The Congressional Budget Office (CBO) said Thursday that the Department of Transportation’s Highway Trust Fund will not have enough money under President Obama’s proposed 2015 budget, despite an infusion of cash that has been suggested by the president.
Obama has called for Congress to approve a four-year, $302 billion surface transportation bill before the federal government’s current road and transit funding measure expires in September. The money would be used to plug a hole in the Highway Trust Fund, which is normally used to pay for federal transportation projects.
But the CBO said Thursday that Obama’s budget would still leave the Highway Trust Fund with a shortfall because the Transportation Department needs to have at least $4 billion in the account to keep pace with infrastructure obligations.
“Under current law, the Highway Trust Fund cannot incur negative balances and has no authority to borrow additional funds,” the CBO analysis continued. “However, following the rules in the Deficit Control Act of 1985, CBO’s baseline for highway spending incorporates the assumption that obligations incurred by the Highway Trust Fund will be paid in full. The cumulative shortfalls shown in this table are estimated on the basis of spending consistent with the obligation limitations contained in CBO’s reestimate of the President’s FY 2015 proposals for surface transportation.”
The CBO has said previously that the Highway Trust Fund will go bankrupt as early as August without congressional action.
The trust fund is normally filled with revenue that is collected from the 18.4-cents-per-gallon federal gas tax, but infrastructure expenses have outpaced receipts in recent years by as much as $20 billion because the gas tax has remained stagnant since 1993.
The budgetary analysis agency has said it will take an extra $100 billion in addition to the approximately $34 billion per year that is expected to be brought in by the gas tax.
The CBO said Thursday that it needed more clarification about Obama’s tax reform proposals to accurately assess its potential impact on transportation funding.