Article

An $8 Billion Fiasco

It shouldn't have taken a cash shortfall for the Highway Fund to be repaid.

October 2008, TruckingInfo.com - Editorial

by Doug Condra, President

SHARING TOOLS        | Print Subscribe

So the Highway Trust Fund got its $8.017 billion worth of fuel tax monies back from the U.S. Treasury. Highway construction projects can now go on, and workers can be paid - which wouldn't have been the case had the funds not been forthcoming.

Until Congress and the president acted in mid-September, the situation was tense. It need not have been. Three years ago, the Department of Transportation warned that highway funding was headed for trouble because revenues were not keeping up with construction costs.

That should have surprised no one in Congress. While it's been 15 years since a federal fuel tax increase, spending of fuel tax revenue has been steadily and rapidly accelerating.

But nothing was done until the highway coffers were nearly empty.

Why, back in 1998, did Congress take the money from the Highway Fund in the first place? Simple: Treasury needed money and the highways had some extra. So the politicians - acting legally - moved $8.017 billion from highways to the general fund.

Was it a loan? That's not clear in anything we've heard. If it was a loan, it apparently was interest-free, with no repayment schedule. How fair is that?

Whatever it was, it took a fight between Congress and the White House to get the money back from Treasury. Some called it a highway bailout. It wasn't; it was a payback of money due the fund, plain and simple.

Before things were resolved, the possibilities were troubling. The administration and some Congressmen wanted to take the money from the Mass Transit Account, whose funding also comes from Highway Trust Fund fuel taxes.

That would've set up this convoluted scenario: The Highway Fund would owe the Transit Account $8.017 billion, but couldn't pay it back because Treasury wouldn't pay back the $8.017 billion it owed the Highway Fund.

Short version: We rob Peter to pay Paul, then rob John to pay Peter. Who's next?

Sen. James Inhofe (R-Okla.) said taking the money from the Highway Fund to begin with was "morally wrong." He added: "The uncertainty over the federal government's ability to fulfill promises made in law substantially disrupts states' highway programs."

We think he's referring to "trust," as in "trust fund," which is defined as a legal entity that holds assets for the benefit of a specific person, group, or organization.

In other words, a trust is supposed to be burglar- proof. Obviously, ours isn't. Not when the burglars have political license.

E-mail Doug Condra at dcondra@truckinginfo.com, or write P.O. Box W, Newport Beach, CA 92658.


Comment On This Story

Name:  
Email:  
Comment: (Maximum 2000 characters)  
Leave this field empty:
* Please note that every comment is moderated.

Newsletter

We offer e-newsletters that deliver targeted news and information for the entire fleet industry.



GotQuestions?

LUBRICANTS

The expert, Mark Betner from Citgo will answer your questions
Ask a question

Sponsored by

Magazine