Rep. Tom Latham (IA), the senior Republican in charge of transportation spending, even predicted that the federal bill would not pass until 2011; next year is an election year, after all, which never inspires courage in the Capitol.

The ball is now in the court of the Ways and Means Committee, which has jurisdiction over the trust fund and would be tasked with finding spending cuts to offset any upcoming transfer of transportation money. Ways and Means Chairman Charles Rangel (D-NY) has influence and moxie to rival any of his fellow lawmakers, but he has been silent on transportation funding issues as health care and climate change legislation take center stage for now.

Cross-posted from Streetsblog.

Elana Schor is Streetsblog's national reporter, covering federal transportation policy in Washington and nationwide. She has covered Capitol Hill for The Hill, The Guardian, and Talking Points Memo, and lives in Mount Pleasant.