HIGHWAY TRUST FUND FIX FAILS AUG 08

SESNATE TURNS THUMBS DOWN
ON HIGHWAY TRUST FUND FIX
AS BUSH ADMINISTRATION
THREATENS VETO

Aug. 1, 2008 -- On July 30, the Senate tried to take up legislation which included a provision to provide the revenue to address the projected Highway Trust Fund deficit in fiscal year 2009, and prevent a potential 34 percent cut in federal highway funds to states in FY 2009.

Congress must enact a fix to prevent all states from receiving an estimated 34 percent reduction in their states' federal highway program funding in fiscal year 2009.

But just before Congress adjourned for its August break, the Senate bill was prevented from moving forward when the 51-43 vote, on a procedural motion, failed to meet the required 60-vote support level, reports the Associated General Contractors. The vote was largely along partisan lines with a few Republican defectors voting in support but the vote had little to do with the HTF fix.

Republican Senate opposition was aimed primarily at provisions in the bill that would increase certain taxes to offset the revenue losses that would result from extending other tax provisions in the legislation into the future, AGC said.

Senate Finance Chairman Max Baucus (D-Mont.) expressed little hope of a bipartisan deal before the August recess, AGC added. Congress is preparing to adjourn for its summer recess and the lack of support for this bill is likely to put off solving the HTF crisis until September.

Previously, on July 23, by a vote of 387-37, the House approved a measure to address the projected Highway Trust Fund deficit in fiscal year 2009. The bipartisan bill, H.R. 6532, was introduced by Ways and Means Committee Chairman Charles Rangel (D-N.Y.), Transportation and Infrastructure Committee Chairman Jim Oberstar (D-Minn.), and Committee Ranking Republican John Mica (R-Fla.).

In the meantime, the president is threatening to veto the Highway Trust Fund fix. Just prior to July 23's vote in the House on HR 6532, the Bush administration issued a "Statement of Administration Policy" declaring strong opposition to the bill and threatening a veto.

Bush objects to the reimbursement of $8 billion from the general fund to the Highway Trust Fund to maintain its solvency. The margin of victory in the House (387-37), however, was strong enough to override a veto if all of the positive votes are maintained.

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