Testimony by Kim P. Cawley, Chief, Natural and Physical Resources Cost Estimates Unit, before the Subcommittee on Highways and Transit, Committee on Transportation and Infrastructure, U.S. House of Representatives
This testimony discusses CBO’s projections of future spending from the Highway Trust Fund and the agency’s estimates of the revenues that will be generated by excise taxes and credited to the fund. According to CBO’s estimates, the revenues derived from existing excise taxes will fall far short of covering the spending that would result from continuing to obligate funds in the amounts provided for 2013, as adjusted for inflation.
The testimony makes three points:
- The current trajectory of the Highway Trust Fund is unsustainable. Starting in fiscal year 2015, the trust fund will have insufficient resources to meet all of its obligations, resulting in steadily accumulating shortfalls.
- Since 2008, the Congress has avoided such shortfalls by transferring $41 billion from the general fund of the Treasury to the Highway Trust Fund. The Congress has enacted an additional transfer of $12.6 billion that is scheduled to occur in 2014. If lawmakers chose to continue authorizing such transfers, they would have to transfer an additional $15 billion in 2015 and increasing amounts in subsequent years to prevent future shortfalls, if spending was maintained at the 2013 level, as adjusted for inflation.
- Lawmakers could also address the projected annual shortfalls by substantially reducing spending for surface transportation programs, by boosting revenues, or by adopting some combination of the two approaches. Bringing the trust fund into balance in 2015 would require entirely eliminating the authority in that year to obligate funds (projected to be about $51 billion), raising the taxes on motor fuels by about 10 cents per gallon, or undertaking some combination of those approaches.