Congress's struggles to agree on a multi-year bill have drawn out so long that the Highway Trust Fund is almost insolvent. Its highway account may be unable to meet its obligations as soon as October, the American Association of State Highway and Transportation Officials said Jan. 31 in a report analyzing Congressional Budget Office data.

The fund's finances have declined as cars have become more fuel-efficient and Americans drive less because of higher gasoline prices, according to the U.S. Transportation Department.

The Federal Highway Administration and the Federal Motor Carrier Safety Administration would be "in complete shutdown," and all reimbursements to states for construction projects or safety programs would stop if lawmakers fail to act, the Transportation Department said.

If the highway administration shuts down, states can lose reimbursements of $10 million to $12 million a day, said Jack Basso, director of program finance and management at the Washington-based American Association of State Highway and Transportation Officials.

"We need to have a long-term, well-funded bill," Basso said. "We're coming into the height of the construction season. It makes it difficult for states to make big commitments long-term when you're running on short-term extensions."

About 3,500 workers at the highway administration, motor carrier administration and the National Highway Traffic Safety Administration would be furloughed, according to the Transportation Department. In past government shutdowns, furloughed employees have later collected back pay.

Deposit Money

While 4.3 cents of the U.S. gasoline tax would continue to be authorized, the Transportation Department wouldn't be allowed to deposit the money into the trust fund, so none of the money would be available to fund projects, according to the department.

Today's vote requiring a simple majority follows three days of unsuccessful attempts to pass a highway-funding extension using a fast-track procedure that bars amendments. Republicans weren't able to round up the approximately 50 Democrats they needed to reach a two-thirds majority.

"We're trying to ensure all this doesn't come to an end this weekend," said Representative David Dreier, a California Republican and chairman of the House Rules Committee. "If we don't take action, Saturday night the entire program comes to an end."

When House leaders tried to bring a five-year bill to the floor in February, Republicans were so divided over how to pay for projects and whether mass transit should keep getting money from U.S. gasoline taxes that it wasn't taken to a vote.

On the short-term extension, some Republicans want to reduce spending instead of continuing programs at current levels.

Senate Majority Leader Harry Reid, a Nevada Democrat, has said he doesn't want a temporary extension.

The Senate's two-year, $109 billion transportation plan passed March 14 includes about $14 billion from other accounts and general taxpayer money to shore up the highway trust fund. The trust fund collected $36.9 billion from all sources in 2011, according to the CBO.

With pressure building to pass a bill, Senate Democrats did their best to make sure House Republicans are feeling the heat. Senators Barbara Boxer, the Environment and Public Works committee chairman, and Charles Schumer, a member of Senate leadership, stood yesterday before a clock counting down the days and hours to a highway funding shutdown.

'Highly Partisan'

House Speaker John Boehner tried to pass a "highly partisan" five-year bill and failed, said Schumer, a New York Democrat, urging passage of the Senate's measure.

"Speaker Boehner has once again been painted in a corner by the Tea Party wing of his caucus who is committed to blocking a responsible highway bill at every turn," Schumer said. "They don't believe the federal government should be involved in highways."

Tens of thousands of construction workers would lose their jobs when federal reimbursements stop flowing to state highway departments, Boxer said. North Carolina by itself would lose 41,000 jobs, the California Democrat said, relaying a conversation she had with state officials.

Reid declined to answer directly March 27 when reporters asked whether the Senate would take up the House extension.

"We're playing with that right now," he said. "As I said last week, my feelings haven't changed. I don't like the extension."

The Senate bill is S. 1813 and the House bills are H.R. 7, H.R. 4276 and H.R. 4281.

Bloomberg News

Copyright 2018 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.