With highway money running out, President Bush pulls a U-turn

Earlier this year, the U.S. government's highway trust fund -- which pays for large highway projects across the country -- was projected to run low in 2009. But President Bush threatened to veto legislation that would have bailed it out with general tax money.

An administration statement called legislation to make the transfer  "a gimmick and a dangerous precedent" that would "unnecessarily increase the deficit."

But now, even before 2009, the highway fund is running out of money faster than expected back then, and the administration has made a political U-turn, the Los Angeles Times' Richard Simon reports. It is asking Congress to speedily approve an $8-billion rescue plan.

"At current spending rates," Transportation Secretary Mary Peters said today, "we will start the new fiscal year on Oct. 1 with a zero balance in the trust fund, and will continue to spend more than we take in."

She said in a conference call with reporters that the problem is so urgent that Congress needs to send legislation to the president by ...

... the end of next week.

The fund's situation grew more desperate when high gasoline prices led motorists in recent months to reduce their driving and to buy more fuel-efficient cars. That's good for the environment, but it is bad news for federal coffers that rely on gasoline tax revenues.

This month, for example, the Transportation Department expects to take in about $2.7 billion, but receive $4.4 billion in requests  from the states.

Short of coming up with a major Lotto windfall,  word from Capitol Hill is that Bush may have little choice -- his earlier veto threat notwithstanding.

Rep. John Mica of Florida, the top Republican on the House Transportation Committee, put it this way:  "Unless we act now, each state’s highway programs will experience severe disruptions and thousands of highway projects may be delayed or canceled."

Sen. Patty Murray (D-Wash.), who chairs the transportation and housing appropriations subcommittee, saw the risk not just to "critical highway construction and repair projects," but also to employment.

“This crisis could lead to millions of construction layoffs," she said.

In other words, an $8-billion highway rescue plan is providing political mileage around the country.

-- James Gerstenzang

Photo credit:  Irfan Khan / Los Angeles Times

Comments

[Ron Jenkins]

Now, if we only had a gas tax holiday.

[BOB]

The Republicans have bankrupted this country through war and mismanagement. McCain will continue it. He just wants a name change in the White House. They have taken away more constitutional rights in the last 8 years than the founding fathers could have ever foreseen.....because they ignore our constitutional rights.

Republicans attack, then whine. We are 5% of the world's population. We better start learning to get along with the other 95%.

It is deplorable what has happened to the Republican Party. That's why I left.

Hope and TRUE Change. Obama and Biden 08.

[El Mugroso]

Bush wants to grab as much money as he can, before leaving, and give it to his contractors. That's what it's about.

[Arun]

yep...keep spending $10 billion a day in Iraq. there will be lot more highways and jobs here...

[ferplexion]

So John McCain wants to drastically cut funding for this vital program that's already nearly broke? Could his policy ideas be any worse?

[Earl]

And when the entire U.S. government is bankrupt, the deserter in chief can strut around in front of a banner which says "MISSION ACCOMPLISHED"

[Mike]

The fuel prices in Europe still cost at least twice as much as they do here. Raise fuel taxes to pay for the highways. The moere pain the average people feel the more they will pursue more earth friendly alternatives. Les we forget

[B.J.]

If people are driving less, can't we save money by scaling back highway projects?

[Stephen M]

Typical Government spending.
Every State needs Highway work and improvement. however you can not spend more than you earn.
Let the well run dry, people get creative when there is no money.
Don't approve more federal funds than you can supply.

[thebob.bob]

Decades ago, elections were held where voters would decide which candidate they would send to Washington to participate in effective, good government. When Ronnie Raygun declared war on government itself, 'good' government became an oxymoron, incompatable with Republican ideology. Now, after 30 years of doing everything they could to dismantle 'good' government, to (in the words of the Contract on America) strangle it and starve it to death, the Republicans have succeeded. Everything that government should do has been crippled by ideological intent. So..No more highways, no more sewage treatment, no more effective military, no more health and safety inspection. Go ahead Republicans celebrate. You've done it.

