Senate Finance Committee releases funding plan

News Roads & Bridges February 04, 2004
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On Jan. 29, the Senate Finance Committee unveiled its proposal to fill a more than $30 billion gap over the next six years between projected Highway Trust Fund (HTF) revenues and the $237 billion guaranteed highway investment level proposed in the Senate Environment and Public Works Committee's TEA-21 reauthorization legislation.

Over the next six years, the Finance Committee's proposal would: generate $14 billion by ensuring the HTF is fully compensated for the sale of ethanol motor fuels; capture $4 billion from strengthening motor fuel tax fraud prevention; eliminate a number of highway user-fee exemptions ($8 billion); draw down the HTF balance ($6.5 billion); restore interest on the HTF's unexpected balances ($2 billion); reform the existing mobile machinery tax exemption ($500 million); and transfer revenues from the current "gas guzzler" tax (applied to vehicles that weigh 6,000 lb) to the HTF ($500 million).

Because a number of these proposals currently generate revenues for the federal General Fund, the Finance Committee also is developing a package of revenue offsets--said to be "closing corporate tax loopholes"--to ensure the package does not increase the federal deficit. The proposal does not include a financing plan for the entire anticipated $56 billion in transit investment called for in the Senate TEA-21 reauthorization measure. The Finance Committee was scheduled to consider the proposal Feb. 2.

But as progress was being made on Capitol Hill, eight Republican senators were urging Senate Majority Leader Bill Frist (R-Tenn.) to hold off on Senate floor debate of the TEA-21 reauthorization measure until the bill's costs and deficit impacts are determined.

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