U.S. seeks $8 billion from Congress for highway funding
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WASHINGTON (Reuters) - The Bush administration on Friday sought $8 billion immediately from Congress to close a fast growing shortfall in tax receipts used to reimburse states for highway construction projects.
Transportation planners also intend to extend the timeframe for reimbursements, an unprecedented step, to ease the cash flow problem.
The funding gap reflects a precipitous drop in revenue from fuel taxes as motorists drive less because of sharply higher gasoline prices and a sluggish economy.
Pressure on federal coffers has worsened over the past few months with the construction season hitting its summer peak. In September, the trust fund dedicated to highway spending will take in $2.7 billion in tax receipts but face reimbursement requests of $4.4 billion.
"We can't write checks if we don't have money in the account," Peters told reporters.
Transportation officials have not requested that states cancel projects outright to save money but they have begun to slow work on some of them.
Peters said her agency will next week begin to stretch payments to states, from daily to weekly. States may only be partly reimbursed at first, she said.
Peters has long ruled out a hike in fuel taxes to cover the current shortfall, and did so again on Friday. She said gas taxes alone have worked for 50 years but are outdated with consumers driving less and moving more aggressively toward vehicles that run on alternative fuels.
Federal fuel taxes have not gone up since the early 1990s. The gasoline tax stands at 18.4 cents per gallon.
Peters urged immediate action on her request once Congress returns next week from its August break. The U.S. House of Representatives approved a measure before the recess that included $8 billion for highway projects. The Senate took no corresponding action.
The Bush administration opposed the measure as late as July because it would tap general tax receipts. The policy reversal by transportation planners was triggered by the faster-than-expected decline in fuel tax receipts since spring.
(Reporting by John Crawley; editing by John Wallace, Richard Chang)
