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Mar. 03, 2014

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GOVERNMENT WATCH INTERNATIONAL | WASHINGTON | CUSTOMS | SECURITY | REGULATION 18 THE JOURNAL OF COMMERCE MARCH 3.2014 THE U.S. GOVERNMENT will likely have to inject money into the Highway Trust Fund to keep highway, bridge and road construc- tion from grinding to a halt in August. For shippers and transportation pro- viders, the alternative of allowing the HTF, the main engine of surface transportation infrastructure funding, to become insol- vent would make it harder to deliver goods speedily and reliably. The economy also would take a hit if the HTF coffers dried up, with hundreds of thousands of workers los- ing their jobs because some 12,000 projects no longer would receive federal aid, Pete Ruane, president and CEO of the American Road and Transportation Builders Associa- tion, told Congress in February. The HTF faces a $172 billion shortfall over the next decade, according to federal estimates. More than $52 billion in gen - eral fund dollars have been used to plug HTF shortfalls since 2008, and Congress has signaled it doesn't want to keep filling that pothole. But what other choice does it have? Injecting money into the HTF again isn't much of a choice either. Funding levels still might fall, and the injection would give Congress more time to dither. "Let me be clear, the pending Highway Trust Fund shortfall needs to be addressed by an infusion of funds, otherwise (the Congressional Budget Office) estimates that obligations for new projects in 2015 would need to be reduced to zero," said Sen. Barbara Boxer, D-Calif., chair of the Envi- ronment and Public Works Committee. Boxer said she wants the committee to consider a new surface transportation bill in April, but the legislation won't address funding. The current bill, known as Mov - ing Ahead for Progress in the 21st Century, or MAP-21, expires at the end of September. The bill provided approximately $109 billion in funding for slightly more than two years. Boxer, who has floated the idea of replacing the fuel tax with a sales tax on oil refineries, said she already has spoken with incoming Senate Finance Chair Ron Wyden, D-Ore., about transportation funding. In the meantime, about six months remain until the HTF starts to sput- ter. That's why the business community, including the U.S. Chamber of Commerce, is urging Congress to raise the fuel tax, or even index the taxes to inflation. With many in Congress facing midterm election battles, the prospects of legislators back- ing a tax hike are scant. The chances of a transportation bill passing before Nov. 4 are "zero," former Transportation Secretary Ray LaHood said at a February event hosted by Bloomberg Government and Building for America's Future, a Washington-based pro- infrastructure coalition. Sen. David Vitter, ranking member on the Environment and Public Works Committee, said at a hearing on the economic importance of maintaining transportation infrastruc- ture spending that he's against a "net tax increase." The comments from the Louisiana Republican came after House Transportation and Infrastructure Committee Chairman Bill Shuster, R-Pa., said it wasn't economically feasible to raise the fuel tax. Transportation Department Secretary Anthony Foxx shot down the idea of rais- ing the fuel tax at a Chamber of Commerce event on Feb. 21, arguing instead that corpo- rate tax reform could rescue the HTF. The chances of an tax code overhaul are unlikely, however, particularly in an election year. By stating that it was up to Congress to dem- onstrate "political courage" in finding a funding solution, Foxx passed the funding hot potato back to Congress. A special House panel on freight transportation issued a report in late 2013 urging Foxx to outline potential funding solutions. Charging a tax on how far vehicles are driven is one revenue source, but that would take years to implement. Public-private part- nerships can help, though they stretch existing federal dollars and do not supplant them. By Mark Szakonyi HTF LIFELINE Congress is running out of time — and options — to figure out how to keep the Highway Trust Fund solvent

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