U.S. to Reduce and Delay Highway Funding Beginning in August

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from The Wall Street Journal,

Transportation Department Acts as Trust Fund Dwindles Amid Congressional Impasse.

An aerial view of a highway under construction in Indiana

Federal funding for repairing bridges and highways will be reduced or delayed starting in August, and the restrictions will last until Congress reworks financing for the Highway Trust Fund, Transportation Secretary Anthony Foxx said Tuesday.

Mr. Foxx said in letters sent to all 50 states that the dwindling trust fund made the funding cuts necessary. States are typically reimbursed immediately for certain transportation projects, but the new restrictions will direct money to states just twice a month.

The administration’s warnings come as the White House is trying to turn up pressure on Congress to boost funding for the federal fund, whose balance is expected to dwindle to zero next month from $8 billion at the end of May.

Many Democrats and Republicans say they want to continue funding highway projects, but they differ widely on how to finance new spending.

Mr. Foxx estimated that “on average, states will see a 28% drop in federal transportation dollars.” The White House says roughly 112,000 road projects are financed by the fund, and delays could impact construction around the country.

The Congressional Budget Office estimated that the fund will bring in $33 billion in revenue this year and spend $45 billion, mostly in disbursements to states.

The government spends more money on transportation projects than it collects through the 18.4-cent-per-gallon gas tax, which is the primary reason for the big deficit.

The White House has called for a roughly $300 billion, four-year plan to fund infrastructure projects, which would be financed largely through an overhaul of the tax code. That proposal has fallen flat, and now Democrats and Republicans on Capitol Hill are looking to patch together a temporary measure that would fund highway projects through the end of the year.

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