[Congressional Record Volume 148, Number 61 (Tuesday, May 14, 2002)]
[Senate]
[Page S4292]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       FEDERAL HIGHWAY TRUST FUND

  Mr. THOMAS. Mr. President, I wish to speak about a different issue 
that is very important to all of us, certainly in Wyoming where we have 
long distances to travel. As we say, we have low population and small 
towns with very long streets.
  Transportation and highways are very important to us. Highways, of 
course, have generally been funded by a combination of Federal funds 
and State funds, Federal funds being very important and continuing to 
be even more important as time goes by. What we do with State highways 
and State highway funding becomes one of the principal issues with 
which we have to deal.
  Several years ago, we had the 21st century TEA-21, which was an 
appropriation and a plan for highway funding. Last week, the Finance 
Committee held a hearing regarding the status of the highway trust 
fund. This highway trust fund, it seems to me, is terribly important 
because as a member of the Environment and Public Works Committee, I 
helped craft this Transportation Equity Act, or TEA-21, as it is 
called, which provides more dollars for the States than in the past and 
has a very good distribution system which basically allocates money to 
the States and lets them decide how those dollars are going to be 
spent.
  As we all know, TEA-21 most significantly funded the Federal highway 
needs. As a result, people across the country had opportunities to 
improve the surface transportation system to make it safer and more 
efficient and to keep up with the times.
  More importantly, as I mentioned, TEA-21 provided States and local 
governments more flexibility in controlling the use of those Federal 
funds which, frankly, is one of the issues we should deal with 
constantly; that is, in the distribution of Federal assistance, how we 
best do that so there is accountability on one hand and on the other 
hand recognize the difference that exists in various places. I am 
certain highway moneys are used for different needs in Wyoming than in 
Delaware. We need to have the flexibility to recognize those 
differences.
  The panelists who testified at this hearing on the funding 
mechanisms--that is their job; funding of the highway trust fund is 
what we rely upon. This hearing addressed a $4.4 billion shortfall in 
the highway trust fund which is due to the negative revenue alignment 
budget. Economies are somewhat lower, and these dollars are lower under 
the formula. We are in the process of trying to replace the $4.4 
billion so we do not have that loss and hopefully at least most of that 
can be done.
  In addition, however, the panelists detailed the tax disparity 
between gasoline and ethanol blend, gasohol. Currently, gasohol is 
taxed at 13.1 cents and gasoline is taxed at 18.4 cents. This disparity 
is something that has to be reviewed. That is where the money comes 
from for highway funds. When we have less money coming in, obviously we 
are going to have less to spend.
  The discrepancy between the fuels is causing a great debate not only 
in the context of the highway trust fund but in terms of our national 
energy policy as well. Pending before the conference committee is the 
energy bill which has substantial increases and requirements for 
increases in ethanol, which has merit. On the other hand, if that is 
going to reduce the availability of highway funding, then we have to 
take a look at a system that allows that to happen.
  The General Accounting Office estimates the tax disparity between 
gasohol and gasoline will cost approximately $21 billion over the next 
11 years, and this is a pretty serious issue in terms, again, of 
funding our national highway program.
  As my colleagues know, the Senate passed the energy bill that 
mandates 5 billion gallons of ethanol by 2012.
  As a result of this, of course, we will have an increased reliance on 
gasohol. So we need to take a look at this. I am not suggesting any 
particular bias one way or the other, other than the fact that by 
making this change in the use of fuel, we have a change in the revenue 
that will be available if we continue to have the same formula for 
doing that.
  Gasohol, which of course is the ethanol, is taxed at 13.1 cents a 
gallon; gas fuel is 18.4 cents. As to the trust fund, under the gas 
arrangements we have now, 15 cents of it goes into the highway fund; 
under the gasohol-ethanol, it is only 7 cents.
  So we find ourselves with a substantial change, a substantial 
differential, in terms of how we will be funding our highways. I hope 
that in the course of the committee activities we can take a long look 
at it.

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