[johannes]

Reduced gas-tax revenue due to reduced gas consumption and increased average MPG. It is obvious: Pump up the gas tax to recreate equilibrium and reinvigorate the highway trust fund.

[spark240]

So driving is on the decline, but we need to keep spending billions on highway construction to avoid unemployment in the highway construction sector?

Forget about propping up the highway system. Spend the money on railroads while we still can. We could subsidize construction employment and get more practical and efficient infrastructure.

[Lois Schmidt]

How in hell can DOT POSSIBLY be running out of money? They take in billons a week, probably per day!, from EVERY SINGLE GALLON OF GASOLINE OR DIESEL FUEL sold in America! Someone better call for a strict audit - but good luck with that!

[four cylinder]

Maybe we should ask the governor of Alaska to give back the $223 million they ACCEPTED and spent for the BRIDGE TO NOWHERE. Thanks, but no thanks is BS!!!

[Am I Dreaming]

I try to see the positive in any situation:

The roads in Iraq have never been in better shape, and it's all free!
What a country!

[MNS]

We could have brand new highways all accross the country by now if we didn"t fight in that STUPID war. But then the general public are just to scared to make a decision on what makes them safe. We hear terror.......and then the public follow like sheep. I AM A PROUD AMERCAN THAT IS EMBARASSED BY AMERICANS TOO BLIND AND/OR STUPID TO QUESTION THE REPUBLICAN'S AGENDA.

[We need new leaders]

We're broke. We're borrowing money from Asia and Europe. We can afford to ride around in helicopters all day long looking for that demon weed and send dozens of drug warriors into the forest but we have to borrow the money from China to do it. We should tax it and use the money for the roads. But, we're stupid and drug free. We're giving a billion dollars to Georgia. We're most likely borrowing it from Russia to give to Georgia who will pay Russian contractors (Russian mob) to fix what Russia broke. We're stupid and broke. The people that run this country are absolutely selfish and stupid. You can bet the politicians aren't suffering. Look up what is served in the congressional cafeteria. Look at what you eat. Yep, they're not suffering. The Chinese look 50 years ahead. We can't plan 50 days ahead. Yet the politions think we can't see all of this because we're stupid...and because we're stupid, we're broke. You see, it's all our fault.

[Jan Swesey]

With the highway trust fund falling short, we should be happy. For the first time in a long time we see just where the dollars are going and where they are coming from. The thing to do is to raise the price of gasoline (with a bigger gas tax to make up the short fall) and let consumption fall that much further. It will be a descending spiral. Why should the public have to once again pay the great cost of the Auto transportation system hidden in a general tax or through inflationary spending or money printing? Let People know just how much money the car and gas really cost. We need to stop throwing good money after bad just because Bush is a OILMAN-IAC, why should we continue supporting him( and his) at the pork barrel trough. Buck up Democrats, show some spine and let the chips fall where they will. This is all part of the "smaller" gov. that the Republicans wanted. The GOP spent us into bankruptcy so lets be bankrupt and move to alternate fuels. Democrats stop trying to hide all the damage the GOP has done to the US. If we don't feel the pain we won't change our ways!

[fromNC]

If I ran my company finances like this, I'd be out of business. If I ran my home finances like this, I'd be in bankruptcy court or in jail. When I run out of money near the end of the month I have to prioritize my spending! Their plan is simply to take more money from us. What a disgrace, both Democrat and Republican alike!

[Silverthorn]

So, duh! The gasoline sales tax has remained essentially unchanged since gas was around $1.00 a gallon. Increase it to a reasonable percentage of the pump price, and the highway trust fund would have an embarassing surplus. We could use the surplus to fund bike paths and public transit -- which is what we should have been doing all along.

[Sarcasm]

This is simply a sacrific we need to make in order to establish a beacon for democracy and freedom in the middle east. How can you whiners be complaining about basic infrastructure, education and healthcare when we should be focused on supporting our troops in Iraq? We are fighting a war and the only way to win that war and insure our safety is to cut all that pork our of our budget and drill for oil in Alaska. Jobless? Can't afford your house payment? To effin' bad. You have been spoiled with houses and jobs for to long, now your going to find out what it means to be a Real American. Maybe then you will appriciate a tax credit when you get it.

