Keeping the Highway Trust Fund Solvent
15th April 2021
When Congress agreed to finance the Interstate Highway System in 1956 by dedicating taxes on gasoline, tires, autos, and trucks to a Highway Trust Fund, it also adopted a policy of not spending more from the fund that was actually collected in highway fees into that fund. This delayed completion of the interstate highways because inflation increased costs without increasing gas taxes and other revenues, but it ensured that the fund remained solvent.
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That is no longer the case, and today Congress spends about $14 billion more per year out of the fund than it collects in highway user fees. Yesterday, the Senate Environment and Public Works Committee held a hearing on the “long-term solvency of the highway trust fund.” Most of the witnesses at the hearing spoke about problems with gasoline taxes and why they should be replaced with mileage-based user fees.
That’s all well and good, but everyone seems to have lost sight of why the trust fund is insolvent. It isn’t, as asserted by one of the speakers (whose testimony was otherwise fine), because of “revenue shortfalls.” Instead, it was because of Congressional overspending.