Senate Finance Committee Chair Max Baucus (D-Mont.) and ranking member Charles Grassley (R-Iowa) intend to address the Highway Trust Fund (HTF) insolvency problem with a package of revenue enhancers that will keep the trust fund from going into the red. Both the Office of Management and Budget (OMB) and the Congressional Budget Office (CBO) are projecting that revenue into the HTF will fall short by $4.3 billion in FY 2009. Federal budget rules would require a cut of nearly $16 billion in highway funding in FY 2009 if this shortfall is not remedied. The Baucus/Grassley initiative would generate the needed revenue by:
- Crediting the Highway Trust Fund for emergency expenditures paid out of the fund since 1998;
- Restructuring current fuel tax exemptions/refunds provided to state and local governments to be General Fund supported activities, instead of costs born by the HTF;
- Implementing additional mechanisms to further crack down on fuel tax evasion; and
- Transferring revenues generated from the "gas guzzler tax" from the General Fund to the Highway Trust Fund.
