Department of Transportation Secretary Anthony Foxx is warning lawmakers that federal transportation funding will run out this summer unless they approve a new round of road and transit spending.
Lawmakers in the Senate have begun working on a bill to provide $265 billion to pay for transportation projects for the next six years.
But Foxx said during an appearance on MSNBC’s “Rachel Maddow” show on Wednesday night that the Department of Transportation’s trust fund for road and transit projects would run out of money soon if the House did not also act on the measure.
{mosads}“We’re headed for a cliff,” Foxx said. “And as early as August of this year, the Highway Trust Fund, which funds our roads and bridges and transit systems across the country is headed towards insolvency, which means we can’t meet our obligations to state and local governments and it will slow down contracts, 700,000 jobs are at risk. It’s going to be a big deal.”
The measure that was approved on Thursday by the Senate Environment and Public Works would reauthorize the DOT’s current level of transportation funding, which is approximately $50 billion per year, to prevent the projected bankruptcy.
Lawmakers still have to figure out how to pay for the measure beyond the revenue that is collected by the federal gas tax, which is currently priced at 18.4 cents per gallon.
The gas tax has been the traditional source for paying for congressional transportation bills. The tax has not been increased since 1993 and receipts have been outpaced by infrastructure expenses by a wide margin in recent years.
The current transportation funding bill that is expiring in September includes about $50 billion in spending for road and transit projects. The gas tax only brings in approximately $34 billion per year, however.
The Congressional Budget Office has projected that lawmakers will have to find an extra $100 billion in addition to the gas tax revenue to pay for a new six-year transportation bill, which is the length that is now being sought by lawmakers in the Senate.
The Obama administration has proposed that lawmakers use $150 from a corporate tax reform proposal that is considered unlikely to become law to help pay for a new four-year, $302 billion transportation bill.
Obama’s proposal would increase federal transportation funding by about $25 billion per year, taking road and transit spending from the current level of about $50 billion annually to approximately $75 billion per year.
Foxx said during his MSNBC appearance that “only Congress can solve this problem.”