Foxx: Highway Cuts Coming Aug. 1 Unless Congress Acts

Because lawmakers have not acted to replenish the dwindling Highway Trust Fund, states will soon face a 28 percent cut in federal funding for repairs to roads and bridges, warned Transportation Secretary Anthony Foxx on Tuesday.

"These cash-management procedures will begin on Aug. 1, 2014, for programs funded out of the Highway Account, with states receiving notification of their first proportional share on Aug. 11, 2014," writes Foxx in his letter to transportation officials in all 50 states.

However, in a blog on the department's website that accompanied the letter's announcement, Foxx also writes, "The good news, at least, is that Congress can still choose to act when they return from recess."

Foxx is referring to what the Obama administration hopes will be lawmakers' efforts starting next week to find more money for the fund, which is projected be exhausted by Sept. 30. An 18.4 cent gas tax and other fuel taxes have financed the fund, but those have not been keeping up with inflation and the amount and costs of the projects it has been financing.

Foxx's letter Tuesday is an effort by the administration to turn up the heat on lawmakers to find some additional money. It tells state officials that unless a resolution is found, a new "cash management plan" will be put in place at the start of August.

"Under the new plan, we'll use the same percentage each state is assigned annually to determine how much they'll receive of whatever is left in the fund," writes Foxx. But he adds that states will not be paid their percentage as they send in their bills, and, instead, "every two weeks as money from the gas tax trickles into the fund."

"On average, states will see a 28 percent drop in federal transportation dollars. Depending on how they manage the funds, each state will feel the effects differently, but everyone will feel the impact sooner or later," he writes.

The administration has projected that delays could hit hundreds of road projects around the country and impact thousands of jobs.

Foxx's letter goes on to say that in the event that the shortfall continues into the fall, the Mass Transit Account will also reach a critical point. "Should that occur, the Department will be providing specific guidance on the Federal Transit Administration's approach in managing the resources available to transit agencies," states Foxx's letter.

But in his blog item, Foxx reiterates of the lawmakers, "They still have some time."

In the meantime, some conservative groups and Republican lawmakers are seizing on the funding shortfall as an opportunity to reopen a policy debate over the fund itself. And they are downplaying the dire warnings of not moving quickly to replenish the fund as is while they engage in that debate.

In fact, many conservatives say it is time for Congress to consider "evolving" the federal government out of some transportation decisions and to give more authority to the states. They point to legislation—such as a measure introduced by Sen. Mike Lee, R-Utah, and Rep. Tom Graves, R-Ga.—that would phase out the federal gasoline gas and turn over most of the federal transportation program to statehouses.

But in a statement on Tuesday, Senate Budget Committee Chairman Patty Murray chimed in on what she said is a clock "winding down for Congress to avoid lurching toward another unnecessary crisis—this time with a construction shutdown."

"Workers and businesses shouldn't have to pay the price for another manufactured crisis out of Washington, D.C.—so I hope Republicans find a way to push the tea party aside and avoid this crisis," said Murray. "Republicans have refused to work with us this year on immigration reform and other policies that would create jobs, but hopefully they can at least work with us to prevent jobs from actively being destroyed."

Later Tuesday, President Obama was to speak at the front of the Key Bridge in Washington to push for a plan to replenish the highway fund.