CBO has estimated the status of the Highway Trust Fund using the revenue and spending projections contained in CBO’s August 2015 baseline, which reflects the enactment of the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 (Public Law 114-41). That law transferred $8.1 billion from the general fund of the Treasury to the Highway Trust Fund. Other than accounting for that transfer, compared to the March 2015 estimates, CBO’s estimate of the status of the Highway Trust Fund in August 2015 reflects small increases in projections of revenues credited to the fund and minor changes in spending.
During fiscal year 2016, CBO projects, revenues credited to the highway and transit accounts of the Highway Trust Fund will be insufficient to meet the fund’s obligations. Under current law, the trust fund cannot incur negative balances, nor is it permitted to borrow to cover unmet obligations presented to the fund. CBO projects that the highway account will have a shortfall of $1 billion in 2016; by 2025, the cumulative shortfall will grow to $108 billion. CBO also projects that the transit account will have a shortfall of less than $1 billion in 2016, growing to a cumulative shortfall of $40 billion by 2025.
Actual spending from the Highway Trust Fund, revenues credited to the trust fund, and thus any future shortfalls could vary from CBO’s projections because of many factors, including weather-related construction delays, the responses of states and local governments to federal policies, changes in the price of motor fuels, and the price and demand for certain construction materials and labor.
The estimates of the status of the Highway Trust Fund in Table 1 reflect the assumption that the spending and revenue provisions in the Moving Ahead for Progress in the 21st Century (MAP-21) and the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 will be extended through the end of fiscal year 2025. Further, the estimates reflect an assumption that funding for programs financed by the Highway Trust Fund in subsequent years would continue at the level that the Congress provided in 2015—about $50 billion—adjusted for inflation. Those assumptions are consistent with Congressional rules governing how CBO prepares baseline projections for discretionary spending.
