One day before Congress broke for summer vacation, during which the Highway Trust Fund would have run out of money it owes to road, bridge, and transit projects under construction, President Obama signed the first extension of Moving Ahead for Progress in the 21st Century (MAP-21).
In July 2012, that surface transportation funding package provided $105 billion through Sept. 30, 2014. That means Congress and the White House had just two years to resolve thorny issues—raise the federal fuel tax for the first time in two decades and remove Washington entirely from the funding formula—their predecessors couldn’t resolve in six.
Instead, the Senate agreed to an $11 billion House proposal, to keep the Highway Trust Fund solvent until June 2015.
Like past emergency extensions enacted as Washington argued over how to fund the nation’s transportation network, the money’s being transferred from the U.S. Treasury: $7.765 billion for highways and $2 billion for mass transit. Highways are also getting $1 billion from the Leaking Underground Storage Tank Trust Fund.
Remember the fight over the federal deficit? The result was that lawmakers must have a plan to pay back the $10.765 billion:
- $6.3 billion will come from “pension smoothing,” an accounting practice (some would say gimmick) that lets companies contribute less to pension plans so they’ll be able to report higher taxes, which is then earmarked for roads and bridges. As far as anyone can tell me, this provision doesn’t apply to public pension plans.
- The rest will come from customs fee increases.
Both mechanisms were used to fund MAP-21.