Obama Set to OK Bill Giving $7B to Highway Trust Fund

WASHINGTON - President Obama is expected to soon sign a bill to provide the federal highway trust fund with $7 billion of extra cash, which would keep money flowing to states for transportation projects while lawmakers settle their dispute over an 18-month extension to the current law that expires Sept. 30.

At the same time, the Government Accountability Office has found that about $78 billion of a total of $243 billion that was taken from the highway trust fund between 2004 and 2008 was used for purposes other than construction and maintenance of highways and bridges.

The highway trust fund rescue bill, which would transfer $7 billion of general funds into the trust fund, was approved Thursday by the Senate and Wednesday by the House.

The approval came two days after Federal Highway Administrator Victor Mendez warned state highway officials can expect less-frequent payments from the federal government for road and bridge repairs if the trust fund's shortfall is not addressed.

Lawmakers said the rescue bill should keep the fund solvent through the end of the fiscal year, when the federal transportation law expires.

However, Obama administration officials and lawmakers in the Senate have said the law will need to be extended another 18 months - into the spring of 2011 - before a replacement can be approved. They have estimated the trust fund could require as much as $20 billion in order to stay solvent for the duration of that extension.

Meanwhile, the GAO last week announced that $78 billion of federal highway trust fund money was spent on non-highway and non-bridge capital investments between fiscal years 2004 and 2008.

The calculations were provided in a report sent to Sen. John McCain of Arizona, the ranking Republican on the Homeland Security Committee's financial management panel, and Republican Sen. Tom Coburn of Oklahoma.

Between 2004 and 2008, the Federal Highway Administration spent about $24.2 billion in trust fund money for safety, planning, research, traffic management engineering, ferryboats, and training, according to the GAO.

The GAO found that about $2 billion of trust fund money paid for pedestrian and bicycle facilities, and $3.1 billion paid for state and metropolitan planning.

The Safe, Accountable, Flexible, Efficient Transportation Equity Act: a Legacy for Users, or SAFETEA-LU, which expires next month, allows for spending on projects outside of the construction or maintenance of bridges and highways. It permits state and local governments to spend money on metropolitan planning, transit, trails and bicycle lanes, and pedestrian walkways, among other things. However, opponents of the current system have argued that gasoline tax revenue should be spent only on highway and bridge needs.

The law authorized $244.1 billion over five years for highways, highway safety, and public transportation. The trust fund, which gets most of its revenues from fuel taxes and truck-related taxes, is the funding source for most of the programs authorized by the law. State transportation departments can spend a certain amount, then submit reimbursement requests that will be fulfilled by the trust fund.

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