Bipartisan Senate infrastructure bill includes $118 billion bailout for Highway Trust Fund
The bill also includes a pilot program for a national vehicle miles traveled (VMT) tax.
The bipartisan Senate infrastructure bill includes a $118 billion bailout for the Highway Trust Fund, which is currently funded primarily through federal taxes on gas and diesel fuel.
The latest version of the legislation does not specify a revenue source to fully cover the $118 billion that would be transferred to the fund if the bill is signed into law.
According to the "further transfers to the trust fund" section of the bill, "out of money in the Treasury not otherwise appropriated, there is hereby appropriated" $90 billion to the Highway Account and $28 billion to the Mass Transit Account in the Highway Trust Fund, for a combined total of $118 billion.
According to the Congressional Budget Office, "the federal government's surface transportation programs are financed mostly through the Highway Trust Fund, an accounting mechanism in the federal budget that comprises two separate accounts, one for highways and one for mass transit." Revenue for the trust fund is derived mainly from federal taxes on gasoline and diesel fuel.
"The $118 billion bailout of the Highway Trust Fund is coming from the Treasury general fund ... and does not have a dedicated offset in the bill," Garrett Watson, senior policy analyst at the Tax Foundation, told Just the News. "Because the bill has only ~$200B in scoreable offsets, it's safe to say that this would effectively be borrowing and then transferring to the trust fund."
The office of Texas Republican Sen. Ted Cruz blasted the bill for its level of new spending.
“This bill is bloated with spending we cannot afford full of budget gimmicks to conceal the real cost to the American people and fails to prioritize spending to address critical infrastructure," said a spokesperson for Cruz. "Even as this bill bails out the Highway Trust Fund it does nothing to fix the inconsistencies of the methods used to distribute the money which shortchanges Texas year after year. It is nothing more than a down payment for a liberal wish list.”
The infrastructure bill also includes a pilot program for a vehicle miles traveled (VMT) system that would tax drivers for the miles they drive as a potential future source of revenue for the Highway Trust Fund.
According to the Tax Policy Center, "a tax on vehicle miles driven would provide a more direct link to the cost of highway use but, unlike an increase in the tax on motor fuels, would be difficult to implement, requiring new tolls or electronic motoring of vehicles."
The organization also concluded that a VMT tax would not "provide an incentive for driving more fuel-efficient vehicles."
Some senators have argued that a VMT tax system would not fix the Highway Trust Fund.