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Congress May Consider Smaller Highway Bill

Some of the latest news about a potential highway bill is not necessarily good, although perhaps any bill is better than no bill at all. Or perhaps not. From The Wall Street Journal there is an article stating that Senate Finance Committee Chairman Max Baucus is saying that Congress may have to consider a smaller highway-funding bill than initially planned because of a steep drop in revenue from the federal gasoline tax.

Speaking at a hearing a week and a half ago on highway funding, the Montana Democrat said Congress may have to draft a funding bill covering two years instead of six, which effectively would freeze highway-funding construction at existing levels or lead to a decline. States and transportation lobbyists say a drop in funding and the uncertainty of future federal funding levels could further hurt states and the construction industry. Baucus said without action, federal aid to states for highway projects would fall to about $28 billion a year from about $42 billion currently. The drop could occur as early as 2014.

The article notes that the Obama administration has called for a six-year $556 billion transportation bills to create jobs and spur the economy. But falling gas-tax revenue, the main source of highway funding, would leave a hole exceeding $200 billion in that plan, analysts project. Lawmakers haven’t reached a consensus on how to plug the gap. The president and Congressional leaders have rejected increasing the 18.4-cent federal tax on a gallon of gas.

Highway Funding Is at Risk

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