700,000 jobs at risk if highway fund falters

The government is warning that the Highway Trust Fund, which finances major highway, bridge and transit projects, will dip below a critical level as early as July.

By The Fiscal Times May 14, 2014 2:54PM

By Eric Pianin, The Fiscal Times


The Obama administration warned Tuesday that failure to avert a threatened bankruptcy of the federal Highway Trust Fund this summer could mean the delay of about 112,000 roadway projects and 5,600 transit projects -- and cost the economy as many as 700,000 construction jobs in the next year.


The Department of Transportation has projected that the Highway Trust Fund, which finances more than $50 billion a year in major highway, bridge and transit projects, is running out of money and will dip below the critical level of $4 billion as early as July.

The trust fund has been financed by receipts from an 18.4 cents per gallon gas tax and a 24.4 cents per gallon diesel fuel tax. More recently, revenues have seriously lagged behind highway project expenditures and the government has had to shift money from other accounts to keep the fund solvent.


After this year's terrible winter, some state and local governments have already begun pulling back on plans for critical road repairs. Things could get worse if Congress and the Obama administration allow a four-year transportation funding authorization law to expire this fall without a replacement.

"The moment is dire," Transportation Secretary Anthony Foxx said at a Bloomberg Government event Tuesday. He said the trust fund "is quickly running toward insolvency."


"We're already seeing states slowing down their programs of work," Foxx also told D.C. radio station WTOP. "By June or July, we'll start to see states slowing down some . . . contracts [for] the fall. We have 700,000 jobs that are going to be at risk. Obviously, we're losing the opportunities to create the connections and the safety that Americans count on in their road systems."


As just one example, Democratic Gov. Pat Quinn of Illinois recently announced a six-year transportation plan to complete dozens of key projects. But because the plan anticipates using $6.99 billion in federal funding to match $1.16 billion in state funding and $450 million in local funding, projects may not make it off the drawing board without the certainty of that federal contribution, according to a new study by Transportation for America, an alliance of elected, business and civic leaders.Image: Highway © Rich Reid, National Geographic, Getty Images


Recently, Foxx visited the site of a bridge replacement and corridor improvement in the Quad Cities on the border of Iowa and Illinois. The project could face serious delays if new work can't begin next year.


Lawmakers are grappling with a Sept. 30 deadline for reauthorizing the government's surface transportation bill, which provides funding for road and transit projects nationwide. A Senate panel this week unveiled bipartisan legislation that would authorize six years of highway programs acting with construction projects at risk of slowing months before the November mid-term congressional elections.


The bill, drafted by Senate Environment and Public Works Committee Chairwoman Barbara Boxer, D-Calif., and other members, would provide the current level of spending plus inflation. However, it doesn't address how precisely to raise the revenue -- a matter that will be left until later for congressional tax-writers and that threatens the proposal's chances of making it into law.


Meanwhile, House Transportation and Infrastructure Committee Chairman Bill Shuster, R-Pa., hasn't yet offered his version of the legislation.


The non-partisan Congressional Budget Office told senators recently they would have to either increase the federal gas tax by 10 or 15 cents per gallon -- a nonstarter in an election year -- or find between $13 billion and $18 billion per year from other sources to maintain current infrastructure spending projects.


During his Bloomberg appearance yesterday, Foxx said that temporarily boosting U.S. taxes on companies' overseas earnings is the most feasible way to provide the additional funding needed to rebuild aging highways and mass transit systems.


President Obama proposed a four-year, $302 billion bill that would raise $150 billion through taxes on overseas earnings and by closing loopholes that would normally let companies defer those obligations.


Senate Finance Committee Chairman Ron Wyden, D-Ore., so far has declined to take a position on the funding source. He said he was against passing a short-term extension by the Sept. 30 deadline for reauthorizing the current surface transportation-funding bill. "It would be a tragic mistake to let highway funding become another stop-and-go extender," Wyden said. 


"Right now our proposal is the best way to thread the needle and get something done," Foxx said of Obama's overseas earnings tax plan.


In another bid to highlight the looming highway funding crisis, Obama will be in New York on Wednesday to discuss U.S. infrastructure needs near the 58-year-old Tappan Zee Bridge, which connects Westchester and Rockland counties, north of Manhattan, and was designed to last just 50 years. A $3.9 billion replacement is currently in the works.


More from The Fiscal Times

26Comments
May 14, 2014 4:11PM
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A significant part of the problem is, today a major cost of construction costs are environmental and engineering costs. Need to get back to basics and build the roads and quit spending half the funds on engineers and environmental concerns.
May 14, 2014 4:23PM
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The bill, drafted by Senate Environment and Public Works Committee Chairwoman Barbara Boxer, D-Calif., and other members, would provide the current level of spending plus inflation. However, it doesn't address how precisely to raise the revenue -- a matter that will be left until later for congressional tax-writers and that threatens the proposal's chances of making it into law


Let's spend it before we know where it's coming from. That's the problem with our government. We cannot continue to spend, give away, waste money we DO NOT have.

