The Highway Trust Fund -- the primary account used to fund federal spending on roads, highways and transit -- is set to go broke over the course of the next two years, according to the Congressional Budget Office's newest forecast released today.
CBO explains the trust fund's challenges succinctly:
Although the number of miles that people drive is projected to increase as the economy grows, CBO expects the effect of that increase on fuel use to be largely offset by improvements in the fuel economy of vehicles, mainly because of increases in the government’s fuel economy standards.
The trust fund actually has two accounts: one that pays for highways and highway programs, and one that pays for transit.
The new report finds that sometime during 2013, the highway account will no longer be able to meet its obligations. The same will happen to the transit account in 2014.
The current federal gas tax of 18.4 cents per gallon of gasoline isn't tied to inflation and hasn't been increased since 1993. As a result, its purchasing power has declined dramatically. Yet members of Congress on both sides of the aisle, as well as President Obama, have opposed any proposals to increase the gas tax to help shore up the fund.
The CBO based its assumptions that future transportation spending will equal 2012 levels, accounting for inflation.
The news doesn't come as surprise, and it has dominated the debate about re-authorization of the surface transportation bill which expired more than two years ago.
The Senate is pursing a plan for a two-year, $109 billion bill, which amounts to level funding. But senators still need to figure out how to fund another $12 billion hole.
The House is expected to unveil a 5-year, $260 billion bill that also faces a funding gap that lawmakers would close by expanding energy exploration.
The two pieces of legislation have major differences that may be too difficult for a highly-partisan Congress to overcome in an election year.
Regardless of how the debate plays out, general funds may be needed to shore up the Highway Trust Fund yet again.
From 2008 to 2010, the trust fund received transfers from the Treasury -- essentially, a bailout -- of $35 billion to keep it from becoming exhausted.