One of the biggest challenges facing Congress in the reauthorization process is what to do about the fiscal condition of the Highway Trust Fund (HTF) which supports funding of the federal highway and transit programs. Simply stated, the HTF is on the verge of insolvency. It has both a short term and long term problem.
In the short term, the HTF will not have sufficient revenue to pay the bills through September 30 and it will go into the red sometime in August. In the long term, the HTF simply cannot support current highway and transit funding levels.
If Congress relies on existing revenues only, with no revenue increases or fund transfer, then highway and transit funding would have to be reduced by about 30 to 40 percent below current levels. Alternatively, it would take the equivalent of a 10 cent per gallon increase in motor fuels taxes to maintain current levels of funding.
Key congressional leaders recognize the need for prompt action to avoid going over the fiscal cliff. The short term problem must be addressed before Congress leaves for the August recess because a shutdown would be extremely harmful. National economic growth and our international competitiveness require a long term solution.
There is no real alternative to an increase in federal user fee revenues. Business leaders should back this action and support elected officials prepared to make the tough decisions on this critical issue.