DALLAS — President Obama on Friday signed the 10-month, $10.8 billion bailout bill that extends the solvency of the Highway Trust Fund to keep federal highway and transit dollars flowing to the states through May 2015.
The president affixed his signature without an official ceremony Aug. 8 to the measure that keeps the fund functioning by avoiding a low cash balance that threatened timely and complete reimbursements to states for highway projects. The short-term fix is expected to keep the cash balance in the highway fund through May 31 above the $4 billion threshold that would trigger a funding slowdown.
Transportation Secretary Anthony Foxx notified state transportation departments last week that reimbursements will continue without interruption for a few months.
Hope has not completely evaporated for a long-term funding bill before the end of 2014 despite the mid-2015 deadline, Foxx said.
"There is no reason Congress cannot act on a long-term solution this year," he said. "Our transportation infrastructure is too essential to suffer continued neglect, and I hope Congress uses this opportunity productively."
The May 31 deadline could put reimbursements from the highway fund in jeopardy again during the height of the construction season, Foxx said. If so, he said, the deferred curtailment cash management procedures would be revived.
"This is the 10th surface transportation extension, on top of 18 temporary budget measures, in the last six years," Foxx said. "There is still no long-term certainty."
The Senate adopted the House version of the temporary patch July 31 after the House rejected its plan for an $8.2 billion bailout to keep the fund solvent through the end of 2014. A drafting error in the Senate measure would have resulted in $2 billion less revenue than expected, the Congressional Budget Office said.
Rep. Bill Shuster, R-Pa., chairman of the House Transportation and Infrastructure Committee, said the Senate's earlier deadline would have required quick passage by Congress of a long-term funding bill during a short lame duck session after the November elections.
"A shorter extension would guarantee a manufactured crisis in December when some might be inclined to play politics with these issues or use them as vehicles for unrelated policies that should be subject to the full and open debate they deserve," he said.
Shuster said a multiyear highway bill "remains a top priority."
Shuster and Rep. David Camp, R-Mich., chairman of the House Ways and Means Committee, co-sponsored the bailout bill.
The fund bailout is accomplished with a $1 billion transfer from the Leaking Underground Storage Tank Fund into the highway fund, and $9.8 billion from the general fund.
The general fund transfer will be offset over the next 10 years with $3.5 billion from a one-year extension of some custom user fees that were to expire in 2023 and more than $6 billion in higher corporate income tax collections by allowing companies to reduce pension plan payments.