[germanguy]

Bush-McCain... Same-same. McCain our American 'Nero", opps I mean 'hero' will sit in the White House 'fiddling while Rome" - opps I mean 'America' burns.

I have great difficulty in defining McCain's meaning for the word "reform". According to McCain he fought against 'pork' spending while in Congress. He spoke out against the "bridge to nowhere" an almost $300 million project, which was the efforts of Sarah Palin as mayor, who paid lobbyists to fight for it. The bridge to nowhere by the way, was to service a small airport that handled only 10 commercial flights a day. There was already a ferry that ran every 15 minutes to the island. One resident of the island of 50 people stated that she worked at the hospital and that it took her 5 minutes to get to work via the ferry. During this time Sen. Stevens and Young were fighting for the money in Congress. Stevens even threatened to quit Congress if he didn't get the money.

McCain's fight against this spending, eventually caused Sarah to give up on the idea. another part of this same Transportation Bill for Alaska was to spend another approx. $300 million to connect a single home to a community of 22 residents.

Keep in mind the following, this money could have been spent at the time to inspect bridges in repair in numerous states. McCain even stated that the money could have very likely prevented the collape of the bridge that killed 13 people. Additionally, Congress wanted to divert this money to the recovery of hurricane Katrina, but that is the time when Stevens threatened to quit. Result was the money went to Alaska instead. Later Sarah gave up on the bridge and stated that the over-runs prevented the bridge's construction. A big question that remains after all this, is where did all that money end up going, since it was designated for infrastructure only?

The total amount given to Alaska was almost a billion dollars ($941 million). It seems that the smallest states get the biggest part of the pie. That equates to every citizen in the lower states getting $86, while each resident of Alaska got $1500.

Simplified that means, McCain fought against Palin on the 'bridge to nowhere'. Palin thought only of the people in a small town in Alaska, not the 13 people who lost lives to a collapsing bridge or were victims of hurricane Katrina. And to all home-owners here in the lower state, who pay Property Taxes, keep in mind, that the state of Alaska has NO MANDITORY PROPERTY TAX!!! The oil companies keep the state coffers alive.

I am really angry about this, because I had relatives living through Katrina.

The big questions in my mind after all this is: Where did that billion dollars go and what was the true reason for McCain picking Palin, given her prior actions? I know one thing for sure, is the reason Alaskans love her, is because as Senator Stevens stated when he bragged to his local constituents about how he "not only brought home the bacon, but he also stuffed the turkey". She will do the same for the state that she so dearly loves (but that is another story, isn't it).

[billbb]

And the highway funds deficit comes after the Shrub Administration raided funds earlier this year that were supposed to go to transit - a double whammy of taking away one more path to less dependence on imported oil or desperate drilling. And their candidate goes around claiming that he would suspend gas taxes nopw to improve the economy if we elect him later.

Just how stupid do they think we are?

[marsha]

We as a nation should stop subsidizing the highly inefficient car culture through expanded highways. Certainly we need transportation infrastructure to handle modern commerce flow (fix those bridges, subsidize rail-truck links), but most large scale projects originate from urban gridlock. The age of the single passenger commuter should end now, but Americans are still under the selfish perspective that we have the right to drive our own car whenever and however much we want. If more of the highways were toll based, that would quickly change.

[WmB]

Iraq spending is 720million a day, not 10 billion as someone stated. I guess they wanted to scare people so they just threw out a high number.

4.4 billion for the States. I don't blame Bush, Congress spends the money in approprations and Bush just signs or not. If he doesn't sign then he gets blamed for not supporting the projects that are needed in the bills, if he does sign the bills always has a multitude of wasted spending. That is what Congress does for us. The states are all to willing to grab a bigger piece of the pie.

I wonder how much spending has increased in the last few years on this issue? Iraq war aside we'd still be in bad shape, becuase Congress wastes so much.