DALLAS -- Warnings from President Obama and congressional Democrats that federal transportation funding is about to dry up are a scare tactic aimed at raising taxes, a conservative group said.
Dan Holler, communications director for Heritage Action, said that fears of massive job losses and project shutdowns if federal transportation spending is curtailed are exaggerated.
"America is not facing 'a transportation government shutdown' and lawmakers should stop trying to create an artificial crisis which they can use as an excuse to raise taxes or increase spending," Holler said in a blog posting on the group's web site.
Holler discounted Transportation Secretary Anthony Foxx's warning to state transportation directors that federal transportation dollars will be chopped by 28% on Aug. 1 if the cash balance in the Highway Trust Fund drops to $4 billion later this month as projected. Foxx's statement is "shockingly misleading," he said, because most transportation spending is funded by state and local governments.
Citing a report earlier this year from the Congressional Budget Office, Holler said governments at all levels in 2013 spent $156 billion on highway projects and another $60 billion on transit systems. Only a quarter of the nation's total transportation expenditures came from the federal government through the Highway Trust Fund, he said.
"The 28% reduction Foxx mentioned is of the federal share, which is about 25%," Holler said. "In other words, the 'crisis' Obama is warning Americans about is a 7% reduction in total spending."
President Obama said in a July 1 address on the economy that the looming insolvency of the Highway Trust Fund puts in danger some 700,000 construction jobs and more than 100,000 on-going projects. Some states have put highway projects on hold because of the weakness of the highway fund, he said, and others will do so over the next few weeks.
The CBO said in mid-June that new transportation projects cannot be funded in fiscal 2015 unless lawmakers provide additional revenue to bolster collections from dedicated federal fuels taxes.
Gasoline and diesel taxes currently generate about $35 billion a year, while expenditures have totaled more than $50 billion a year under the current two-year highway bill, Moving Ahead for Progress in the 21st Century or MAP-21, which expires Sept. 30.
Sen. Barbara Boxer, D-Calif., chairman of the Senate Environment and Public Works Committee, said July 3 that all federal highway funding will cease Oct. 1 unless Congress renews or extends MAP-21.
"This looming transportation shutdown demands immediate action in Congress," Boxer said. "Everyone knows that we must act because our surface transportation system is in critical condition and significant funding is needed to simply maintain the current system."
Senate Budget Committee Chairman Patty Murray, D-Wash., said quick action is needed to fix the Highway Trust Fund.
"The clock is winding down for Congress to avoid lurching toward another unnecessary crisis, this time with a construction shutdown," Murray said. "I hope Republicans find a way to push the Tea Party aside and avoid this crisis."
Aides to Sen. Ron Wyden, D-Ore., chairman of the Senate Finance Committee, and Sen. Orrin Hatch, R-Utah, the ranking Republican member of the committee, conferred with their counterparts from the House Ways and Means Committee over the congressional holiday recess on a short-term fix for the Highway Trust Fund.
Both committees are slated to meet this week.
Wyden has proposed an $8 billion patch, using enhanced revenues from existing sources, to keep the fund solvent through January 2015.
"I see growing interest among members in terms of taking care of the short term, which is essentially the six months, and then trying to find a way to use that six months as a spring board to a broader set of reforms," Wyden said.