I love the part about leaving that matter, paying for it, for later. In other words, on somebody else's watch. 

May 14, 2014 3:57PM
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What happened to shovel ready? Though not expected to be an ongoing source of funds, seems like the types of projects mentioned in the article would qualify.
May 14, 2014 4:56PM
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Very interesting headline - my first reaction was to wonder where they got the 700k figure.  All it took was reading the 1st paragraph to find out, and surprise, surprise, surprise - that number came from the Obama administration!  Seriously, after all the lies over the last 5 years, why would we believe anything they say now?

And maybe the highway trust fund would be in better shape if an actual budget had been passed and signed in the last 5 years.  And we're only talking about a $50 billion here - what happened to the trillion dollars you spent on "shovel ready" infrastructure projects in the stimulus bill of 2009?

The federal gov has more revenues now than ever before - and yet it will never be enough.

It's a spending problem, stupid.



May 14, 2014 4:56PM
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congress would rather give money away to other countries that hate US than help people of the UNITED STATES !!!!! tired of congress / senate putting other countries over our own people !!!! we have no money for the people of the U.S. but we have plenty to give out to the useless countries
May 14, 2014 9:00PM
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There is always some sort of crisis going in with this administration.  Doesn't that make you people wonder?  Why is there always a budget problem with this administration?  Why are we always on the verge of chaos if something isn't immediately done?  Why does this administration always wait to the last minute to do something that should have already been taken care of?

its been over 5 years now with this obama administration and this type of crisis governing still hasn't stopped and prob never will.  Obama needs a crisis to constantly keep people distracted

May 14, 2014 5:51PM
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Look Out! Prelude to more taxes!!!!  "We ain't gots no monies" but we can fly all over the world in our luxury liners with a big belly shute dumping cash by the millions on other countries!!!

 

I sincerely hope this rathole goes UNDER soon!  I am sick of the nickel and diming of American Citizens!!!

May 14, 2014 4:18PM
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We can come up with hundreds of billions of dollars in stimulus, but we can't fix our roads? Like the old saying goes "Where there's a will, there's a way".
May 14, 2014 4:20PM
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And the "Fundamental Transformation" just marches on.
May 14, 2014 6:08PM
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Remember the promise back in 2009 that "millions of jobs will be created or saved" because of the stimulus bill?  Maybe these 700k jobs will be classified as "lost or not created" if Obama's demands for highway funding aren't met.

Gotta love it when pols keep using arbitrary stats that can never be verified.... 
May 15, 2014 7:18AM
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According to the Obama admin the sequester was going to result in over 1M lost jobs.  They checked out on one of the departments that was suppose to be hit hard and the total was one person impacted.  They were able to shift money from non-essential stuff to cover everyone else.  That's the way government works...
May 14, 2014 11:04PM
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Big fat liars. So they don't have 100% of the funding they need so the entire system shuts down? That is not how it works, bunch of fear mongers. If they have 90% of the funding then 90% of the projects get funded. They need to cut the other 10% from somewhere else much like like they stole money from the DOT for years to pay for other social welfare programs.
May 14, 2014 10:30PM
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Spending Bills have to begin in the House.   Before a single dime is added to the budget, the following must be done:


1.  Spending MUST be cut elsewhere to balance out this increase.

2.  All other non-highway spending MUST stop.

3.  There cannot be an increase in ANY tax to fund this.  


Government has to choose it's priorities, and live within it's means.

May 14, 2014 8:54PM
May 14, 2014 8:12PM
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Another example of no leadership in Washington D.C. get rid of all those losers and take their pensions. They didn't do anything to earn them but to sell out to a bunch of lobbies.
May 14, 2014 5:31PM
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Obama's answer to the keystone pipe line. 700,000 jobs just another Obama lie.
May 14, 2014 7:20PM
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Every time we buy gas we pay tax per gallon for highway maintenance. Has that money been misdirected into some politicians personal pork barrel accounts? Where are the billions going in Quantum easing? This is way out of control. Feds inflation policies, politicians just raking every penny from everyone who works. The government does not need our income tax money, workers need it to survive the federal reserve inflation policies. Knock Knock, Who's There? Check. Check Who? Check Politicians Pockets for highway funds. 015% COLA for seniors and what % did political leaders give themselves? Whatever it was it was too much even if it was nothing.
May 15, 2014 6:22AM
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I 'm sorry but I would find it hard to believe anything the current Administration says!
May 15, 2014 7:59AM
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I have a way to reduce costs...   End prevailing wages in the letting of contracts.   Why insist that the government PAY the most of anyone in every area?  Give the taxpayers a break and insist all contractors be 'right to work'.  



May 14, 2014 8:51PM
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A. Our roads are poor, especially in Michigan.
B. If we weren't slaves to gas and oil, trucks wouldn't be ruining our roads.
C. America is largely unemployed, shouldn't there be less traffic?
D. Less sprawl, less mall... where are our jobs?
E. Save the Highway Fund, stop paying deadbeat career politicians across the nation. 
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