Senator Calls Plan to Shore Up Highway Fund by Ending Saturday Mail Delivery a 'Nonstarter'

Members of the Senate Finance Committee will meet behind closed doors Wednesday to try to find a way to prevent the Highway Trust Fund from going broke at the height of the construction season this summer.

The panel's session comes on the heels of a House Republican proposal to shore up the highway fund for a year by allowing the U.S. Postal Service to end Saturday deliveries and putting the savings into infrastructure projects—a plan ridiculed and dismissed by two Senate committee leaders.

"Strange" and "unworkable" was the response of Senate Environment and Public Works Committee Chairwoman Barbara Boxer, D-Calif. "This idea is a jobs killer which does not even fund the Highway Trust Fund for a long enough period of time to provide the certainty that states, cities, and businesses need."

Senate Homeland Security and Governmental Affairs Chairman Thomas Carper, D-Del., called the House GOP idea "a nonstarter" that "kicks the can down the road yet again on resolving two issues—fixing the Postal Service and the trust fund."

But neither Boxer nor Carper offered an alternative plan for rescuing the highway fund, which will reach a zero balance by late July or early August without a significant infusion of cash.

Boxer, in her response to the House plan, did mention that her committee had done its job—a reference to its approval in May of a six-year transportation bill that would keep federal spending on highways and mass transit at current levels. But that bill did not directly address the looming Highway Trust Fund shortfall, or how to replenish it.

That issue is being left for the Senate Finance Committee to resolve, and it is that panel's chairman, Ron Wyden of Oregon, who has called for Wednesday afternoon's meeting of panel members from both parties, without staffers present. The private session will be to "discuss proposals and direction for the Highway Trust Fund," said Wyden spokeswoman Lindsey Held. "More to share after that discussion."

Time is running out. Thousands of highway and bridge projects and hundreds of thousands of jobs could grind to a halt in two to three months unless a solution is found to keep the fund's balance above zero.

In a memo Friday to rank-and-file House Republicans, Speaker John Boehner and other GOP leaders floated the idea of stopping most Saturday mail deliveries—except for such things as packages, medicine, and priority or express mail. That would lead to an estimated $10.7 billion in savings over 10 years that could be used as an offset to a general-fund transfer to keep the trust fund running through May 2015, the Republicans said. The short-term fix would also allow time for a longer-term solution to the highway fund's stability.

The dilemma stems from the fact that 90 percent of the fund's revenue comes from the 18.4-cents-per-gallon federal tax on gasoline and the 24.4-cents-per-gallon tax on diesel, neither of which has been increased since 1993. Over that 21-year period, motor-vehicle fuel efficiency has increased significantly—meaning motorists are using far less fuel—and the fund has not kept pace with rising construction costs. In fact, lawmakers have transferred $54 billion to the highway fund from the general fund since 2008 in order to meet its obligations.

Nevertheless, House Majority Leader Eric Cantor and other Republicans have shut the door on the idea of raising the gasoline tax or raising tolls during this midterm election year. And an overhaul of the nation's tax code, which might have included a dedicated stream to fully fund road projects, has also been put on hold until at least next year.

Wyden, too, has questioned adding new tolls on existing roads or charging motorists based on the miles they drive, saying those proposals raise questions about privacy and feasibility. He also says temporary fixes or emergency patches are not the answer, either, and that it will take up to $100 billion just to keep the trust fund solvent for the next six years.

One idea that Wyden has talked about is resurrecting the Build America Bonds program, which was part of the stimulus strategy in 2009. By the time the program ended after two years, Wyden said at a hearing last month, it had helped finance more than $180 billion worth of projects from one end of America to the other.

"The lesson is clear: There are hundreds of billions of dollars in private capital sitting on the American sidelines. Surely some of that can be invested in American infrastructure," he said.