President Obama and his advisers will travel the country this week to build support for a large-scale highway and bridge spending program. But Congress is in no mood to cooperate. Meanwhile, the Highway Trust Fund -- which supplies money for infrastructure building and maintenance -- is on track to run out of money next month. Democrats and Republicans are at loggerheads over how to fund federal highway spending programs (the trust fund gets its money from gas taxes) and neither party wants to raise taxes during an election year.
Governors from both parties are convening this week to urge Congressional lawmakers to increase the federal gas tax as a way to raise funds for the soon-to-be depleted Trust Fund. Fuel tax revenues have supported the Trust Fund since its inception in 1956. The gas tax, which has been unchanged since 1993, stands at 18.4 cents a gallon; the diesel tax is 24.4 cents a gallon. Governors are also proposing that electric and fuel-efficient vehicles be included in any solution.
"Congress doesn't want to do what it really takes to fix this thing which is raise the federal gas tax," notes Yahoo Finance's Rick Newman. Functioning roads and bridges "are the hallmarks of a functioning 21st century economy."
Fixing the nation's decaying infrastructure is a "capital intensive project that takes a lot of time and planning," he adds. "We're in a situation where Congress doesn't want to give President Obama anything he wants....it's a perennial problem we're stuck with."
Senators Ron Wyden and Orrin Hatch have put forth a $10.8 billion bill that would extend federal transportation spending through summer 2015. Congress will have to decide on a short-term path or a larger package before the summer recess starts Aug. 1.
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