Uncover the government program right in front of you that might run out of funds and affect your future.
It's no secret that some major government progra
ms, like Social Security and Medicare, are facing serious financial challenges. However, there's a third federal trust fund that's also in dire straits – the Highway Trust Fund.
The Highway Trust Fund is crucial for funding the federal government's surface transportation programs, covering both highways and mass transit. Most of its revenue comes from the federal gas tax, currently at 18.4 cents per gallon, with additional funds from other transportation-related taxes and fees.
Unfortunately, the Highway Trust Fund is in significant trouble. The Committee for a Responsible Federal Budget, a nonpartisan organization, predicts that, if things don't change, the fund will run out of money by 2028. The federal government is even more pessimistic, identifying 2027 as the critical year.
How did this happen? Over the past two decades, federal spending on transportation projects has exceeded the revenues flowing into the fund, according to the Committee for a Responsible Federal Budget. The gas tax, a primary source of income for the fund, hasn't kept up with inflation and hasn't been raised since 1993. Additionally, the growing popularity of fuel-efficient cars, while environmentally friendly, has reduced the revenue from gas taxes as drivers need to fill up less often.
Lawmakers have been scrambling to cope with these challenges by transferring funds from general revenues into the Highway Trust Fund. However, these quick fixes haven't tackled the fundamental issue – the fund requires a more sustainable source of ongoing revenue.
Despite the Infrastructure Investment and Jobs Act of 2021 injecting additional funds to delay the Highway Trust Fund's insolvency, it also authorized increased spending on highways and transit. This move is likely to exacerbate the long-term funding gap instead of narrowing it.
The Committee for a Responsible Federal Budget has proposed ten strategies to solidify the Highway Trust Fund. These options range from a substantial 15-cent increase in the gas tax (almost doubling the current rate) to freezing highway spending or cutting federal transit spending by half.
Regardless of the chosen approach, decisive action is needed urgently. The committee emphasizes that policymakers must initiate discussions on potential solutions for the trust fund without delay.
While saving money at the gas pump might not bode well for the Highway Trust Fund, it certainly benefits your wallet.
